NEW YORK (TheStreet) -- Doug Kass of Seabreeze Partners is known for his accurate stock market calls and keen insights into the economy, which he shares with RealMoney Pro readers in his daily trading diary.Among the posts this past week were entries about Altisource Portfolio Solutions and former Fed Chair Paul Volcker. Please click here for information about subscribing to RealMoney Pro.
Altisource Portfolio Solutions Still Soars
Originally published on Friday, Oct. 25 at 10:06 a.m. EDT. I wanted to update Altisource Portfolio Solutions ( ASPS) for those who are fortunate enough to still own this monster! (As I have often reminded myself, I mistakenly failed to re-establish my long position when the shares traded down to $70 months ago.) Altisource reported a huge beat in revenue ($211 million, up 46% year over year) and profits (GAAP $1.42 a share, cash EPS $1.80 a share). Pretax margins leaped to 27%, leading to the earnings breakout, which was well above consensus). OCN), mostly government-sponsored agency loans. The incremental fees earned on this (at a near-50% default servicing margin) coupled with other growth initiatives within the company and at Ocwen should produce revenue of $775 million in 2013 and $1.05 billion next year. This will translate into approximately $6.20 a share in 2013 and over $10.25 a share in 2014. The shares, which stood at around $15 a share in late 2009, now trade at near $150 -- adjusted for the Altisource Residential ( RESI) and Altisource Asset Management ( AAMC) spinouts, it trades over $200.
The World According to Paul Volcker
Originally published on Thursday, Oct. 24 at 10:24 a.m. EDT. Brother Bank of America/Mother Merrill Lynch recently sponsored a lunch meeting with former Fed Chair Paul Volcker. What follows is a summary of his comments. Volcker is typically someone who sees the glass half-full.
- world economic growth stuck at 2%
- business investment has plateaued despite record profits / no special sauce for the economy
- housing up but off a very low base
- consumer is spending but at restrained levels / no wage growth for the past decade
- loss of confidence (in the American political system)> low inflation / zero rates should be good for the economy
- Japan may not be successful reflating their way out of a 20 year recession given the depths of their economic morass
- Japan demographics contra to their ability to grow (oldest demographics in the world)
- Europe slowly emerging from their recession
- EU/Euro remains a good concept re: inability to devalue individual currencies
- weak periphery European countries (PIIGS) benefited and capitalized on strength of UK and Germany bringing down the entire EU
- a cohesive EU will take time/Germany cannot do it alone
- pay attention to France / critical that the French remain relevent and strong
- European banks remain weak
- lack of global confidence remains the primary (global economic growth) gating factor
- difficulty re: implementation of Volcker Rule / Dodd Frank / et al due to independent nature of individual banks
- not happy about how US government currently functions / regulators missed the crisis / reconstruction moving too slowly
- local government working more effectively/efficiently
- too many Federal regulatory bodies
- expect no great changes from Yellen
- QE taper is not "life or death"
- interest rates at zero is not a guarantee
- Fed will act when appropriate based on data
- U.S. remains best system globally/however emerging economies are not so willing to align with U.S. interests as they were 30 years ago.