UPDATE: Piper Jaffray Initiates Coverage on Altisource Residential Corp. with Overweight Rating, $24 PT on Low-Cost Integrated Model

In a report published Monday, Piper Jaffray analyst Michael J. Grondahl initiated coverage on Altisource Residential Corp.

with an Overweight rating and $24.00 price target. In the report, Grondahl noted, “We are initiating coverage of Altisource Residential Corporations (RESI) with an Overweight rating and $24 price target (based on 1.5x book value). We believe RESI represents a unique and efficient low cost model to play the current housing dislocation as many non-performing loans (NPLs) get sold by large banks. RESI will purchase NPLs and outsource servicing to Ocwen Financial (OCN), with workout processing and repositioning outsourced to Altisource Portfolio Solutions (ASPS). By leveraging OCN and ASPS, RESI can establish a national business and not be limited to a geography or carry extensive infrastructure. RESI will ultimately own a portfolio of single family rental properties. In our view, RESI's low cost integrated model will position it for growth to generate an attractive and growing dividend.” Altisource Residential Corp. closed on Friday at $18.68.