In a Form 4 filed with the Securities and Exchange Commission, Christian Leone’s Luxor Capital Group has disclosed sales on July 23 of 362,150 shares in Altisource Portfolio Solutions S.A. (NASDAQ:ASPS) at prices ranging from $39.50 to $39.90. In its most recent 13F filing, Luxor Capital Group disclosed an ownership stake of 2.38 million shares in Altisource Portfolio Solutions. The fund now holds just under 1.87 million shares of the company, a 9.98% stake.
Luxor Capital Group is a multi-billion dollar hedge fund established and managed by Christian Leone. The New York-based hedge fund mainly invests in special situations, equity of distressed companies and global debt by employing a value-oriented stock picking approach. The investment management firm manages several separate client-focused equity, fixed income and balanced portfolios. The fund’s most recent 13F filing with the SEC for the March 31 reporting period reveals that it manages a public equity portfolio worth $6.19 billion, while its holdings are diversified among the following sectors: 47.52% in the services sector, 13.56% in the technology sector, and 8.36% and 5.19% in the financial and transportation sectors, respectively. In addition to that, the public equity portfolio managed by Christian Leone and his team is highly concentrated, with the top ten positions representing 66.52% of its entire portfolio.
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Altisource Portfolio Solutions S.A. (NASDAQ:ASPS) is a marketplace and transaction solutions provider for the real estate, mortgage, and consumer debt industries in the United States. The company’s proprietary business processes, vendor and electronic payment management software, and behavioral science-based analytics improve outcomes for marketplace participants such as sub-prime servicers, utility companies, commercial banks, mortgage bankers, and investors, among others. The shares of Altisource Portfolio Solutions have grown by over 14% year-to-date despite suffering serious slumps at the beginning of the year.
On July 23, the leading provider of mortgage, financial and technology services for the real estate industry announced its acquisition of CastleLine Holdings LLC, which is a specialty risk management and insurance services company. The deal sent Altisource’s shares up by nearly 28% and that burst was what prompted Leone to cash in on some of his position. CastleLine is a provider of certified loan insurance products designed to protect participants in the mortgage market against losses caused by mortgage underwriting defects. So it is not so hard to conclude that the freshly-announced acquisition will assist Altisource in growing its operations and activities further. Specifically, Altisource believes that the acquisition of CastleLine is set to strengthen its origination related offerings, with products and services focused on mitigating risk in the origination, underwriting, purchase and securitization of residential mortgages. By the same token, the acquisition is anticipated to enhance the expansion of CastleLine’s products and services into the neighboring markets Altisource is currently operating in, which will surely unlock new revenue streams for the company. It’s hard to predict to what extent the new acquisition will impact Altisource’s top-line, but the company can highly benefit from the talented leadership team of CastleLine that joins the Altisource family upon the completion of the deal.
As Altisource has recently reported its second quarter financial results, it would be unwise not to take a thorough look at the company’s financials. Altisource had a very strong second quarter, which surely supported the company’s recent boost in its share price. The company generated service revenues of $236.6 million for the second quarter of 2015 that ended June 30, which marks an increase of 14% compared to the first quarter of this year, though it also marks a 10% decrease year-over-year. At the same time, Altisource posted diluted earnings per share of $2.22, compared to $0.18 reported in the first quarter of 2015 and $2.24 reported in the second quarter a year ago. It is also worth mentioning that Altisource repurchased 1.4 million shares of common stock at an average price of $28.57 per share, which might serve as an indication that the shares are undervalued. As a result, the share repurchase pursued by Altisource appears to have had a positive effect on the remaining shares, so it’s worth keeping a close eye on Altisource considering the recent positive news around the company.
While Leone’s move to sell some shares may come early, it’s not at all surprising to see a manager cash in some of his or her stake following a big gain. Nonetheless, shares are well off from the more than $90 range they were trading at when Leone opened his position in the second quarter of 2013, so it’s hardly as if he’s taking profit from the move. Shares traded at over $160 at one point later that year, more than four times higher than their current level. Within our database, Leon Cooperman’s Omega Advisors is among the largest shareholders in Altisource Portfolio Solutions S.A. (NASDAQ:ASPS), holding 1.71 million shares as of March 31.
Disclosure: None
