Altisource Portfolio Solutions (NASDAQ: ASPS)

altisouceAn introduction: they are all about real estate and mortgage portfolio management and online property sales through Hubzu. 23,000 homes sold online in 12 months. However, they make more money on homes sold through auction than online.

Warren Buffett wrote in his 1989 letter to Berkshire shareholders:

“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.  Charlie understood this early; I was a slow learner.  But now, when buying companies or common stocks, we look for first-class businesses accompanied by first-class managements.”

Altisource is a reliable company with respected management.

The mortgage servicing industry has steady growth. It does not have the regular boom/bust cycles of commodity industries. Or, the risk of a technological shift that can make those industries obsolete.  On the other hand, mortgage servicing is a competitive business.

Altisource provides access to an attractive growth business with low risk and, at present, at a reasonable valuation.

A buy signal may take a few days or even weeks yet. The share price has dropped which has made it attractive. The share price is climbing again, and as I think it is about midway already in this climb, I am going to wait until it drops slightly on a profit-taking correction. At the bottom of that future correction, I plan to buy. Will keep you posted.

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