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Altisource Portfolio Solutions: A Hubzu Spinoff Would Be Worth $500M

Hubzu - A spin off of the online businesses would create enormous value for shareholders likely worth close to current market cap of $560mm.

Several comps in the sector confirm Hubzu is much more valuable as separate entity.

Management needs to monetize these assets given the current environment.

Altisource Portfolio Solutions (NASDAQ:ASPS) is a specialty finance company we recently wrote about as being severely undervalued with lots of upside based upon multiple expansion as well as being our #1 short squeeze candidate. Our previous analysis was focused upon the low Price/Earnings & Price/Sales multiples, strong shareholder base as well as the high short interest & extremely tight float. One additional value driver that we did not focus upon but will do so now is their online asset The company also made some tuck in acquisitions in the online space but we will focus on the above as we believe is their marquis asset.

Online Real Estate Portal Assets - What are they worth?

How valuable is Hubzu and their other online assets? Based upon recent mergers and acquisitions in the internet space, we believe these assets are worth a minimum of $500 million in their current form. How could this be possible given that the entire market cap of ASPS is approximately $550 million. We have prepared a table below highlighting recent transactions in the internet space and the multiples being paid by acquirers or merging companies.

(click to enlarge)

You can see the Price/Sales multiples being paid are very generous ranging from approximately 1.0x to about 20.0x not taking into...