# CCP - Credit Corp Group



## ilikegirls (8 May 2006)

Hi,

Have just begun in the market and am learning slowly... Have recently bought CCP stocks based on a consistent trend rise as well as being in the top 200 but not much else in terms of company research. Since my purchase they have declined...   

What is the general consensus of this stock and would it be worth hanging onto?    

Thanks in advance to all...

B.


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## michael_selway (29 August 2006)

ilikegirls said:
			
		

> Hi,
> 
> Have just begun in the market and am learning slowly... Have recently bought CCP stocks based on a consistent trend rise as well as being in the top 200 but not much else in terms of company research. Since my purchase they have declined...
> 
> ...




Thsi stocks has been crazy sonce and continue to do so!

Good forecasts growth also

Earnings and Dividends Forecast (cents per share) 
2006 2007 2008 2009 
EPS 35.7 43.6 53.0 62.7 
DPS 18.0 22.7 29.2 34.2 

EPS(c) PE Growth 
Year Ending 30-06-07 43.6 17.5 22.1% 
Year Ending 30-06-08 53.0 14.4 21.6% 









> Date: 24/8/2006
> Author: Marc Moncrief
> Source: The Age --- Page: B5
> Debt collector Credit Corp has registered a 97% increase in profit to $A14.4m for 2005-06. The company believes that rising interest rates provide an optimistic outlook for its business as more Australians default on their loans. It bought $A93.4m of debt in 2005, which more than doubled the 2004 figure of $A33.4m. However analysts pointed out that firms like it will find it tougher to collect debts in times of rising interest rates. Credit's share price leapt to $A7.73 on 23 August 2006, compared with $A3.50 a year ago
> ...


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## chops_a_must (9 November 2006)

This one came up as a trigger tonight actually. Might be a good investment given idiots can't afford their houses anymore.


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## Jackob (9 November 2006)

ilikegirls said:
			
		

> ... Have recently bought CCP stocks based on a consistent trend rise as well as being in the top 200 but not much else in terms of company research. Since my purchase they have declined...
> 
> What is the general consensus of this stock and would it be worth hanging onto?




Hi ilikegirls,

Just a few my observations:

1/ The up-trend seems altered from the chart

2/ Directors and significant shareholder are reducing their holdings aggressively in the past a few months

3/ Increasing interest rate costs CCP more on loans, and reduces the values of debt ledgers.


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## exgeo (8 January 2007)

There are broker reports on creditcorp's website.

http://www.creditcorp.com.au/investor.asp?MenuID=3&TypeID=3

While the rating is high (I normally consider myself a "value investor"!), this is one I've sold in the past and wished I hadn't. They seem to consistently beat their own guidance, year after year. It seems that given what you're constantly reading in the paper about folks getting into debt, they'd have a large supply of distressed debt to choose from. As noted by a previous poster, the directors seem to have been selling down a lot of their holdings though.


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## michael_selway (8 January 2007)

exgeo said:
			
		

> There are broker reports on creditcorp's website.
> 
> http://www.creditcorp.com.au/investor.asp?MenuID=3&TypeID=3
> 
> While the rating is high (I normally consider myself a "value investor"!), this is one I've sold in the past and wished I hadn't. They seem to consistently beat their own guidance, year after year. It seems that given what you're constantly reading in the paper about folks getting into debt, they'd have a large supply of distressed debt to choose from. As noted by a previous poster, the directors seem to have been selling down a lot of their holdings though.




Hi would you say its a buy at current prices?

thx

MS


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## exgeo (8 January 2007)

Hmm, well if you're in it for the long term then perhaps, but I'd try to accumulate it below 8 bucks. Every now and then it gets whacked down to about 7.80 and then struggles back up to the 8 dollar mark again. Doesn't seem much likelihood of losing your shirt on it and assuming people keep on taking on debts they can't easily pay back, they should have a continuing supply of "customers" for their operations (ie/ the wind is at their back, which is never a bad thing).


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## dhukka (8 January 2007)

The biggest risk here seems to be that CCP like their competitors have done in the past will overpay for a ledger and have to write it down. As the analyst at Linwar points out CCP have the most conservative amortisation policy among their competitors writing off a substantial portion of the ledger in the first few years but that still doesn't matter if you overpay for a ledger. 

An upturn in bad debts is being anticipated by the major banks at the current point in the credit cycle giving further growth opportunities for CCP. However with more debt purchases comes the increased chance of overpayment. If the bad debt cycle is particularly strong management may be tempted and get greedy. Investors need to have faith in management to adhere to their tried and tested purchasing policy however there is always the chance that a bad ledger slips under the radar. Linwar forecast CCP to able to fund debt purchases from cashflow from 2008, this will improve ROI and also lend stability to the balance sheet and remove some of the risk.   

Given their track record I think management should be given the benefit of the doubt but I'd be watching for any deviation in their stated investment and gearing policies


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## michael_selway (8 January 2007)

dhukka said:
			
		

> The biggest risk here seems to be that CCP like their competitors have done in the past will overpay for a ledger and have to write it down. As the analyst at Linwar points out CCP have the most conservative amortisation policy among their competitors writing off a substantial portion of the ledger in the first few years but that still doesn't matter if you overpay for a ledger.
> 
> An upturn in bad debts is being anticipated by the major banks at the current point in the credit cycle giving further growth opportunities for CCP. However with more debt purchases comes the increased chance of overpayment. If the bad debt cycle is particularly strong management may be tempted and get greedy. Investors need to have faith in management to adhere to their tried and tested purchasing policy however there is always the chance that a bad ledger slips under the radar. Linwar forecast CCP to able to fund debt purchases from cashflow from 2008, this will improve ROI and also lend stability to the balance sheet and remove some of the risk.
> 
> Given their track record I think management should be given the benefit of the doubt but I'd be watching for any deviation in their stated investment and gearing policies




Hi thanks for the info guys

Btw dhukka do you hold CCP currently?

Also would you buy at current prices?

thx

MS


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## dhukka (9 January 2007)

michael_selway said:
			
		

> Hi thanks for the info guys
> 
> Btw dhukka do you hold CCP currently?
> 
> ...




MS no I don't hold any, I wouldn't buy at the moment - not because of the price but because I think there are other stocks out there with just as attractive growth prospects but with a better risk profile.


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## michael_selway (13 January 2007)

dhukka said:
			
		

> MS no I don't hold any, I wouldn't buy at the moment - not because of the price but because I think there are other stocks out there with just as attractive growth prospects but with a better risk profile.




oh ok which one sin particular?

thx

MS


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## hueyt (17 January 2007)

CCP has rallied past $9 from a low of 7.90 in a matter of days.

I can't see a reason for pricing at these levels. It seems to defy reasonable valuation.

Anyone have any insights on this?


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## bigdog (17 January 2007)

There has no been much volume in recent days

Looks like a few pulling up the SP buying and selling

There are very few sellers which helps


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## michael_selway (17 January 2007)

hueyt said:
			
		

> CCP has rallied past $9 from a low of 7.90 in a matter of days.
> 
> I can't see a reason for pricing at these levels. It seems to defy reasonable valuation.
> 
> Anyone have any insights on this?




What is reasonable valuation may i ask?

thx

MS


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## exgeo (23 January 2007)

NPAT today reiterated by management to be in the range 18-19m. Therefore mid range forecast gives an EPS of 43c based on 43m shares outstanding (1850/43 = 43c).

Today's acquisition of a receivables management firm in Malaysia is not expected to be EPS accretive before 2008.


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## drworm (24 January 2007)

exgeo said:
			
		

> Today's acquisition of a receivables management firm in Malaysia is not expected to be EPS accretive before 2008.




Not entirely correct. The acquisition is *immediately* EPS accretive however will not be expected to make a substantial impact until 2008.

The acquisition seems sound and gives CCP an avenue of growth off-shore. Appears they are expecting the Malaysian debt market to follow in the direction of the US and Australia (ie. from agency collections to debt ledgers) and positioning themselves to cash in - as they have done tremedously well over the past 5 years in the aussie market.


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## resourceboom (19 February 2007)

A lot of the other companies in the debt recoveries business are behaving like dogs (eg RPC / CLH)
I would have thought that these companies should be prospering with debt levels as they are.
After a good ride on CCP I am now looking at selling out, but not sure if they will keep powering on??


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## bigdog (19 February 2007)

IMO the SP has been manipulated today as well as back early January where SP went from about 7.95 to 9.89 on small trades

Dropped back to 8.20.

Today opened at 9.42 and closed at $9.75 with small trades
-- note the number of times 54 shares was traded!

Has anyone else been closely watching CCP?

Today: 19-Feb-2007				
Time----	Price-Vol---Value	Condition*Codes
15:56:48	9.750	369	3597.75	
15:56:48	9.740	31	301.94	
15:43:54	9.740	400	3896.00	XT
15:05:18	9.740	319	3107.06	
14:24:07	9.740	46	448.04	
14:24:07	9.740	54	525.96	
14:05:47	9.750	58	565.50	
14:05:46	9.750	195	1901.25	
14:05:46	9.750	124	1209.00	
13:42:46	9.750	54	526.50	
13:36:17	9.750	858	8365.50	
13:32:52	9.750	54	526.50	
13:32:51	9.700	1,846	17906.20	
13:32:51	9.690	296	2868.24	
13:17:44	9.700	54	523.80	
13:17:43	9.670	551	5328.17	
13:17:43	9.650	631	6089.15	
13:00:23	9.650	54	521.10	
12:59:35	9.650	54	521.10	
12:59:25	9.650	54	521.10	
12:59:15	9.600	2,500	24000.00	
12:59:15	9.590	1,316	12620.44	
12:30:28	9.590	284	2723.56	
12:30:28	9.580	966	9254.28	
12:30:06	9.580	54	517.32	
12:00:18	9.550	1,000	9550.00	
11:54:50	9.500	600	5700.00	
10:43:54	9.450	85	803.25	
10:31:12	9.440	100	944.00	
10:12:02	9.420	1,650	15543.00	
10:06:55	9.420	650	6123.00


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## bigdog (20 February 2007)

ASX ann today is VG

CCP   $9.85    +$0.10  +1.03% 12,018  $118,107  20-Feb 10:29:17  

Revenue 60.6 million up 69%
EBITA $40.7 million up 73%
NPAT $8.7 million up 33%
EPS 20.46 cents up 21%
Div per share 10.25 cents up 28%

CCP 10:06 AM   Presentation - Half Year Results - December 2006 
http://www.asx.com.au/asx/statistics/showAnnouncementPDF.do?idsID=00694643

CCP 10:05 AM  Half Yearly Report & Half Year Accounts 
http://www.asx.com.au/asx/statistics/showAnnouncementPDF.do?idsID=00694639


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## hueyt (20 February 2007)

The stock rallied hard from 7.90 to where it is now.. with the wisdom of hindsight, with the profit result, that rally has been warranted. 

As for the drivers going forward, its hard to say.

On the one hand, deteriorating credit conditions means more opportunities. But if credit quality continues to fall... it'd adversely affect CCP. 

It's a tough stock to analyse. Any thoughts?


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## bigdog (20 February 2007)

hueyt

I have been watching CCP closely trades since xmas.
-- I have been trying to buy but the SP keeps rising on small parcels by both buyers and sellers.  
-- mind you the stock is tightly held!
-- there are 43 million shares and the top 20 own 70% of the shares

Games have been played in early Jan where SP went from 7.90 to 9.75, back to 9.20 and in a number of days back up to 10+ 
-- Yesterday small parcels (54 share parcels were traded many times) pushing up the SP - refer my note Feb 19
-- Todays action had more itegrity IMHO

Todays ASX $ ann were very good

-- IMHO the current SP is overvalued!


