A Real 10x Stock? I Just Bought 600 Shares

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A small-cap stock, Altasource Portfolio Solutions (ASPS), has the potential to 10x in size, according to Jake, a stock enthusiast. He recommends buying the stock outright rather than buying options, citing that small-cap stocks can be more volatile and may not be suitable for option trading. The company, which handles mortgage foreclosures, has been negatively impacted by the pandemic-related moratorium on foreclosures. However, with the recent announcement by President Biden to end the moratorium on July 31st, Jake believes the company’s services will be in high demand again.

He notes that the company has been aggressively buying back its own shares, reducing outstanding shares by 40% since 2013, which could lead to a higher stock price. Furthermore, the company has secured a revolving line of credit agreement, allowing it to borrow up to $20 million to stay afloat until the moratorium ends and profitability resumes.

While the company’s financials are currently not impressive, with revenue and net income declining, Jake believes the company has a lot of upside potential and is worth holding for the long-term. He recommends holding the stock for at least a year to benefit from long-term capital gains. However, there are risks involved, including the possibility of a future moratorium on foreclosures, which could impact the company’s ability to sustain itself.

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