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.

Trade-Ideas LLC identified Altisource Portfolio Solutions ( ASPS) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Altisource Portfolio Solutions as such a stock due to the following factors:

  • ASPS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $19.9 million.
  • ASPS has traded 565,630 shares today.
  • ASPS is down 3.3% today.
  • ASPS was up 5% yesterday.

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More details on ASPS:

Altisource Portfolio Solutions S.A. operates as a marketplace and transaction solutions provider for the real estate, mortgage, and consumer debt industries in the United States. ASPS has a PE ratio of 5.6. Currently there is 1 analyst that rates Altisource Portfolio Solutions a buy, 1 analyst rates it a sell, and none rate it a hold.

The average volume for Altisource Portfolio Solutions has been 613,800 shares per day over the past 30 days. Altisource has a market cap of $483.2 million and is part of the services sector and diversified services industry. The stock has a beta of 1.58 and a short float of 41.5% with 4.71 days to cover. Shares are down 29% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Altisource Portfolio Solutions as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and generally higher debt management risk.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 2.8%. Since the same quarter one year prior, revenues rose by 15.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Real Estate Management & Development industry and the overall market, ALTISOURCE PORTFOLIO SOLTNS's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $71.80 million or 41.23% when compared to the same quarter last year. Despite an increase in cash flow, ALTISOURCE PORTFOLIO SOLTNS's cash flow growth rate is still lower than the industry average growth rate of 57.12%.
  • The gross profit margin for ALTISOURCE PORTFOLIO SOLTNS is currently lower than what is desirable, coming in at 29.33%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -0.59% is significantly below that of the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Real Estate Management & Development industry. The net income has significantly decreased by 104.3% when compared to the same quarter one year ago, falling from $35.52 million to -$1.54 million.

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