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## bigdog (20 April 2007)

CCP SP has done well today up 59 cents and reaching ALL TIME high currently of $10.89
-- volume is not high today

CCP   $10.89    +$0.59  +5.73% 28,202 shares $291,741  20-Apr 13:56:11 
-- observed unusual SP transactions in the past!

http://www.intersuisse.com.au/notes/mntuesday.html

Intersuisse on Tuesday, 17 April 2007 recommended for Credit Corp Group (CCP) to "Accumulate"

PLEASE NOTE SP has since dropped
Just noted late trades after first posting above and now edited with SP down to $10.45
14:35:33 10.4500 26 271.70  
14:33:40 10.4500 45 470.25  
14:33:40 10.4500 1,329 13,888.05  
14:32:02 10.4500 291 3,040.95  
14:31:43 10.4500 2,000 20,900.00  
14:31:43 10.4600 1,000 10,460.00  
14:31:43 10.4700 380 3,978.60  
14:29:42 10.6100 250 2,652.50  
13:56:11 10.8900 155 1,687.95  
13:56:06 10.8900 91 990.99  
13:56:06 10.8900 254 2,766.06  
13:55:45 10.8900 75 816.75  
13:52:09 10.6000 17 180.20  
13:52:09 10.6000 500 5,300.00


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## bigdog (8 November 2007)

CCP has taken a very big hit today following ASX ANN yesterday after the close

I use to hold!

-4.830   	  -45.61%

CCP   	5.76  	  -4.830   	  -45.61%   	with low of 	5.60  	4,040,367 shares  	$24,465,008 @ 	08-Nov 12:26:14 PM

CCP  	5:03 PM  	Earnings Guidance Revision
http://www.asx.com.au/asx/statistics/showAnnouncementPDF.do?idsID=00780474

*2008 Earnings Guidance Revision*
Credit Corp Group Limited (ASX: CCP) advises that its financial year 2008 NPAT is expected to be below previous guidance due to increased costs from growth in employee numbers and infrastructure investments together with a change in the mix of Credit Corp’s portfolio of purchased debt ledgers.

During the first four months of FY08, Credit Corp has experienced margin declines in comparison to the levels achieved in the prior year. Employees recently recruited to service increased ledger purchases in the 2007 and 2008 financial years have not reached anticipated productivity levels as rapidly as expected, resulting in slower revenue growth than anticipated. Further, the productivity of more experienced personnel has been adversely affected by an increased contribution to training and supervisory activities.

The Company's performance has also been impacted by a change in its portfolio mix. Late in the 2007 financial year the Company made the strategic decision not to renew purchases of a particular type of asset due to unsustainably high pricing. This asset had historically produced high short-term returns for the Company. The asset has been replaced with other purchases which, while providing similar overall returns over total asset life, do not provide the same short-term return. Returns from these portfolios are delivered more evenly over time, deferring revenues into future periods.
Investments in infrastructure have been accelerated to accommodate the expanded workforce, including two operational site initiatives. Credit Corp has leased premises in Logan City, Queensland, being fitted out as a new site capable of accommodating over 200 full time employees. In addition, the Company has doubled its capacity at Parramatta, New South Wales, facility providing accommodation for over 200 full time employees. Growth in these two locations will drive Credit Corp’s Australian staff numbers from 405
FTE to approximately 620 FTE, during the 2008 financial year, ensuring appropriately increased capacity.

After fully assessing the cost and asset mix factors contributing to underperformance in the first four months of FY08 and the infrastructure costs required over the balance of the year, the Company has revised its previous full year FY08 NPAT guidance of $24 million to between $17 and $19 million.

Credit Corp’s CEO, Mr Geoff Lucas stated: “We believe it is essential to make timely investments in the Company’s ongoing operations to meet the requirements of future activities as we see significant opportunity for substantial increases in supply of consumer debt into our market. It is, however, disappointing not to have maintained our FY08 earnings growth targets whilst undertaking such a rate of expansion.”

Credit Corp is confident in its long term strategy to deliver NPAT growth in the 2009 financial year.


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## mark_au (8 November 2007)

Is this just a temporary setback, (time to go shopping) or are they doomed  ;-(
Ive been really impressed by these guys untill now. Hopefully this isnt a sign of long term problems???

Thoughts ???


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## chops_a_must (8 November 2007)

mark_au said:


> Is this just a temporary setback, (time to go shopping) or are they doomed  ;-(
> Ive been really impressed by these guys untill now. Hopefully this isnt a sign of long term problems???
> 
> Thoughts ???




Wow... I'd forgotten about these guys. Down almost 50% at the moment. Seems quite a large over reaction to a 20% profit downgrade. Might become a potential yield play in the next few months if they don't write that down. But I certainly wouldn't want to be long.


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## michael_selway (8 November 2007)

chops_a_must said:


> Wow... I'd forgotten about these guys. Down almost 50% at the moment. Seems quite a large over reaction to a 20% profit downgrade. Might become a potential yield play in the next few months if they don't write that down. But I certainly wouldn't want to be long.




I knew there was a quite a 'risk" with this sort of company

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 45.0 56.8 68.9 80.5 
DPS 23.0 28.3 35.6 41.4 *

thx

MS


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## GreatPig (8 November 2007)

Sheesh... I suppose this means they'll be even more aggressive chasing the money one of the kids owes them... 

GP


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## TheRage (8 November 2007)

This to me is another good example of long/ short trust managed investments getting into this one probably not to disimilar to Aristocrat Leisure in the past few weeks. Fund managers shorting on the likely expectation of further sp decline. It's interesting just because ccp is making the same Net profit as last year but is down 20% from expectation this company is suddenly ruined or so most people think. Look at the ROA on this company when compared with payout ratio on dividends. Company equity has been consistently growing with ROA still increasing. This year ROA will be down but by their own admission their profit has been reduced by an inability to convert new staff into their business process at the same rate. To me this seems like an issue that can easily be solved. I didn't own until today when I bought at 5.58. I have been waiting for an opportunity to jump on this ship and it sailed in for me today.


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## michael_selway (8 November 2007)

TheRage said:


> This to me is another good example of long/ short trust managed investments getting into this one probably not to disimilar to Aristocrat Leisure in the past few weeks. Fund managers shorting on the likely expectation of further sp decline. It's interesting just because ccp is making the same Net profit as last year but is down 20% from expectation this company is suddenly ruined or so most people think. Look at the ROA on this company when compared with payout ratio on dividends. Company equity has been consistently growing with ROA still increasing. This year ROA will be down but by their own admission their profit has been reduced by an inability to convert new staff into their business process at the same rate. To me this seems like an issue that can easily be solved. I didn't own until today when I bought at 5.58. I have been waiting for an opportunity to jump on this ship and it sailed in for me today.




Hi do you reckon the US subprime mess will affect this company directly or indirectly or negligible?

thx

MS


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## TheRage (9 November 2007)

michael_selway said:


> Hi do you reckon the US subprime mess will affect this company directly or indirectly or negligible?
> thx
> 
> MS




Hi Michael,

The majority of CCP's customers are Australian businesses such as banks, corporations etc. CCP is like a debt collector in the simplist sense so it could get exposure to sub-prime if it serviced sub prime organisations such as financial institutions within australia. To be honest the re-rating is probably more to do with what I said above but also due to the comment made within the release about the debt structure that they are no longer using. Not much clarification has been given so their is a question mark about whether their business model could be sustainable.


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## TRex (9 November 2007)

G'Day to you all,

Here is a link to some info on CCP  http://www.clime.com.au/media/copout0806.html 

I'm amazed that this reassessment of future earnings can have such an  immediate and drastic effect on the share price.

I bought these at $3.00 almost exactly 3 years ago, and am still a believer.  When the tough times set in, and debt collection thereby increases because of repayment defaults, business will come flooding in.

Reading the info on the above link, it seems to be money for old rope.

Regards,

Mike


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## fuzzboy (9 November 2007)

This article outlines how Credit Corp will benefit substantially from any further sub-prime shakeouts.

http://www.theaustralian.news.com.au/story/0,25197,22278654-17164,00.html


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## exgeo (9 November 2007)

I think sellers are wary of any financial stock at the moment. Perhaps also following the old maxim "sell on the first profits warning, buy on the 3rd".


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## michael_selway (9 November 2007)

TRex said:


> G'Day to you all,
> 
> Here is a link to some info on CCP  http://www.clime.com.au/media/copout0806.html
> 
> ...




Yep but the ironic thing is that it will be "harder to get debt", people simply cant pay it?



> Date: 9/11/2007
> Author: Sally Patten
> Source: The Australian Financial Review --- Page: 74
> Australian-listed Credit Corp has scaled back its profit expectations for the2007-08 financial year. The debt collection group says its profit for the periodwill be within the range of $A17m to $A19m, compared with earlier guidance of$A24m. Credit Corp enjoyed strong growth in net profit and revenue in 2006-07,and it says low staff productivity levels have contributed to the profitdowngrade, as have rising staff costs. Credit Corp is in the midst of asignificant expansion of its workforce, and has hired an additional 100 staff inthe last six months




thx

MS


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## bigdog (16 November 2007)

Today's SMH

http://www.smh.com.au/news/Business/Clime-to-stick-by-Credit-Corp/2007/11/16/1194766923562.html

*Clime to stick by Credit Corp*
November 16, 2007 - 11:55AM

Clime Capital Ltd says it will stick to its shareholding in Credit Corp Ltd, despite its shares falling about 50 per cent last week on an earnings downgrade.

Credit Corp became the listed investment company's second biggest shareholding after it downgraded its fiscal 2008 earnings forecast to between $17 million and $19 million from an earlier figure of $24 million.

Sharemarket opportunist David Tweed was notably absent from Clime's annual general meeting (AGM) in Sydney on Friday, having sold out of the company last year, after pestering its board at previous AGMs.

Chairman Roger Montgomery said he would have been more boastful about Clime's financial performance if the AGM has been held two weeks ago, before the Credit Corp downgrade.

"On this occasion the fall came before the pride," he told shareholders.

Mr Montgomery said Clime, which buys large portions of a small number of stocks, likes to hold onto business long term.

"While Credit Corp's share price has halved, its revenues won't miss a beat," he said.

"Revenue will grow by 30 per cent in 2008 driven by a perfect confluence of drivers."

It may take some time, however, for the market to recognise Credit Corp's value he said.

"Fund managers have a long memory and once they have been bitten once, they will remain twice shy."

Clime did not provide any earnings guidance for fiscal 2008.

Fiscal 2007 net profit rose 98 per cent to $17.4 million.

Clime shares fell 0.5 of a cent to $1.38. Credit Corp shares added nine cents to $6.24.


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## exgeo (7 February 2008)

1) Director Simon Calleia buys 18,500 shares on-market for $105,330 (= $5.69/share) since the earning downgrade.
2) Investors Mutal has been topping up lately.
3) Current guidance of $17-19m (revised down from $24m on 7th Nov 2007) equates to 40.1cps based on 44m shares. PE  = 10.4 (at sp of $4.20)


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## annalivia (8 February 2008)

I am buying up these shares bigtime.

Perhaps most importantly you should be aware that CCP’s profit is an accounting construct, dependent on the amortisation rate applied to the ledgers. While analysts will focus on the profit reported to shareholders, an owner would be more concerned with cash flow or ‘owner’s earnings’. I estimate 1) the business is producing operating cash flows after financing costs of circa $20 million per quarter and 2) the ledger book has grown by almost 25% since the last report. The face value of the ledgers today is
$2 bln. and one has to remember that even if no new ledgers were purchased, the face value of the book would rise by about 10% per annum due to the interest accruing on the outstanding balance (subject of course to absent collections, discounts given and ageing past statutory barriers).
This company is not losing money -  Staff are the key to this business and apparently Credit Corp is the best company in the industry to
be employed by.


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## ROE (8 February 2008)

It's been on a down trend for ages  never break new high...every new high is lower new high... 

Good stock I agree I was going to come in around $5  but I spot the trend so I sit on the side line.....until the trend changes I stay out 

Cant beat technical backed by fundamental research


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## ROE (8 February 2008)

annalivia said:


> I am buying up these shares bigtime.
> 
> Perhaps most importantly you should be aware that CCP’s profit is an accounting construct, dependent on the amortisation rate applied to the ledgers. While analysts will focus on the profit reported to shareholders, an owner would be more concerned with cash flow or ‘owner’s earnings’. I estimate 1) the business is producing operating cash flows after financing costs of circa $20 million per quarter and 2) the ledger book has grown by almost 25% since the last report. The face value of the ledgers today is
> $2 bln. and one has to remember that even if no new ledgers were purchased, the face value of the book would rise by about 10% per annum due to the interest accruing on the outstanding balance (subject of course to absent collections, discounts given and ageing past statutory barriers).
> ...




