Why Altisource Residential (RESI) Stock Is Down Today

NEW YORK (TheStreet) -- Altisource Residential (RESI) was falling 9.1% to $25.91 Monday after losing a recent Department of Housing and Urban Development auction.

Private equity firm Lone Star Funds won the auction with bids for $3.9 billion, or 65.95 of the unpaid loan balances. The auction "was the most competitive sale to date," a HUD spokesperson told Bloomberg. At total of 27 investors placed 163 bids on the pools, with winning bids averaging 77.6% of the total property values.

Must read: Warren Buffett's 25 Favorite Stocks

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings team rates ALTISOURCE RESIDENTIAL CORP as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate ALTISOURCE RESIDENTIAL CORP (RESI) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • RESI's very impressive revenue growth greatly exceeded the industry average of 10.3%. Since the same quarter one year prior, revenues leaped by 4818.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 692.30% and other important driving factors, this stock has surged by 70.45% over the past year, outperforming the rise in the S&P 500 Index during the same period. Although RESI had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
  • When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, ALTISOURCE RESIDENTIAL CORP's return on equity is below that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$23.57 million or 1627.78% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • You can view the full analysis from the report here: RESI Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

More from Markets

Is Nvidia Still Tech's Most Explosive Stock? A Bull and Bear Debate

Is Nvidia Still Tech's Most Explosive Stock? A Bull and Bear Debate

Nvidia, Nordstrom, Elon Musk and Google - 5 Things You Must Know

Nvidia, Nordstrom, Elon Musk and Google - 5 Things You Must Know

Stock Futures Edge Lower Amid Disappointing Tech Guidance

Stock Futures Edge Lower Amid Disappointing Tech Guidance

3 Growing Risks That Could Blow Up Your Stock Portfolio Before 2019

3 Growing Risks That Could Blow Up Your Stock Portfolio Before 2019

Elon Musk Tells New York Times Tweet Was Attempt at Transparency

Elon Musk Tells New York Times Tweet Was Attempt at Transparency