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Deer Park Road Management Invests in Altisource Portfolio Solutions

- By Kyle Ferguson

Deer Park Road Management Co., an investment advisory services company, added to its stake in Altisource Portfolio Solutions SA (ASPS) on March 23. The firm purchased 43,404 shares of the company for $28.15 per share, according to an SEC filing.

Altisource Portfolio Solutions provides services and technology to the mortgage and real estate industries. The company operates through Mortgage Services, Financial Services and Technology Services.

It uses innovation as its guiding principle and focuses on compliance and exceptional service. The company provides end-to-end solutions in origination and servicing and other online real estate platforms for consumers and investors.

Altisource Portfolio Solutions has a market cap of $655.76 million, a price-earnings (P/E) ratio of 25.29, an enterprise value of $934.2 million, a price-book (P/B) ratio of 10.73, a price-sales (P/S) ratio of 0.71, a current ratio of 2.19 and a quick ratio of 2.19.

Over the past five years, Altisource's revenue has increased an average of 15.08% per year. In that same time, its gross margin has increased 36.41% and its cash flow has increased 5.58%.

According to GuruFocus, the company has a 5 of 10 financial strength rating. It has a cash-debt ratio of 0.41, an equity-asset ratio of 0.09 and an Altman Z-Score of 3.27, which indicates it is financially strong. The Beneish M-Score of -3.15 suggests the company does not manipulate its financial statements. The Piotroski F-Score of 6 indicates the company's financial situation is typical for a stable company.

The company has an 8 of 10 profitability and growth rating. It has an operating margin of 6.53%, a net margin of 2.88%, return on assets (ROA) of 4.10% and return on equity (ROE) of 45.29%, ranking it higher than 95% of the 601 companies in the Global Business Services industry.

The company has multiple streams of income and currently serves some of the largest financial institutions in the U.S., government-sponsored enterprises, utility companies, commercial banks, servicers, investors, non-bank originators and correspondent lenders, mortgage bankers, insurance companies and financial services companies.

In 2016, the company signed a significant number of agreements and statements of work with strategic customers, positioning itself well for 2017.

The company's market price has skyrocketed, gaining an estimated 50% over the previous year.

The company has excellent earnings power of $174.35.

Gurus Jim Simons (Trades, Portfolio) and Murray Stahl (Trades, Portfolio) both added to their stake in the company during the fourth quarter. Since then, the stock's market price has gained an estimated 26%.

Disclosure: Author does not own any shares of this company.

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This article first appeared on GuruFocus.