You are assuming people will always repay... most people in this situation can just ignore you all together and dont pay because once they reach this state they are probably already in the sh**t with other debt collectors as well.

But based on past performance this is an exceptional company and I like to buy but I have to give myself plenty of margin of safety


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## dhukka (8 February 2008)

annalivia said:


> I am buying up these shares bigtime.
> 
> _Perhaps most importantly you should be aware that CCP’s profit is an accounting construct, dependent on the amortisation rate applied to the ledgers. While analysts will focus on the profit reported to shareholders, an owner would be more concerned with cash flow or ‘owner’s earnings’. I estimate 1) the business is producing operating cash flows after financing costs of circa $20 million per quarter and 2) the ledger book has grown by almost 25% since the last report. The face value of the ledgers today is
> $2 bln. and one has to remember that even if no new ledgers were purchased, the face value of the book would rise by about 10% per annum due to the interest accruing on the outstanding balance (subject of course to absent collections, discounts given and ageing past statutory barriers).
> ...




Don't worry ROE, annalivia is obviously not bright enough to come up with his/her own analysis. Why else would he/she plagiarize CAM's October NTA report and post it here changing a couple of key words to make it look like his/her own? See attachment end of page *2* and start of page *3*. I guess you get desperate when watching the value of your investments tumble.


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## Buffettology (8 February 2008)

dhukka said:


> Don't worry ROE, annalivia is obviously not bright enough to come up with his/her own analysis. Why else would he/she plagiarize CAM's October NTA report and post it here changing a couple of key words to make it look like his/her own? See attachment end of page *2* and start of page *3*. I guess you get desperate when watching the value of your investments tumble.




ha ha ha ha ha ha ha ah ah ah aha ha aha, I once had a guy do that to me in a debate also.  Found out he got his analysis off E-trade by Huntleys!


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## ROE (8 February 2008)

dhukka said:


> Don't worry ROE, annalivia is obviously not bright enough to come up with his/her own analysis. Why else would he/she plagiarize CAM's October NTA report and post it here changing a couple of key words to make it look like his/her own? See attachment end of page *2* and start of page *3*. I guess you get desperate when watching the value of your investments tumble.




Ouch 

Obviously they preach Benjamin Graham and Warren Buffett but not factoring in margin of safety   just in case more brown sh*t hits the fan.....

Here is my analysis

In the world full of employment like we have here... it's very difficult to retain debt collector staffs.

Debt collection is a sh*t job, I wouldn't want to do it unless there are absolutely no job around. 

Imagine you turn up to someone house and try to collect debt, you look pretty damn hostile to these people and they are not going to treat you nicely.  You soon get depress and fetch up and look for other jobs and being a world full of jobs, it shouldnt be too hard.

and CCP will continue to train and replace high turn over staff and that going to cut into their bottom line. 

Amen


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## ROE (8 February 2008)

I just finished read the article and according to the article if they bought more in Oct-Nov 2007 .. they would lost another 25%  .... ouch that hurts.

I would talk to some of CCP collection staffs if these guys made time to talk to the CEO..The staff tell a much better story if i was to do a scuttle butt like Philip Fisher

I hope for their sake they are "vaguely right than precisely wrong" just like Uncle Warren always said


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## dhukka (8 February 2008)

Agree ROE, the turnover must be high in this line of work. Surely you can't put up with that chit for too long. 

I like the business but when the downgrade came, I didn't feel the need to be a hero and rush to buy, particularly given the overall market climate. Clime obviously felt they were getting a bargain. From memory I think they currently value CCP around *$6.40* or so.  If they were loading up when the stock was trading in the $5's surely they must be loading up more now if they believe their own valuation. 

I'm happy to wait until the half year report. If the company reiterates FY08 guidance and says their staffing problems are behind them I think *$4* provides a decent margin of safety. However, if staffing problems linger and earnings are downgraded again, this stock could get a whole lot cheaper.


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## annalivia (8 February 2008)

OK. You caught me with my pants/dress down.
Some of my best work is plagarism. It did get a nice little debate going and I am glad to see people discussing things other than technical analysis on ASF.
IMHO(more H than normal) this is still a compelling buy. This is an outstanding company with one profit downgrade. Reminds me of Buffett buying AMEX when the salad oil scandal hit. The stock keeps going down and I keep buying it. Time will tell if I am an idiot or not. Anyway I promise not to cut and paste and come up with my own line of discussion from now on. 

AL

"Be greedy when others are fearful" (Warren Buffett not Annalivia)


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## dhukka (9 February 2008)

annalivia said:


> OK. You caught me with my pants/dress down.
> Some of my best work is plagarism. It did get a nice little debate going and I am glad to see people discussing things other than technical analysis on ASF.
> IMHO(more H than normal) this is still a compelling buy. This is an outstanding company with one profit downgrade. Reminds me of Buffett buying AMEX when the salad oil scandal hit. The stock keeps going down and I keep buying it. Time will tell if I am an idiot or not. Anyway I promise not to cut and paste and come up with my own line of discussion from now on.
> 
> ...




That's big of you to own up to it anna. FWIW I think CCP is a good business but as stated above I'll err on the side of caution until we see what they have to say at the half year. If it's positive, the stock could pop. If not, you might get a chance to average down some more.  

Agreed it's nice to get a fundamental discussion without the tea leave readers. However it is amusing watching techies get dubfounded when their imaginary support lines get smashed. When you speculate on stocks without any reference to their value, you're bound to get stung.

As Mr Buffet said 'when the tide goes out, you get to see who's been swimming naked'


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## Buffettology (9 February 2008)

dhukka said:


> However it is amusing watching techies get dubfounded when their imaginary support lines get smashed.




LMAO!!!!!!!!!

However, I still think there might be something in using these supports in order to apply stop losses and buy in even cheaper...............

Havent had enough experience looking out for these supports yet and using them as a stop loss guide.

Dhukka or ROE have any opinion on this?


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## Buffettology (9 February 2008)

ROE said:


> Cant beat technical backed by fundamental research




Ah, here we go, I guess ROE at least beleives in technical to spot the trends.

However, do you apply a stop loss ROE at all on your investments?

I guess if we didnt bother applying technical analysis at all (spotting trends) and simply bought in at our trigger levels (price at which we beleive is a good deal and undervalued), then we might as well all just sell naked put options.

Interesting food for thought, thats for sure!


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## ROE (9 February 2008)

Buffettology said:


> Ah, here we go, I guess ROE at least beleives in technical to spot the trends.
> 
> However, do you apply a stop loss ROE at all on your investments?
> 
> ...




No I dont .. I usually get out when I think the stock is  fair/over value (sometimes I am right and sometimes I am wrong) but I dont regret it as that how I like to play and lock my profit in  Classic case that cost me a bit is Flight center (FLT)

I bought in around $10 or so ....private equity bit for $17 but failed..
then it hovering around 17-18 ...I think this stock is fair value and I made decent profit and private equity only prepare to pay $17 bucks for it so I guess this is all it worth but in my head I think it worth around $20...

but then I have doubt because the Private equity guys only want to pay $17.00.

I sold out around $18.70 only to see it hits $31 a few months later 
all in space of 14-15 months.

that is a wong case, a good case is IFM  I spot the trend and get out at 89 cents and its now 40 something cents 
time to buy it again.

PS: I found charting is very cool to spot someone big about to exit the stock..if that happen I join them...because by the time they finish, the stock is way way lower  and then I buy back in when they finished exiting.

I dont think I'm a techie guy or any good at charting and I dont use hundred of indicates they have.. I just use a few I know how to use well and that is all I know...

I dont really have particular tactics or anything special ...sometimes I just buy because I'm so sure of the stock and regardless if some big guy is selling or buying i still do..other times I'm not 100% certain, I consult the charts 
and other information to reaffirm my decision and it is not always good news but on average it work out very well.


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## dhukka (9 February 2008)

Buffettology said:


> LMAO!!!!!!!!!
> 
> However, I still think there might be something in using these supports in order to apply stop losses and buy in even cheaper...............
> 
> ...




Buffettology,

Stop losses don't figure into my strategy because I don't trade stocks. Traders are not concerned with value. They don't need to be 'right.' In fact they can get it wrong more times than they get it right and still make money by cutting losses short (using stop losses) and letting profits run.

I, and I think ROE and probably yourself are trying to get it right or at least approximately right. If we do get it about right there is no need for stop losses. If I used a stop loss it would mean I am not sure, and if I'm not sure, I won't invest. Doesn't mean I can't be wrong of course.


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## Buffettology (9 February 2008)

Yeh Dhukka I agree.  However, do you use any technical analysis such as ROE simply to spot trends before you buy?  I mean, if you are about to buy a stock at your trigger price, but it appears its on a downtrend and you could get it cheaper, do you then hold off, or simply have a trigger price and execute once it reaches that trigger?  

I am more like you ROE than Buffett, in that once I feel a company I am holding is above fair value, I sell out and take my profits.  Like you, it has meant I miss out sometimes, but the majority of times I end up being able to buy that stock even cheaper only months down the track.  However, sometimes I end up buying and selling within the year, which is bad for my tax!  

Have any of you guys looked into naked put options and any thoughts?  This of all options strategies I have read (not many), seems the most common sense for the value investor such as ourselves.  Get to take a premium the majority of times and if the stock does hit a good price, get to own the stock instead.  Income generation combined with value investing all at once and a good idea if its taking a while for a stock price you find applicable to come up (down in real terms).


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## chops_a_must (9 February 2008)

Buffettology said:


> Have any of you guys looked into naked put options and any thoughts?  This of all options strategies I have read (not many), seems the most common sense for the value investor such as ourselves.  Get to take a premium the majority of times and if the stock does hit a good price, get to own the stock instead.  Income generation combined with value investing all at once and a good idea if its taking a while for a stock price you find applicable to come up (down in real terms).




I've often wondered why value investors don't do this. Makes perfect sense to me.

The problem is you'll need to pony up serious money on a lot of blue chips if you do it. Otherwise, would look great to me from a value investor's perspective. Earn the premium if a stock you like doesn't get your preferred price. And the premium paid to you effectively makes the stock cheaper if you are excercised. Can't be guaranteed to be excercised when you want though...

Options writing strategies to me make a hell of a lot of sense especially for value investors/ buy and holders.


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## Buffettology (9 February 2008)

chops_a_must said:


> I've often wondered why value investors don't do this. Makes perfect sense to me.
> 
> The problem is you'll need to pony up serious money on a lot of blue chips if you do it. Otherwise, would look great to me from a value investor's perspective. Earn the premium if a stock you like doesn't get your preferred price. And the premium paid to you effectively makes the stock cheaper if you are excercised. Can't be guaranteed to be excercised when you want though...
> 
> Options writing strategies to me make a hell of a lot of sense especially for value investors/ buy and holders.




What do you mean by pony up serious money on a lot of blue chips?  As in, keep that aside encase the option is exercised and you have to buy the stock?  

The big factors here though, as you say, are that it is not excercised when you want and also that if the stock is in a serious downtrend (announces bad profit and the stock plummets), you end up with a stock of which the value has changed and your new rating maybe below your strike price.  Your not as free to make improvised decisions, but thats your write-off for the premium.  

What are options writing strategies?  As in selling options?


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## ROE (9 February 2008)

I think everyone has their way of doing thing and I dont think there is a only one way or better way..Which ever way you are comfortable with stick with it if it works well. I like thing, dont fix if it aint broke

I am not a sophisticate investors and I dont like to involve myself in complex thing like derivatives such as options and CFDs when I don't have too.

I aint saying it bad or good but it's not for me.. I did the research and I did a fair bit of reading and I come to the conclusion too much un-necessary risk for me.

I just go slow and one step at a time... if I can make 10% this year, 15% the next or 5% the year after I'm very happy with it as long as I dont go backward.

My rule number 1 is NEVER lose capital.


