This is an excerpt from an article I originally published on Seeking Alpha on October 30, 2011. Click here to read the entire piece.)
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Today, I am going to try again to make the case that LPS is potentially turning around. Here are the main points and observations:
- Short interest is down 34% from the all-time on August 15, 2011.
- The market responded well after LPS raised earnings guidance on October 25.
- That response sent LPS above its primary downtrend marked by the 50-day moving average (DMA) for the first time since March, 2011.
- On Thursday, November 3, the stock gained 11% on high buying volume in what looks like convincing follow-through to the break in trend.
- An energetic new CEO who is a 30-year veteran in the mortgage industry.
- Thomas Schilling, CFO and former interim CEO, has made spent $459,050 buying LPS shares from November 10, 2010 to August 8, 2011.
The graphs below show the history of short interest in LPS and its recent price history.
Source: NASDAQ
Source: FreeStockCharts.com
{snip}…new CEO Hugh Harris…{snip}…staked his claim to three top priorities for the next 90 days (all quotes and material from the Seeking Alpha transcript of the earnings call):
- Review and assess business operations and structure, making whatever adjustments in business focus and hiring/roles to improve performance.
- Focus on regulatory and legal issues.
- Tell LPS’s “positive story” (aka public relations)
LPS explained that the quarter’s revenue and earnings were better than expected…
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I have long stopped buying and selling puts on LPS and am now just sitting on my small amount of shares. {snip}
Be careful out there!
(Click here for an archive of my previous posts on Lender Processing Services).
This is an excerpt from an article I originally published on Seeking Alpha on October 30, 2011. Click here to read the entire piece.)
Full disclosure: long LPS