Altisource and being greedy when others are fearful

Let me clarify how I feel about Altisource… I am extremely bullish on it.  It has everything I want in an investment:

1. Wonderful economics.  Historical growth over 30%/year with very high high returns on capital.
2. Low valuation.  P/E less than 10.  As a bonus, Altisource has gone crazy buying back shares after the share price fell.  It has bought back more than its free cash flow.
3. Talented management (see #1).
4. Ethical management.

In general, I always try to look at both sides of an argument.  To figure out if I am right about something, I try to prove myself wrong (e.g. to figure out the short thesis and to consider it).  That being said, I think that the fears over Altisource have been overdone.

Is now the time to be greedy when others are fearful?  I don’t like being promotional on this blog but I will say that I have been buying more Altisource.

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Risks to Ocwen and Altisource

I apologize for the high volume of Altisource posts.  Altisource is by far my biggest position so I need to make sure that I’m not goofing this one up (especially because I have been doubling down on Altisource).

As far as the risks go:

•  Ocwen’s future earnings will likely be hurt as I do not see it taking kickbacks on force-placed insurance.
• Regulation can theoretically be very ugly for Ocwen and Altisource.
• Declining delinquencies could slow or reverse growth at either company.

Notes on cable – Part 5 – The future winners of Internet TV

The future winners of Internet TV will likely be the companies that can:

1. Intelligently buy undervalued content.
2. Achieve scale (or have scale).
3. Create good software

Are mortgage servicers evil?

This post will take a look at situations where mortgage servicers screw up and why they screw up.  I’ll let you decide whether or not they are “evil” and whether or not they deserve their bad press and regulatory attention.

Notes on cable – Part 4 – Billing for Internet

There are different approaches to billing users for Internet usage.  This post looks at the ways in which ISPs might raise prices and implement price tiering for its customers.

Misconceptions about Ocwen and Altisource

This year, both Ocwen and Altisource’s share prices have gone down roughly two thirds.  I think that some of the fears regarding these stocks are based on misconceptions.

(ASPS/OCN) Kickbacks on force-placed insurance revisited

This is a follow-up to my previous post.  I suspect that the EPS decrease from Altisource shutting down its lender placed insurance brokerage business is largely not recurring and is more like a one-time charge.  If the EPS hit is one-time, it would mean that Altisource’s franchise is largely unaffected.