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## Buffettology (9 February 2008)

Yeh, I dont think options (at least the simple strategies I have read) are all that risky (infact far less risky than stocks, other than buying Deep In the Money call options).  But naked put selling and spreads (either trying to get the volatility edge or credit spreads) are not anymore risky than value investing. Either way, I am always looking out for ways to increase my investment returns, though I do beleive fundamentals are of paramount importance and will always be my key.  Thats why the only reason I would ever buy any kind of option would be DITM calls and I would make sure they are LEAPS (of around 3 years, so fundamentals have time to work their magic on the price).  Hope I have got all my terms correct 

As far as returns, I look to always beat the index.  I just cant take opportunity cost out of my mind, and if bank interest or the index are beating my returns, then I would be piZZed, considering the time and effort I put in myself (though I enjoy it).  Thank god to this day I am still far superceeding both.


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## chops_a_must (10 February 2008)

Buffettology said:


> What do you mean by pony up serious money on a lot of blue chips?  As in, keep that aside encase the option is exercised and you have to buy the stock?
> 
> The big factors here though, as you say, are that it is not excercised when you want and also that if the stock is in a serious downtrend (announces bad profit and the stock plummets), you end up with a stock of which the value has changed and your new rating maybe below your strike price.  Your not as free to make improvised decisions, but thats your write-off for the premium.
> 
> What are options writing strategies?  As in selling options?




I mean, on a single options contract for a $30 stock, you would need to have 30k to not get into a margin call.

A far better strategy, I think, for value investors would be to pay for the stock in cash, and write covered calls at the value/ price you think is fair value, and that you would agree to sell at. At least to start off with. It's what I'm intending to do for stocks that aren't paying dividends, but that I don't necessarily want to sell.

Options writing strategies are when you initiate the option trade itself. So you accept the risk of being excercised. You sell to open a call, or you sell to open a put. I think that's how it works. I am very very much a noob on this topic, so you wont be that far behind where I am here!

I thoroughly agree with your other sentiments expressed here though. It's all about beating the index, inflation and achieving positive returns each year. That means using multiple means and strategies, and if that involves passive income alongside dividends, then great. It doesn't matter how you get there IMO, by whatever means, so long as that is the goal, and that is what is continually worked towards and achieved. To me that is success in the market.


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## Buffettology (10 February 2008)

chops_a_must said:


> I mean, on a single options contract for a $30 stock, you would need to have 30k to not get into a margin call.
> 
> A far better strategy, I think, for value investors would be to pay for the stock in cash, and write covered calls at the value/ price you think is fair value, and that you would agree to sell at. At least to start off with. It's what I'm intending to do for stocks that aren't paying dividends, but that I don't necessarily want to sell.
> 
> Options writing strategies are when you initiate the option trade itself. So you accept the risk of being excercised. You sell to open a call, or you sell to open a put. I think that's how it works. I am very very much a noob on this topic, so you wont be that far behind where I am here!




I dont get the first part, a margin call, dont even get what that means?  For a $30 stock, the most you would need is 100X so 3k isnt that right?  I mean if you sell the naked put option and it falls to zero, that is as far as your downside can go, 3k?  After you are exercised and you end up with 100 shares in a stock worth nothing.

HA HA, funny you should mention covered calls, this is the part I just read and is my favourite of all the strategies.  Setting the strike price at fair value, exactly what I thought when reading it and is something I will be doing a LOT more of once I set up an options trading account.

Isnt what you just said, about options writing strategies, selling to open a call or selling to open a put, just simply selling call or put options?

Yeh, this is definately all new lingo and does my head in sometimes thinking about it!  As was in the thread by WayneL, I need this to become unconciously competent so I just do it by instinct.  Until then, I will have to keep processing it everytime I think of the different strategies.


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## Freeballinginawetsuit (10 February 2008)

Good discussion Chops and Buffet...........the bank manager will love ya also (they always like a passive income stream off an asset base).

Cheers


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## chops_a_must (10 February 2008)

Buffettology said:


> I dont get the first part, a margin call, dont even get what that means?  For a $30 stock, the most you would need is 100X so 3k isnt that right?  I mean if you sell the naked put option and it falls to zero, that is as far as your downside can go, 3k?  After you are exercised and you end up with 100 shares in a stock worth nothing.
> 
> HA HA, funny you should mention covered calls, this is the part I just read and is my favourite of all the strategies.  Setting the strike price at fair value, exactly what I thought when reading it and is something I will be doing a LOT more of once I set up an options trading account.
> 
> ...




Yep. I took a first bite at learning all this last March. Decided to use futures eventually instead, because options did my head in at first. So keep at it, it will eventually come. It's like when I learn very complex philosophy. If I don't get it straight up, I will go away for a few days or whatever, think it through, and when it's not at that overwhelming level, re-think it. So it is with this. I'm pretty sure options writing would be exactly what you would be looking for, so spending the time on it will be well worth it.

I think in Australia, options contracts are in 1000 lots. So 1000x30 = 30k.

A margin call is when you don't have enough collateral to secure the debt. So, you don't have enough cash, or your asset level, i.e. stocks has fallen too low to cover the intended expenditure.

The example you posted, you would lose 30k (if my contract sizes are correct), this is why there is always a larger premium paid for puts than for calls. There is always a stronger motive to excercise puts than there is calls.

I think you are getting confused with selling to open (writing) an options contract, with simply selling an options contract. When you sell to open a contract, you haven't previously _bought_ a contract. When you sell a contract, you already have bought a contract, which you are then selling, one in which you did not write. I think that is where you may be getting confused. If I have it correct myself!

Great minds with the covered calls... lol! It is the most popular basic strategy, or hedging strategy, I think. It's quite good for my learning, writing all this out actually. Hopefully you can get a toe hold on all this, because when you begin  to learn complex things, it's mighty satisfying.


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## Buffettology (10 February 2008)

chops_a_must said:


> Yep. I took a first bite at learning all this last March. Decided to use futures eventually instead, because options did my head in at first. So keep at it, it will eventually come. It's like when I learn very complex philosophy. If I don't get it straight up, I will go away for a few days or whatever, think it through, and when it's not at that overwhelming level, re-think it. So it is with this. I'm pretty sure options writing would be exactly what you would be looking for, so spending the time on it will be well worth it.
> 
> I think in Australia, options contracts are in 1000 lots. So 1000x30 = 30k.
> 
> ...




Yeh, I definately know what you mean about the going away and letting it sink in.  I used to do the same at Uni with Economics when it became really complex, especially with trade models. 

X1000, damn, ah well, I wouldnt buy 100 contracts anyways.  Wont have to worry about the margin call, will only ever use what I actually have in my bank, and fortunately that is a decent amount.

Why is there a stronger motive to exercise puts than calls?  I thought price came down to those 6 factors, strike price, volatility, contract length etc etc.

No idea what you mean about writing a contract.  Isnt that what market makers do?  We just buy or sell the contracts.......ha ha, my brain is fried, 12 hours straight of options today has done my head in.  

Yeh, its slowly all sinking in, well at least just the basic strategies and terms.  I think I have them downpat now, just need to reread as I start implementing them down the tack.

Ive only started learning about options 4 days ago I think now, so still a lot to learn!

Oh and as for writing it out it all out, thats why with every post now I try and relate an options strategy to it if I can, just so I can keep writing it out and let it sink in.  

Think its about time for bed!  What a way to spend a Saturday night  he he, the joy of us investment nerds!


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## chops_a_must (10 February 2008)

Buffettology said:


> Yeh, I definately know what you mean about the going away and letting it sink in.  I used to do the same at Uni with Economics when it became really complex, especially with trade models.



You probably had problems with economic models because the complexity is an attempt to hide the invalidity of what they present.

As I said to the Economics professor who tried to get me to study it, "No way! A retarded chicken can spot the problems in what you teach." One day I will write it all down I swear.  Absurdum ad infinitum is the phrase that comes to mind for short.



Buffettology said:


> X1000, damn, ah well, I wouldnt buy 100 contracts anyways.  Wont have to worry about the margin call, will only ever use what I actually have in my bank, and fortunately that is a decent amount.



One way to deal with it is to look at stocks below $10 perhaps. That makes it easier to trade multiple contracts, and I assume to vary hedging strategies down the track. A lot of theories and testing seem to point to lower dollar priced stocks being more volatile, especially to the upside, which would lead to better premiums anyway. Might be a win/win situation.



Buffettology said:


> Why is there a stronger motive to exercise puts than calls?  I thought price came down to those 6 factors, strike price, volatility, contract length etc etc.



Loss aversion. Downward moves tend to be faster and longer for the time in the individual thrust, than sustained upward moves. Puts are also used to hedge for people with long positions, which is most. So the demand on balance, especially in volatile times is higher. I'm sure there are a heap of other reasons as well.




Buffettology said:


> No idea what you mean about writing a contract.  Isnt that what market makers do?  We just buy or sell the contracts.......ha ha, my brain is fried, 12 hours straight of options today has done my head in.



Anyone can write a contract with the correct set up, not just market makers. We are looking at selling the _written_ contracts (writing them), not selling already purchased contracts.



Buffettology said:


> Yeh, its slowly all sinking in, well at least just the basic strategies and terms.  I think I have them downpat now, just need to reread as I start implementing them down the tack.
> 
> Ive only started learning about options 4 days ago I think now, so still a lot to learn!
> 
> ...



4 days and you are writing about it. Not bad. I usually like to wait a while, so I don't seem like an idiot. Lol! But you don't learn if you don't speak up...

At the end of the day, I think the market is a pretty big meeting point for people from every where, who deep down are addicted to learning.


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## Buffettology (10 February 2008)

Yeh, most economic models are useless.  However, some very basic ones are extremelly accurate I beleive, and most good lecturers teach that they are only models and hence, cannot always replicate the real world.  However, sometimes there are small basic assumptions you can change to allow the model to replicate the real world.  One example is I studied fiscal and monetary policy since 1992 in order to see its outcomes.  Pretty impressive I thought, the way they used proactive techniques and could actually alter trends before they occured or just after they started impacting.

Interesting on the smaller stocks having higher volatility to the upside.  Thx.

Very interesting on the puts as well!  Makes good sense, but wouldnt this make the stocks more volatile to the downside?  Which contradicts the above statement taht smaller stocks have higher volatility to the upside?  Maybe I am getting these terms confused now........

As far as the writing contacts, I think I will skip that part for now!  ha ha, just confusing me more.  I read about how market makers operate, but only over 20 pages or so.  I think I would need an entire book to fully understand how it all works!  

Yeh, 4 days, need time for it to sink in now, so I will lay off it after today.  Then try add to it later on.  But thats my philosphy, questions questions questions, the more I ask, the more I learn!  Just wish I had someone more experienced than me in this area so I could just ask them direct and get them to help explain it.  Only people I know who trade options for a living are in another City to me.  

Thanks


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## annalivia (10 February 2008)

Interesting discussion on put options.

The following may be of interest.........

" In April 1993, with Coca Cola stock hovering around $39 per share (before splits), Buffett valued the company and determined that he would be interested in buying some more shares if the price fell below $35.

He wrote 5 million put options with a $35 strike price.

If Coke stock fell below $35, the option takers would "put" their shares to him, Buffett would be forced to buy at $35. This was perfectly fine for Buffett because he wanted to buy at that price anyway. If Coke rose instead Buffett would be happy enough, he collected a $1.50 option premium ($7.5 million) even if the stock never fell to his target. Being a strict value investor he would not have been interested in buying Coke at more than $35 so therefore the fact that it went up without him buying it was perfectly fine by him.

This is the only publicly known case where Buffett has used options, but for all we know there may be many more. It is perfectly logical that when a person has definite ideas about valuation and can name a price at which he would buy or sell that option writing could greatly increase the income from your portfolio."

As so I don't get in trouble again for plagarism the full article can be read here....
http://travismorien.com/invest_FAQ/content/view/186/64/

Another dude who uses this strategy is Ahmet Okumus whom I read about in Stock Market Wizards.
Google him if you haven't got the book.

AL

“In our view, investment students need only two well-taught courses – How to Value a Business, and How to Think About Market Prices."  -1996 Annual Report of Berkshire Hathaway


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## Buffettology (10 February 2008)

Thanks for that Annavlivia, extremelly interesting.

