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 $13.3 million.
  • ASPS has traded 241,720 shares today.
  • ASPS is down 3% today.
  • ASPS was up 8.8% 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 7. Currently there is 1 analyst that rates Altisource Portfolio Solutions a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Altisource Portfolio Solutions has been 528,600 shares per day over the past 30 days. Altisource has a market cap of $583.6 million and is part of the services sector and diversified services industry. The stock has a beta of 1.22 and a short float of 53.3% with 10.45 days to cover. Shares are down 6.7% year-to-date as of the close of trading on Monday.

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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 and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • ASPS's revenue growth trails the industry average of 18.0%. Since the same quarter one year prior, revenues slightly increased by 0.5%. 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.
  • ALTISOURCE PORTFOLIO SOLTNS has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ALTISOURCE PORTFOLIO SOLTNS increased its bottom line by earning $5.56 versus $5.19 in the prior year. This year, the market expects an improvement in earnings ($5.77 versus $5.56).
  • Net operating cash flow has significantly decreased to -$15.94 million or 143.89% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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 90.7% when compared to the same quarter one year ago, falling from $39.63 million to $3.70 million.

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