21.46 -0.68 (-3.16%) Sell

Don't buy ASPS now, it is an investor's nightmare

13 min read

ALTISOURCE PORTFOLIO SOLUTIONS S.A. ranked among the worst performers on Friday. It delivered -3.16% to close at 21.46. It is currently trading -42% below it's 52 week high of 37.52.

[Themes containing ASPS]

ASPS showed a strong bearish trend over the last 3 months. During this period ASPS delivered -37.4% and saw a maximum drawdown of -38.67%. There were 3 short signals during this period that returned a cumulative of +31.07% to investors.


ASPS has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 18 Apr, 2017 to 8 Nov, 2018. Over the last 2 years 11 months and 10 days, ASPS underperformed the SP500 index on 44% days. Which indicates that on days ASPS underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

ASPS returned losses on 64% days in the last three months. During this time, it delivered on average -0.71% per day. It delivered it's worst daily return of -7.11%, during this period, on Tuesday, 23 Oct, 2018. The longest stort-term trend during this period was 7 losing days, which started on 25 Sep, 2018 and ended on 3 Oct, 2018. This bearish trend lost -8.05% of investor capital.

The last 12 months saw ASPS's investors making profits in 4 months and incurring losses in 8 months. ASPS was less consistent in delivering monthly returs than SP500 index. ASPS was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -21.16% compared to -7.28% returned by SP500 index in Oct 2018. ASPS had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Sep 2018 to Dec 2018) during which period it delivered -47.51%. It is interesting to note that both ASPS and SP500 index significantly outperform during months when quarterly/annual results are announced.

Minimizing downside risk while maximizing the upside is a powerful concept.
-- Mohnish Pabrai

ASPS is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in ASPS's volatility from 17 Sep, 2018 to 31 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that ASPS has significant positive skewness in it's return distribution. This indicates that investors can expect ASPS to recover from drawdowns quickly. Which makes ASPS a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

SP500 index has more chance of extreme outcomes than ASPS. Therefore, SP500 must receive a lower allocation than ASPS in your portfolio. ASPS usually has shorter drawdown period than the SP500 index.

Based on your interest in ASPS you may find it interesting to know that ZBRA and KEYS are both small caps that have shown remarkable performance and deserve to be on every investors' watchlist.

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