I have never read a case of Buffett using options either, but if he used it in this case, I am sure he has used it in others!

So did he end up receiving the Premium or was he exercised?


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## annalivia (10 February 2008)

Buffettology said:


> So did he end up receiving the Premium or was he exercised?




Don't know the answer to that.

I checked out the price in 93 to see what happened but with the stock splits it doesn't seem to make any sense.

Either way the man would have made money.(again)


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## Buffettology (11 February 2008)

Not sure who said they were holding this, but WOOOOOOOWWWWWWWWWWWWW!!!!!!!!!!!!!!!  I would HATE to be on board now! A few window jumpers perhaps..............

And CAM has only taken a 10% hit so far!


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## dhukka (11 February 2008)

Looks like you've got a chance to average down some more anna. Horrible announcement today, seems there are a lot more problems than just staffing issues. Stock is down 65% as I type. Got to be happy you didn't jump in early on this ROE?


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## ROE (11 February 2008)

Damn Clime is precise wrong on this stock.... Am I'm glad I stick to my conviction rather than following someone else recommendation. 

Stock free fall


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## Buffettology (11 February 2008)

Anyone have a view on this in its current wave of desperation?  Could become a very nice value for the long-term, I just cant be fukced doing all the calculations (with a bit of guess work as far as future flows, assuming their $10-12 mil NPAT even comes to fruition).


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## ROE (11 February 2008)

Now I come in for a kill, I ordered 10,000 shares 
I got it all worked out and waiting for this day


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## rgdk (11 February 2008)

There may be long term value in this but every institution I think has lost faith in management and that takes quite a while to rebuild. I think that they will have to put a double century on the board before that happens...

All I can say is thank god I recently reshuffled out of CCP into Beach Petroleum during the recent volatility.

Nice to see that I can make some correct decisions to counteract the bad ones (see the MFS thread for more on that!)


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## dhukka (11 February 2008)

Buffettology said:


> Not sure who said they were holding this, but WOOOOOOOWWWWWWWWWWWWW!!!!!!!!!!!!!!!  I would HATE to be on board now! A few window jumpers perhaps..............
> 
> And CAM has only taken a 10% hit so far!




This is? Was? CAMs biggest holding, Roger Montgomery has made a major boo boo on this one. Remember the statement he sarcatically made back when the intial downgrade was made?



> "One of my peers who has sold CCP, said "downgrades come in threes Rog".  I trust that was not the only 'analysis' he did.




Mr Montgomery is wearing some egg on his face after this one. 

There will be a lot of pissed off CAM shareholders and other stockval users who bought in on Clime's glowing reports of the company. 

Just a quick back of the envelope. The company has a forecast dividend of 20 cps this year. Profit has been downgraded around 40%. Even if you half the dividend that company is paying about an 8.5% yield, but how safe is that yield?


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## Buffettology (11 February 2008)

ROE said:


> Now I come in for a kill, I ordered 10,000 shares
> I got it all worked out and waiting for this day




Really?  You believe its cheap and still viable for great returns in the long-run..........................................?


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## ROE (11 February 2008)

At this price I factor in all my margin for safety, just load it up and dont ask questions ... 
like people who sell out on down grade..sell first ask later... 

in this case I buy first ask question later


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## Buffettology (11 February 2008)

dhukka said:


> This is? Was? CAMs biggest holding, Roger Montgomery has made a major boo boo on this one. Remember the statement he sarcatically made back when the intial downgrade was made?
> 
> 
> 
> ...




ha ha, I sure wouldnt like to be Roger right now!  Maybe he will resign and they can hire us fellas to run the company 

I saw the div payout, looks good, but like you say, how safe is it........

Not to mention, has this slaughter ended as of yet?  

I really feel sorry for you Anna, I have not taken such a big hit in my times yet, but I can only imagine the pain, especially if a large % of your portfolio was involved.


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## ROE (11 February 2008)

Buffettology said:


> Really?  You believe its cheap and still viable for great returns in the long-run..........................................?




Ok quick run down on this business as I been keep an eye on it and work out how they make their money..

They buy debt real cheap 10c to 20c to a dollar value...
If they can recover $1 wow that exellent sh*t if not they only need to recover partial debt to still make money.

Currently we are in full employment so people having trouble with debt, they can structure easy payment and can recover a lot of those debt... but like I said nothing is a sure thing but at this price I'm willing to take the risk.

blah blah I don't want to ramp on anyway do you own research etc...


----------



## TheRage (11 February 2008)

dhukka said:


> This is? Was? CAMs biggest holding, Roger Montgomery has made a major boo boo on this one. Remember the statement he sarcatically made back when the intial downgrade was made?
> 
> 
> 
> ...




I was under the impression TRS was Cam's biggest shareholding then CCP was next. I agree that Roger has some explaining to do. Surely an institution like Cam should have access to information from management which could give an indication that NPAT was going to drop another 40%. I smell a stinky management rat in credit corp at the moment. How the hell does it take 4 months to work out that things are going to be 40% worse. I broke my own investment rules on CCP when I bought in 5.6. I have a rule never to buy into a stock with share specific weakness like a downgrade until enough time has passed to see whether there will be a turnaround. I simply loved the numbers on this one enough to ignore my own rule. Stupid me. Anyway CCP only makes up 5% of my portfolio. But I am mad at myself and the lesson has been learn't.


----------



## Joe Blow (11 February 2008)

100 character minimum post length in stock threads is not a joke and we expect people to abide by it.

Padded out posts WILL be removed.


----------



## Buffettology (11 February 2008)

What was your order filled at ROE?  Im seriously contemplating buying this, as ROE based on current prices would still not be THAT bad and one-off bad news signs like this are always good buying opportunities.  

I might buy up a small parcel.


----------



## ROE (11 February 2008)

Yes my ordered is filled at market price  .. I don't muck around when stock fall this far..i come in at market price...

I'm selling down some of other stock to free up cash and come in for more kill depending what price it trades by the day end.


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## prawn_86 (11 February 2008)

ROE said:


> Yes my ordered is filled at market price  .. I don't muck around when stock fall this far..i come in at market price...
> 
> I'm selling down some of other stock to free up cash and come in for more kill depending what price it trade by the day end.




Can i ask what your timeframe for this is ROE?

Are you looking for a dead cat bounce? or will it be a longer term hold?

If it keeps falling do you have a stop in place?

I have always thought that drops like this present an opportunity, but have always been worried of a continuing slide.

Any info appreciated


----------



## dhukka (11 February 2008)

dhukka said:


> The biggest risk here seems to be that CCP like their competitors have done in the past will overpay for a ledger and have to write it down. As the analyst at Linwar points out CCP have the most conservative amortisation policy among their competitors writing off a substantial portion of the ledger in the first few years but that still doesn't matter if you overpay for a ledger.
> 
> An upturn in bad debts is being anticipated by the major banks at the current point in the credit cycle giving further growth opportunities for CCP. However with more debt purchases comes the increased chance of overpayment. If the bad debt cycle is particularly strong management may be tempted and get greedy. Investors need to have faith in management to adhere to their tried and tested purchasing policy however there is always the chance that a bad ledger slips under the radar. Linwar forecast CCP to able to fund debt purchases from cashflow from 2008, this will improve ROI and also lend stability to the balance sheet and remove some of the risk.
> 
> Given their track record I think management should be given the benefit of the doubt but I'd be watching for any deviation in their stated investment and gearing policies




I wrote this back in January 07. As then I think the biggest risk is that they overpay for ledgers and can't recoup what they paid.  
CCP typically buys ledgers for *15-20c *on the dollar and is able to recoup around *60-70c* on average. They are not talking about writedowns in the latest announcement but they are obviously not recouping as much as they have historically. 

Remember they are still making a profit, they are not losing money...yet. I went in to Stockval to run my own valuation on the company and it has magically disappeared from the list.


----------



## dhukka (11 February 2008)

TheRage said:


> I was under the impression TRS was Cam's biggest shareholding then CCP was next. I agree that Roger has some explaining to do. Surely an institution like Cam should have access to information from management which could give an indication that NPAT was going to drop another 40%. I smell a stinky management rat in credit corp at the moment. How the hell does it take 4 months to work out that things are going to be 40% worse. I broke my own investment rules on CCP when I bought in 5.6. I have a rule never to buy into a stock with share specific weakness like a downgrade until enough time has passed to see whether there will be a turnaround. I simply loved the numbers on this one enough to ignore my own rule. Stupid me. Anyway CCP only makes up 5% of my portfolio. But I am mad at myself and the lesson has been learn't.




I think you're right. It was their biggest holding prior to the first downgrade. Then the whack to the share price put it in second place. Now it is possibly further down the list. Last time CAM came out and said confidently that they were loading up, I wonder if they are loading up today?


----------



## ROE (11 February 2008)

prawn_86 said:


> Can i ask what your timeframe for this is ROE?
> 
> Are you looking for a dead cat bounce? or will it be a longer term hold?
> 
> ...




I'm a long term holder so in the interim it may go hovering around $1-$15 but it's a viable business going forward.
I'm not getting out any time soon so if it drop to 50 cents I'm still not getting out... there is no down out strategy at this price for me


----------



## Buffettology (11 February 2008)

dhukka said:


> I think you're right. It was their biggest holding prior to the first downgrade. Then the whack to the share price put it in second place. Now it is possibly further down the list. Last time CAM came out and said confidently that they were loading up, I wonder if they are loading up today?




Yes, it would be very interesting to know if CAM are loading up on this today!  Only time will tell!  

I just bought a small parcel, will let it sit there now for the longer-term and see how it goes.  Will re-evaluate once we get the final 07-08 figures.


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## dhukka (11 February 2008)

Someone just took out that huge bid of 500,000 at $1. There is still a lot of selling pressure here. Might chuck in a bid at *$0.80*.


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## Pager (11 February 2008)

Ive had a bite at 99 cents, as with other beaten up stocks Ive bought only a small parcel.

Not sure the bad announcement warrants a 75% sell off from an already beaten up stock???? Looks well over the top to me, even at the open of $1-80 seemed extreme!

Fingers crossed


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## Buffettology (11 February 2008)

dhukka said:


> Someone just took out that huge bid of 500,000 at $1. There is still a lot of selling pressure here. Might chuck in a bid at *$0.80*.




Yeh, but also notice when the price does get near $1, you get some HUGE buyers coming back in very quickly.

I think they are trying to scare the market by showing a small buying que so they can get in cheaper (make the sellers panic and offer lower prices).


----------



## annalivia (11 February 2008)

Holy s***.
I'm at work and just checked my portfolio. I am a big holder of CCP and CAM.
Initial reaction was shock. Next reaction…..buy more.
Final reaction….go to lunch, go for a walk(I still have 2 legs and there will be food on the table tonight) and think.
This company is not losing money. Could be the buy of the year.
I will probably wait to see what CAM have to say.

AL 

PS	It's only money

AL


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## annalivia (11 February 2008)

I never did go for that walk, I just bought 10,000 more.
Now it's time for that walk and maybe come back and buy more later.


AL

"Be greedy when others are fearful."


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## ROE (11 February 2008)

dhukka said:


> Someone just took out that huge bid of 500,000 at $1. There is still a lot of selling pressure here. Might chuck in a bid at *$0.80*.




Hello Margin call anyone ? 
Damn by the day end there will be winners and losers out of this stock.


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## chops_a_must (11 February 2008)

The yield does indeed look shaky. I'm not sure they are making enough money at the moment to continue to pay one.

What do you think the chances are of this company repoing itself?


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## blaze87 (11 February 2008)

hm..
let assume that we use the reported 10 million net profit for yr 2008
and if we include the estimated max restructing cost of 5 million

the overall npat would be 5 million
applying a margin of safety of 50% for this crazy company

so that would make a npat of approx 2.5 million
note this is a really rough estimate but any1 care to comment?


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## TheRage (11 February 2008)

blaze87 said:


> hm..
> let assume that we use the reported 10 million net profit for yr 2008
> and if we include the estimated max restructing cost of 5 million
> 
> ...




