Altisource Portfolio Solutions (ASPS), mcap=$80m

ASPS pitch:
– Servicer of defaulted loans and foreclosed homes for US mortgage and real estate industries.
– Business was negatively affected by COVID-induced foreclosure and borrower relief measures that led to a ~90% peak-to-trough reduction in foreclosure starts.
– Residential mortgage delinquencies are starting to accelerate off of the record lows.
– Compelling opportunity to buy a countercyclical business with leverage to the upcoming foreclosure cycle.
– The stock is also oversold due to an ill-timed equity raise.

ASPS valuation:
– In a normalized mortgage default market, ASPS is expected to generate $42m EBITDA.
– At 10x multiple would be a $11 stock.

Exp. gain: +200%+ to $11/share.

Full write-up (free guest account required):