{"id":11851,"date":"2012-06-03T18:59:01","date_gmt":"2012-06-03T22:59:01","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=11851"},"modified":"2012-06-03T18:59:01","modified_gmt":"2012-06-03T22:59:01","slug":"shorts-back-off-lps","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2012\/06\/03\/shorts-back-off-lps\/","title":{"rendered":"Shorts Back Off Lender Processing Services As Overall Prospects Continue To Improve"},"content":{"rendered":"

(This is an excerpt from an article I originally published on Seeking Alpha on May 31, 2012. Click here to read the entire piece<\/a>.)<\/strong><\/p>\n

{snip} Since a spate of heavy call buying in February<\/a>, short interest has taken a fresh plunge. It has now returned to levels last seen right before foreclosuregate exploded.<\/p>\n


\n
\"LPS<\/a>
LPS shares short have steadily plunged since reaching all-time highs last summer<\/figcaption><\/figure>
\nSource: NASDAQ.com LPS Short Interest<\/a><\/strong>
\n<\/center><\/p>\n

The chart below demonstrates the prescience of recent call option buyers. I am guessing that a lot of short covering has helped LPS gain 55% for 2012. <\/p>\n


\n
\"LPS<\/a>
LPS has had a strong year even after losing some of its gains after May's earnings<\/figcaption><\/figure>
\nSource: FreeStockCharts.com<\/a><\/strong>
\n<\/center><\/p>\n

Although LPS has lost 13.5% since reporting earnings May 3rd, short interest continued to decline. I consider this more confirmation that the negative headwinds for LPS continue to abate. Indeed, in the last earnings conference call (see Seeking Alpha transcripts<\/a>), LPS’s management executed as well as can be expected. {snip}<\/p>\n

{snip}<\/p>\n

Here are a few of the highlights from the earnings conference call that caught my interest {snip}:<\/p>\n

{snip}<\/p>\n

With a forward P\/E of 8.8, price-to-sales ratio of 0.96, price-to-book is 3.7, and 1.7% dividend yield, LPS is not expensive but also not particularly cheap. I suspect the loss in the stock since the last earnings report is a combination of profit-taking and the malaise in the general stock market. I am expecting the stock to remain in a trading range for some time until a fresh catalyst appears; short-covering is not likely to provide much more lift going forward. {snip}<\/p>\n

Be careful out there!<\/p>\n

(This is an excerpt from an article I originally published on Seeking Alpha on May 31, 2012. Click here to read the entire piece<\/a>.)<\/strong><\/p>\n

Full disclosure: long LPS<\/p>\n","protected":false},"excerpt":{"rendered":"

(This is an excerpt from an article I originally published on Seeking Alpha on May 31, 2012. Click here to read the entire piece.) {snip} Since a spate of heavy call buying in February, short interest has taken a fresh plunge. It has now returned to levels last seen right before foreclosuregate exploded. Source: NASDAQ.com … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[220,35,32],"tags":[435,436,155,419],"class_list":["post-11851","post","type-post","status-publish","format-standard","hentry","category-earnings","category-housing","category-options","tag-lender-processing-services","tag-lps","tag-options-trading","tag-short-interest"],"yoast_head":"\nShorts Back Off Lender Processing Services As Overall Prospects Continue To Improve - ONE-TWENTY TWO: Trading Financial Markets<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/drduru.com\/onetwentytwo\/2012\/06\/03\/shorts-back-off-lps\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Shorts Back Off Lender Processing Services As Overall Prospects Continue To Improve - ONE-TWENTY TWO: Trading Financial Markets\" \/>\n<meta property=\"og:description\" content=\"(This is an excerpt from an article I originally published on Seeking Alpha on May 31, 2012. 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