Why would you include the restructuring cost of 5 million into the NPAT when theoretically this would have been accounted for in the NPAT guidance?


----------



## blaze87 (11 February 2008)

it says in the announcement
the guidance does not include the restructuring costs.
i double check on smh
http://business.smh.com.au/credit-corp-smashed-by-dud-debt/20080211-1rht.html


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## dhukka (11 February 2008)

TheRage said:


> Why would you include the restructuring cost of 5 million into the NPAT when theoretically this would have been accounted for in the NPAT guidance?




The announcement says 







> "This result is* before *anticipated costs associated with a restructure to be implemented by Directors following a detailed review of the Company's operations. These costs and charges and not expected to exceed *$5 *million.




So the *$10-$12m *is before the *$5m *charge. It's pretty hard to put faith in any earnings forecasts at the moment. Management credibility is shot.


----------



## blaze87 (11 February 2008)

lol that little play on words will made a major difference.
hope nobody was going in thinking it was getting 10-12 million npat


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## TheRage (11 February 2008)

blaze87 said:


> it says in the announcement
> the guidance does not include the restructuring costs.
> i double check on smh
> http://business.smh.com.au/credit-corp-smashed-by-dud-debt/20080211-1rht.html




The ASX announcement is somewhat ambiguous. I re-read it again and it could be taken either to come from NPAT or from EBITDA. Obviously if the restructuring cost came from EBITDA it would be much more favourable than NPAT.  Blaze your numbers are not far wrong if they cost comes straight out of NPAT and if you assumed a margin of safety as you said of 50%. I would imagine though that for this to happen that the real restructuring cost would need to be farily significant. 

My take on what they mean is that the 5 million would be applied as a expense to EBITDA in the following financial period so based on the assumption that 2008-2009 will be the same EBITDA then 80 million will in fact be 75 million and if we work on a factor of NPAT to EBITDA of 12.5% (80million/ 10million) then Net profit for the next financial year, assuming all things equal would be 12.5% of 75million = 9.375 million.


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## ROE (11 February 2008)

dhukka said:


> The announcement says
> 
> So the *$10-$12m *is before the *$5m *charge. It's pretty hard to put faith in any earnings forecasts at the moment. Management credibility is shot.




They are going too far too fast and they need to slow down...when you grow too fast people expectation are high and they going to price you to perfection
and when those perfection became flaws they hammer you till you bleed.


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## annalivia (11 February 2008)

Checked out stockval and got the following...

The StockVal team is currently assessing the impact of CCP's earnings downgrade issued on 11/02/2008.  The new valuation will be released once talks with CCP Management have been finalised.


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## ROE (11 February 2008)

annalivia said:


> Checked out stockval and got the following...
> 
> The StockVal team is currently assessing the impact of CCP's earnings downgrade issued on 11/02/2008.  The new valuation will be released once talks with CCP Management have been finalised.




What is the stockval thing? some program tell you when you buy and sell stocks ? .... and why do you use it? if that is the case


----------



## Buffettology (11 February 2008)

ROE said:


> What is the stockval thing? some program tell you when you buy and sell stocks ? .... and why do you use it? if that is the case




Yeh, what is stockval?  Is it a valuation that CAM applies?  

I just value stocks myself, for better or for worse.


----------



## cordelia (11 February 2008)

I wonder if all those who bought this stock last Nov thought it was a bargain......hasn't gone anywhere but south since.....


----------



## Pager (11 February 2008)

Ive noticed not only Clime but also Wilson funds (WIL) also hold a fair few CCP 

So much for the so called experts


----------



## annalivia (11 February 2008)

Also Anton Taglieferro from Investors Mutual Limited has been buying up.
*
Date	          Shareholder	              Previous %	New %	Shares *
17-12-07	Investors Mutual Limited	5.04%	6.34%	567,131
11-01-08	Investors Mutual Limited	6.34%	7.64%	568,074


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## blaze87 (11 February 2008)

lol, dun haf stockval, but tell me when u get the results.
stockval is a program by cam to value stocks. i think it uses IRR primary

anyways that factor of 12.5% seems good considering npat/ebita was 20 and above % for the previous 4 years

9npat million would be an apprioriate figure without considering a margin of safety. but i still maintain that ia margin of 50% or more is needed considering the two profit downgrades. from its inital estimate 24 million npat to 9 million npat, that is a major bullet to its management credibility. 
what is everyone opinion of its eps growth rate for year 2009?


----------



## GOSAFAS (11 February 2008)

Can anyone confirm or deny a rumour that the same crew that shorted Allco are shorting CCP big time?


----------



## josjes (11 February 2008)

annalivia said:


> Also Anton Taglieferro from Investors Mutual Limited has been buying up.
> *
> Date	          Shareholder	              Previous %	New %	Shares *
> 17-12-07	Investors Mutual Limited	5.04%	6.34%	567,131
> 11-01-08	Investors Mutual Limited	6.34%	7.64%	568,074




Investor Mutual has been calling so many dud investments a buy all the way down:

CYG (increasing holding from $6 all the way down to $2.5 for over 2 years)
IAG (calling it a buy at $5.5, and now $3.5)
TAH (calling it a buy at $16, and now $13.5)
and more duds from the past PBB, AMC, SPT, ENE.

I have given up on these guys.


----------



## TheRage (11 February 2008)

It wouldn't surprise me if a couple of the hedge funds are into CCP today. The massive Sp drop could also be reflective of some margin lending gone bad.


----------



## TheRage (11 February 2008)

blaze87 said:


> lol, dun haf stockval, but tell me when u get the results.
> stockval is a program by cam to value stocks. i think it uses IRR primary
> 
> anyways that factor of 12.5% seems good considering npat/ebita was 20 and above % for the previous 4 years
> ...




Therefore working on a NPAT of 4.5 million, 50% margin of safety, with 43 million shares outstanding gives earnings of 10cents per share. If CCP have a payout ratio of 50% then 5 cents per share will be returned. Therefore yield will be 5% with large margin of safety applied. Without margin of safety yield will be 10%.


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## Joe Blow (11 February 2008)

Claims such as the involvement of hedge funds in the trading of this stock need to be backed up with some solid evidence. Otherwise, don't make the claims.

Lets stick to the facts please.


----------



## Pager (11 February 2008)

Well if some hedge funds have been short selling this and are responsible for such a capitulation, they have done a bloody good job today


----------



## TheRage (11 February 2008)

I said that it wouldn't surprise me that hedge funds were getting into this stock. This is a comment not a statement of fact and I appologise if it was read that way and I will refrain from drawing conclusions. 

I would be interested to know how this could be verified unless you were the short seller anyway. Do short sellers/ hedge funds have the same disclosure requirements as someone who has owned a stock and sells a large portion of their holding?


----------



## Joe Blow (11 February 2008)

Nothing wrong with a little speculation, but when somebody says they know something to be a fact, and are asked to provide evidence and are then evasive. Well that is stepping over the line... at least on this forum. 

If you claim to know something to be factual then you are expected to provide some evidence of it. Otherwise, please don't post it on ASF.


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## annalivia (11 February 2008)

blaze87 said:


> lol, dun haf stockval, but tell me when u get the results.
> stockval is a program by cam to value stocks. i think it uses IRR primary




In defence of Stockval I have used it to great advantage over the last few years. I do not have the time or skill to put an intrinsic value on most stocks so it helps enormously with this.

In defence of Roger Montgomery I have always found him to be honest and forthright in his assessments of companies. Once again I cannot get out and talk to Management like he can so I rely on him doing this. 

He talked to CCP last time and stated

"Following three meetings with management, including CEO Geoff Lucas, we are confident that the value of the ledgers has not deteriorated. Indeed if more experienced collections staff occupied the seats of the new staff, collections at that seat would rise significantly confirming the quality of the ledgers has not deteriorated."

You can't do more than that.

I am not exactly thrilled with CCP at the moment but I don't feel like anyone has lied to me . (eg: Centro and their debt)




AL


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## ROE (11 February 2008)

annalivia said:


> In defence of Stockval I have used it to great advantage over the last few years. I do not have the time or skill to put an intrinsic value on most stocks so it helps enormously with this.
> 
> In defence of Roger Montgomery I have always found him to be honest and forthright in his assessments of companies. Once again I cannot get out and talk to Management like he can so I rely on him doing this.
> 
> ...




Dont worry mate, you made a dud every now and then for what it is worth.
If it trade like the price it close today I will buy another 10,000 shares come opening tomorrow.... I have my reasons and conviction,  no one can tell me otherwise.

My sell order for other stocks just got executed before the close when the stock rally to the price I want, so I'm all cashed up.


----------



## annalivia (11 February 2008)

ROE said:


> Dont worry mate, you made a dud every now and then for what it is worth.
> If it trade like the price it close today I will buy another 10,000 shares come opening tomorrow.... I have my reasons and conviction, no one can tell me otherwise.
> 
> My sell order for other stocks just got executed before the close when the stock rally to the price I want, so I'm all cashed up.




Thanks. 
I will probably buy more tommorrow also. Just sold off some LHG and OSH a few weeks back so I have a some spare pennies.
BTW. If you can shed some light on your investment strategy I would be interested.  
"I have my reasons and conviction  no one can tell me otherwise." .....sounds interesting. 

AL


----------



## chilliaa (11 February 2008)

From my limited understanding of this company, a big issue is the high internal leverage means that the company may have to offload large chuncks of ledger investments at below purchase price.  Other issues apart from resignation of CEO (who was the CFO at the time of purchasing over valued ledger investments) is high turnover of staff with 65% of the collection team being employed for less than a year.

Just because something is 'cheaper' does not mean it is value.  At least as far as this company is concerned.


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## reece55 (11 February 2008)

GOSAFAS said:


> Can anyone confirm or deny a rumour that the same crew that shorted Allco are shorting CCP big time?




Guys
According to my latest short list data, CCP isn't even a valid shortable stock... therefore, any hedge fund foul play would be off the cards. Plus, it's relatively illiquid (except for today), I just don't think they would bother. I think todays capitulation is just about the fact that if you have 2 profit downgrades in 4 months in a bear market, you have to expect to be hammered. 

Blaze, I personally would be focusing on cash flow as opposed to EPS growth with a firm like this - you can fudge the book values of their debt using mark to mark valuations, but the cash flow would be a giveaway. I haven't done the numbers myself, but the chart tells the story.... Plus, as chill states, it's the realisable value of their debt book that is an issue. Remember that these guys were aggressive in acquiring impaired loan books - do you think the value of these books has increased or decrease in the last 6 months.. what about the books prospects for the future...... I'm not saying that I think that you need to sell the stock further, but these are the questions on the markets mind. 

My condolences to all who were hit by this one today, it's never nice to wake up to such a huge capitulation. 

Cheers


----------



## adobee (11 February 2008)

Damn this has been pumped last price 91c.
That is 77% wiped off the share price..?? Am I looking at the right company still??

Are people expecting this company to fold or looking at this as a potential turn around point??


----------



## blaze87 (11 February 2008)

reece55 said:


> Guys
> According to my latest short list data, CCP isn't even a valid shortable stock... therefore, any hedge fund foul play would be off the cards. Plus, it's relatively illiquid (except for today), I just don't think they would bother. I think todays capitulation is just about the fact that if you have 2 profit downgrades in 4 months in a bear market, you have to expect to be hammered.
> 
> Blaze, I personally would be focusing on cash flow as opposed to EPS growth with a firm like this - you can fudge the book values of their debt using mark to mark valuations, but the cash flow would be a giveaway. I haven't done the numbers myself, but the chart tells the story.... Plus, as chill states, it's the realisable value of their debt book that is an issue. Remember that these guys were aggressive in acquiring impaired loan books - do you think the value of these books has increased or decrease in the last 6 months.. what about the books prospects for the future...... I'm not saying that I think that you need to sell the stock further, but these are the questions on the markets mind.
> ...




yeah i personally think that cash flow would be a much more reliable way of valuations, however i doubt any reliable cash figure could be come up with with these new downgrade. so that's why in such cases, if i haf to guess a price, i would apply a bigger than usual margin of safety


----------



## Snakey (11 February 2008)

This stock is trading like the company is about to fold up...but I think their far from it
They have had a profit downgrade and staff issues.
My trading program says the company (at 91 cents) have a market cap of 39 million but they have asset backing of $1.42 per share.
From what I can read from reports they still have more than 100 million in assets and still turning over a profit (a very small one)..so from this I have come to the conclusion that they are over sold by panic sellers.....watching now for bounce


----------



## dhukka (11 February 2008)

ROE said:


> What is the stockval thing? some program tell you when you buy and sell stocks ? .... and why do you use it? if that is the case




ROE,

Stockval is a valuation tool used by Clime and is available to investors by subscription. It is basically a database of more than 300 ASX listed stocks (and a few US and other foreign stocks). For each stock they include the relevant financials plus a valuation. 

Although I haven't purchased any stocks that this program recommends is undervalued I get a lot of benefit out of it because a lot of the grunt work in crunching the numbers is done for you. You can also play around with the numbers if you do not agree with Climes. For example you can change parameters such as profit forecasts, and discount rates to come up with your own valuation.


----------



## annalivia (11 February 2008)

"It is not a company's earnings that are important , but the amount of invested capital requires to produce them."

Forget about the current share price.
Take a step back in time and focus on the financial year beginning in July 1 2003, when CCP's share price was 0.89c. The business began the year with $10.3m in opening shareholder’s equity . Over the following year, the employment of that capital generated $3.3m in after tax profits with $0.7m being paid to shareholder’s in fully franked dividends . This equated to a return on equity of 38.8% .
Since 2003, shareholders equity has grown from $10.3m to $42.6m through the retention of profits and new ordinary share capital - an increase of around 313%. 
After Tax Profits have grown from $3.3m to a forecast of $10 - $12 million(probably minus another $5 mil) in 2007.

So the question is would you like to own a business(or part thereof) who's equity has increased from $10.3m to $42.6m and will be having a profit of $5 -$7 mill this year.

Of course you would.
And how much would you be willing to pay?

Now that is the $64 million dollar question.



AL

"You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right."


----------



## dhukka (11 February 2008)

TheRage said:


> The ASX announcement is somewhat ambiguous. I re-read it again and it could be taken either to come from NPAT or from EBITDA. Obviously if the restructuring cost came from EBITDA it would be much more favourable than NPAT.  Blaze your numbers are not far wrong if they cost comes straight out of NPAT and if you assumed a margin of safety as you said of 50%. I would imagine though that for this to happen that the real restructuring cost would need to be farily significant.
> 
> My take on what they mean is that the 5 million would be applied as a expense to EBITDA in the following financial period so based on the assumption that 2008-2009 will be the same EBITDA then 80 million will in fact be 75 million and if we work on a factor of NPAT to EBITDA of 12.5% (80million/ 10million) then Net profit for the next financial year, assuming all things equal would be 12.5% of 75million = 9.375 million.




The way I read it, the restructuring charge is before tax. I would simply apply the marginal tax rate to the number to come up with a figure of $3.5m after tax. Deduct that from the *$10 - $12m* range and you get a range of *$6.5 -$8.5m* NPAT for FY08. 

What a spectacular fall from grace. This stock hit a 52 week high of *$12.99* not too long ago and after today has lost *93%* of its market value.


----------



## Buffettology (11 February 2008)

dhukka said:


> What a spectacular fall from grace. This stock hit a 52 week high of *$12.99* not too long ago and after today has lost *93%* of its market value.




Yeh, really makes you realise just HOW QUICKLY a stock price can turn around!  Not only that, but its not even as if bankrupcy is on the cards.  

Why cant this stock in a couple years, go to the way it was a year ago?  Once it gets back to the core of what its good at?


----------



## ROE (11 February 2008)

dhukka said:


> ROE,
> 
> Stockval is a valuation tool used by Clime and is available to investors by subscription. It is basically a database of more than 300 ASX listed stocks (and a few US and other foreign stocks). For each stock they include the relevant financials plus a valuation.
> 
> Although I haven't purchased any stocks that this program recommends is undervalued I get a lot of benefit out of it because a lot of the grunt work in crunching the numbers is done for you. You can also play around with the numbers if you do not agree with Climes. For example you can change parameters such as profit forecasts, and discount rates to come up with your own valuation.




Sound good, how much do you pay for such a service?
If it cost you 1K a year, wouldn't you be better off doing it yourself?
You know you can do similar calculation with excel or a simple calculators 

I pick up CCP  about 15 months ago when I run through my own scan, just something I come up with  and keep it for myself. and I thought nice but too damn expensive and they price everything to perfection so I wait ... 
then it go to $12-$13 I said nice but still expensive am I missing out?

Then the 1/2 price drop a few months ago..I said nice but bad news comes in three so I wait and look at the chart and momentum every so often....

Then comes the crash in Jan and things comes and go and stock still trending down ... thinking to myself I would come in at $3 bucks regardless of the trend so I wait.

This morning trades at $1.05..quick read of the announcement, do some a quick calculation in the head...damn look ok, so no longer wait and comes in  and ask questions later.

Now close at 91 cents....still want to come in again tomorrow 

And if it doesn't pay off, this will be my ****test stock ever and I may have made a precise  wrong calculation on this guy rather than vaguely right but I'm hoping for vaguely right


----------



## annalivia (11 February 2008)

I'm with you ROE.
Much below a dollar and I will be buying heaps more.

"The critical investment factor is determining the intrinsic value of a business and paying a fair or bargain price" (WB)

If this isn't a bargain price then I've never seen one.

Worst case scenario........this business goes to the wall.
Best case scenario...........goes back to 10 bucks in a couple of years.

Sounds like a good bet to me.


----------



## Buffettology (11 February 2008)

annalivia said:


> I'm with you ROE.
> 
> 
> "The critical investment factor is determining the intrinsic value of a business and paying a fair or bargain price" (WB)




Its hard to determine long-term earnings now, and hence long-term growth potential (which is a lot of what was driving up the price).  Not to mention, the public loved this stock and we were in a bull market, so the stock traded well above what its "fair value" was.

Will be interesting to see it get back to its core revenue raising and sort out a few things over the year or so and see what this stock can do in its 2009 results and what its ROE can get back too.  Not to mention, this will probably change up the balance sheet quiet a bit, so interesting to see what book value is as at 2008 end of financial year.

Book value, future growth, risk and ROE are really the CRITICAL factors in determining "intrinsic value" as far as I am concerned.  Low debt (at least relative to NPAT, not this debt/equity rubbish), cash flow, management are then the next big factors.  

Thats just my valuation method, which pretty much means I cannot get an accurate gauge on this one until it settles down, hence why I only bought a small parcel.

Cheers


----------



## 3MT (11 February 2008)

annalivia said:


> I'm with you ROE.
> Much below a dollar and I will be buying heaps more.
> 
> "The critical investment factor is determining the intrinsic value of a business and paying a fair or bargain price" (WB)
> ...




isn't that the worst and best case scenario of most stocks 

i took a little punt late today too. my hunch is the fundies are fighting to lower there exposure in a sellers market (few stocks were spared today) with the added demands of margin calls (you can borrow on 70% of this stock with most margin brokers) weighing this thing down at the close. 

I'm not as confident as some and calling this a long term bet just yet (haven't done the full fundamentals on this one), despite it being a viable and historically provened business (there's the credibility factor). But I do smell panic/frustration and forced margin calls creating a buying opportunity here.


----------



## dhukka (11 February 2008)

ROE said:


> Sound good, how much do you pay for such a service?
> If it cost you 1K a year, wouldn't you be better off doing it yourself?
> You know you can do similar calculation with excel or a simple calculators
> 
> ...




ROE,

The original subscription price is a little over 1k and then *$750* per year thereafter. 

I have replicated the Stockval method in excel. Anyone can do it if they get their hands on Brian McNiven's book 'Marketwise.' I often model companies that the Stockval database doesn't have. 

Stockval comes in handy because somebody else updates all the numbers for all the companies. I don't have time and quite frankly couldn't be bothered to do that for 300+ companies. I know you can download financials from Comsec, however they often don't adjust figures for small things such as capitalised costs etc. That said, I often do my own screens from Comsec to spot companies with high ROE's that aren't in Stockval.  

Again if I am interested in a stock that I saw in stockval, I'll replicate it in excel and run my own numbers, usually I'll come up with a variety of scenarios and valuations rather than just one number to hang my hat on. If I didn't have a day job I might do away with stockval, but for now it is worth forking out for.


----------



## ROE (11 February 2008)

dhukka said:


> ROE,
> 
> The original subscription price is a little over 1k and then *$750* per year thereafter.
> 
> ...




You know you dont need deadly accurate number 
it just a number to give you an idea.... I do rough calculation only and I dont even go any where near details as many brokers...I could to some extend and  I know I'm not a finance expert so I cant come up with those pretty details number any way  but why waste time on something I don't think bear much differences whether you have an accurate number or some where in the ball park...

Hell I reckon most people read those reports and dont understand what the those number really mean...Brokers do it just to justified their fee and it look pretty  

I doubt anyone on this planet can put a price tag on a stock. Stock price is not always about the number....it has lot of human emotion in it and who is selling and buying at the time...

that my 2 cents.. someone with financial degree shut me up


----------



## Buffettology (11 February 2008)

ROE said:


> I doubt anyone on this planet can put a price tag on a stock. Stock price is not always about the number....it has lot of human emotion in it and who is selling and buying at the time...
> 
> that my 2 cents.. someone with financial degree shut me up




ha ha, that human emotion is called technical analysis!  However, in the long-run I beleive firms always move back to "around" their intrinsic value.  

However, I do agree, it is hard to precisely value a stock and hence I only do a ballpark estimate also, but like Dhukka, do a few calculations lowering the ROE if neccessary.  I mean, some of these companies with a high ROE, keeping that as an average over several years, an intrinsic value calculation, will give you a highly unrealistic overvaluation.

Also, I find most of these broker price targets and valuations are WAY over their realistic value according to my own calculations.

Have to say, I took my valuation method exactly from Buffett, adapted it slightly as we do not have as long historical data and I also add in expected future growth to try and estimate an average ROE and discount more according to the risk factor.  I then convert back to a present value with a 15% required rate of return.

Hope that makes sense, just my opinion.


----------



## kloid (11 February 2008)

Buffettology said:


> ...
> Have to say, I took my valuation method exactly from Buffett, adapted it slightly as we do not have as long historical data and I also add in expected future growth to try and estimate an average ROE and discount more according to the risk factor.  I then convert back to a present value with a 15% required rate of return.
> 
> Hope that makes sense, just my opinion.




Hi mate - can I ask what number you came up with when doing this?  I did a similar calculation earlier today at work - I assumed that 2008 profit would be $6.5m ($10m per guidance less $3.5m for the after tax cost of restructure) giving an EPS of 15cps and that 2009 profit would be $10m (EPS of 23cps).  

I then applied an (admitedly arbitrary) growth rate of 10% between 2010 and 2014 and then a growth rate of 5% into perpetuity.  Assuming a 50% dividend payout ratio and a discount rate of 15% I came up with $1.50 as a valuation.  Being a tad more generous with the growth rate pushed it towards $2.

Doing this makes me realise how much guesswork is involved in all of this and why the experts hardly ever predict a share price with any accuracy.  That said, I am going to buy a (very) small parcel tomorrow just for the hell of it!


I'd be interested to hear more about what you came up with.

Cheers
Kloid


----------



## dhukka (11 February 2008)

ROE said:


> You know you dont need deadly accurate number
> it just a number to give you an idea.... I do rough calculation only and I dont even go any where near details as many brokers...I could to some extend and  I know I'm not a finance expert so I cant come up with those pretty details number any way  but why waste time on something I don't think bear much differences whether you have an accurate number or some where in the ball park...
> 
> Hell I reckon most people read those reports and don't understand what the those number really mean...Brokers do it just to justified their fee and it look pretty
> ...




I don't disagree with your view ROE. However sometimes I think those small adjustments turn out to not be that small, they can have significant effects on ROE and therefore valuation. I'm not after a precise number. As I said I run different scenarios to give myself a range of values. 

I don't think most broking analysts understand their own numbers, particularly with respect to valuation if done using DCF's.


----------



## dhukka (11 February 2008)

Buffettology said:


> Also, I find most of these broker price targets and valuations are WAY over their realistic value according to my own calculations.
> 
> Have to say, I took my valuation method exactly from Buffett, adapted it slightly as we do not have as long historical data and I also add in expected future growth to try and estimate an average ROE and discount more according to the risk factor.  I then convert back to a present value with a 15% required rate of return.
> 
> Hope that makes sense, just my opinion.




As an ex-broking analysts I can tell you that price targets are a joke, Analysts are required to give them but they hate doing it because they know how arbitrary they are. 

Also the industry standard for valuations are DCF's which are fundamentally flawed and notoriously unreliable. Estimating cashflows out 5 - 10 years is just nonsense. It's hard enough to forecast just one year out. 

Interested to know how you copied Buffet's methodology exactly since it has  never been published.


----------



## Buffettology (12 February 2008)

kloid said:


> Hi mate - can I ask what number you came up with when doing this?  I did a similar calculation earlier today at work - I assumed that 2008 profit would be $6.5m ($10m per guidance less $3.5m for the after tax cost of restructure) giving an EPS of 15cps and that 2009 profit would be $10m (EPS of 23cps).
> 
> I then applied an (admitedly arbitrary) growth rate of 10% between 2010 and 2014 and then a growth rate of 5% into perpetuity.  Assuming a 50% dividend payout ratio and a discount rate of 15% I came up with $1.50 as a valuation.  Being a tad more generous with the growth rate pushed it towards $2.
> 
> ...




Absolutely, I agree 100%.  I actually came up with the same figure (the $1.50), but beleive it will sit lower due to fear and risk.  Long-term, it should climb up and the history of the company shows it can be profitable.  So like you, I bought a small parcel, but definately not dumping a lot into this one for now.  I think I need to wait a year or two to see how it pulls itself together.  So hard to value it since its now just thrown everything out!  Complete guesswork!


----------



## Buffettology (12 February 2008)

dhukka said:


> As an ex-broking analysts I can tell you that price targets are a joke, Analysts are required to give them but they hate doing it because they know how arbitrary they are.
> 
> Also the industry standard for valuations are DCF's which are fundamentally flawed and notoriously unreliable. Estimating cashflows out 5 - 10 years is just nonsense. It's hard enough to forecast just one year out.
> 
> Interested to know how you copied Buffet's methodology exactly since it has  never been published.




Yeh, no wonder!

As for Buffett, ha ha, well not HIS exact methodology, sorry, wrong words to use.  I took my calculations from Buffettology the workbook and adjusted them.  Not sure if that has any relevance, but either way, has worked for me.  Obviously, not nearly as solid as it works for the man himself!


----------



## bigdog (12 February 2008)

http://www.news.com.au/heraldsun/story/0,21985,23196423-664,00.html

*Debt specialists can't turn a dollar*
Article from: Herald Sun
Nick Lenaghan

February 12, 2008 12:00am

CREDIT Corp chairman Christopher Deane resigned yesterday as the debt specialist slashed its full-year profit forecast in half and its shares fell 77 per cent.

The profit downgrade, the second in three months, comes as Credit Corp struggles to lift productivity after a hiring spree.

As well, the debt management firm blamed the downgrade on flagging short-term revenues following a reduction in its new debt purchases.

Those issues will be scrutinised in a strategic review also announced by the company yesterday.

Credit Corp downgraded its full-year net profit forecast to a range of $10 million to $12 million.

Last August, the company delivered a net annual profit for 2007 of $19.63 million and forecast a 2008 profit of $24 million.

Its earnings before interest, tax, depreciation and amortisation forecast has been pulled back to a range of $83 million and $87 million. Its fiscal 2007 EBITDA was $89.51 million.

Investors punished the company yesterday, pushing its stock down more than 77 per cent, or $3.08, to 91.

Its share price has slumped more than 90 per cent since a high in July last year of $12.55.

The latest downgrade comes just three days before Credit Corp's board will face shareholders at its first-half results presentation.

The board's own effectiveness will be one of the areas examined in the review. Mr Deane, who has been the company's chairman since it listed in 2000, will remain a non-executive director.

Another director, Richard Thomas, took over as acting chairman yesterday.

Credit Corp attributed the latest profit revision to lower productivity after large scale recruitment and underperformance of recent debt purchases.


----------



## ROE (12 February 2008)

All quiet on the western front  I done with my CCP purchase time to go walk about for three years in Amazon jungle .. I see you guys in three years time
Adio


----------



## Buffettology (12 February 2008)

ha ha, or maybe not a 3 year treck to the wilderness ROE!

You could sell right now and make a HANDY profit if you wanted some short-term cash!

Anyone who bought at close yesterday would be laughing all the way to the bank!  Unfortunately, I only got this one around lunch, when it was still not nearly finished with its sell-off!


----------



## prawn_86 (12 February 2008)

Hmm...

But is it just a dead cat bounce?

As i have said before, im wary of these situations. But mainly because i dont have experience in them...


----------



## Buffettology (12 February 2008)

Yeh, I dont think you can tell whatsoever at the moment, its all happened in such a short timeframe.  

Im just really looking for the market to move upwards at least in the short-term, now that the US seems to have got a grip on itself at least for the time being.


----------



## ROE (12 February 2008)

Buffettology said:


> ha ha, or maybe not a 3 year treck to the wilderness ROE!
> 
> You could sell right now and make a HANDY profit if you wanted some short-term cash!
> 
> Anyone who bought at close yesterday would be laughing all the way to the bank!  Unfortunately, I only got this one around lunch, when it was still not nearly finished with its sell-off!




I can but I'm not  ... time like these the market suddenly give away money.
let put all the who ha and number aside. Look at what CCP actually is and that why I buy... not only the number is extremely good but the business as well.

The statement:
I called CCP a toll bridge business.. Banks..Government and Financial institution need CCP.

The Question:
Why?

The Answer:
1. Most of these institutions don't have a debt collection department, and if they do they not very effective or efficient.

2. These agencies dont want to have a bad image by chasing their customers for bad debt and get into a public PR nightmare.

3. Give banks and other institution a way to write off their debt and sell it for what ever it is and get it off their book.

4. Give banks a fall back weapons to take on higher risk lending and if it all fall to pieces they got people like CCP to come and chase their debt for a commission or sell it.

Now the question is how much do I want to pay for CCP ... for yesterday price I'm gladly paid for it without questions ask.


----------



## Snakey (12 February 2008)

yes nice day for holders today (1st one in about six months i think) out at close myself
tomorrow will be interesting leading up to reports on thursday ...more scared people tomorrow i think. will look for another entry in the next few days
happy with profits so far....look forward to more in the future
sorry to all those who have lost money on this one..Just remember its not a loss until you lock it in eddie..


----------



## Buffettology (12 February 2008)

ROE said:


> Look at what CCP actually is and that why I buy... not only the number is extremely good but the business as well.




I agree with all you said in the post, but especially the above part.  This is exactly the reason I bought also.  As why I said wait for it to get back to its "core business".  It realised its mistakes and it has shown what it can do when it concentrates on that, not trying to grow too quick.  

Still plenty of $$ to be produced by CCP, but the fact that I could not value it, made me a bit cautious.  

Still a long way to go yet, but if you are right ROE, you could make some SERIOUS returns on this one!  

I like the toll bridge metaphor, in very true Buffett style!


----------



## dhukka (12 February 2008)

Assumptions are being made that this is still a very good business, however I think just about every underlying assumption about this business needs to be questioned. Clime (CAM) sent an email to all Stockval subscribers today. Below is an excerpt of the relevant points which may cause some to question how good a business model CCP really has. Then again, these guys have been wrong to date, so no reason to think they are right now.



> Issues brought to light are as follows: 1) newly purchased debt ledgers have not performed as expected - this is contrary to management’s previous responses to our questions.  2) staff productivity remains a problem, due to rapid headcount expansion and; 3) costs in the business associated with staffing, management and infrastructure have increased dramatically.
> 
> We now believe there are either few or no economies of scale in this type of business or that present management are not capable of delivering those economies.
> 
> ...


----------



## ROE (12 February 2008)

dhukka said:


> Assumptions are being made that this is still a very good business, however I think just about every underlying assumption about this business needs to be questioned. Clime (CAM) sent an email to all Stockval subscribers today. Below is an excerpt of the relevant points which may cause some to question how good a business model CCP really has. Then again, these guys have been wrong to date, so no reason to think they are right now.




Why didn't they question this on the first profit downgrade and apply Uncle Benjamin Graham margin of safety?

If I was them I just take it in a chin and said we stuffed up, we sorry we lost your money....

I think fear start to take shape when you see your holding of $12 plummet to $1 and wiped out all gain as well a major capital loss.

Uncle Warren wont be proud  Seeing people break his number #1 rule not to lose capital.


----------



## dhukka (12 February 2008)

ROE said:


> Why didn't they question this on the first profit downgrade and apply Uncle Benjamin Graham margin of safety?
> 
> If I was them I just take it in a chin and said we stuffed up, we sorry we lost your money....
> 
> ...




ROE,

To Clime's credit they did ask those questions - several times as it turns out. Management assured them that everything was OK. Here is the first part of the email clime sent today.



> We are deeply disappointed with CCP management announcing a second profit downgrade literally weeks after we had spoken to them in depth about the business and received assurances that all was on track with their previous announcement.
> 
> NPAT guidance for 2008 is now $10-12m (before circa $5m in restructuring costs); previous guidance was for NPAT of $17-19m without any restructuring costs.
> 
> ...




Don't think I'm defending CAM here. I think they stuffed up, more specifically in the paragraph I posted before this post they said;



> Management have always been protective of collection rates and prices paid for ledgers, consistently stating that those figures were commercially sensitive. *It now appears such excuses helped management avoid revealing that the dramatic revenue growth being reported was being fuelled by constantly larger ledger purchases and focusing staff efforts on maximising the yield on fresh ledger purchases*.




To me this means CAM did not really understand CCP's business. If CCP was not forthcoming with such information then that should sound alarm bells right there. I believe in the old adage; _"never invest in anything you don't understand"_ Maybe Clime thought they understood CCP but I don't they fully appreciated the risks. 

This may all be easy to say with the benefit of hindsight however, note that  Clime mentioned what I posted in January last year on this thread about CCP possibly overpaying for ledgers. This was an obvious and very real risk, one I'm sure CAM was aware of but didn't go far enough in investigating.


----------



## Snakey (13 February 2008)

Well...entered this one again on my new buy fear, bear market stratergy
I think that people think... oh its going down tomorrow so i'll sell today..Go sheep!.. you help pay my bills
Anyway now im one of the nervios holders....I get thats what I get paid for ..being nervous
Good luck holders and when the uncertanty has been removed tomorrow im sure this thing will recover....because if it goes down the toilet im going to have to go back to work


----------



## annalivia (13 February 2008)

Also from Clime today....

"After our meeting with management, we have no confidence in their full year guidance. As such, we are not able to asses the intrinsic value of Credit Corps shares. The companys valuation has dropped significantly over the past three months from around $10.00 in October. Wether or not this business is investment grade will be considered post the half year result release on Thursday."

See what happens tommorrow.
I wiil wait for Clime to make a call and bail out if they bail out.

AL


----------



## TheRage (13 February 2008)

annalivia said:


> Also from Clime today....
> 
> "After our meeting with management, we have no confidence in their full year guidance. As such, we are not able to asses the intrinsic value of Credit Corps shares. The companys valuation has dropped significantly over the past three months from around $10.00 in October. Wether or not this business is investment grade will be considered post the half year result release on Thursday."
> 
> ...




Let's hope they don't bail out as this would be an awful large amount of shares being offered to the market if they do. Sp would fall throught the floor.


----------



## dhukka (13 February 2008)

annalivia said:


> Also from Clime today....
> 
> "After our meeting with management, we have no confidence in their full year guidance. As such, we are not able to asses the intrinsic value of Credit Corps shares. The companys valuation has dropped significantly over the past three months from around $10.00 in October. Wether or not this business is investment grade will be considered post the half year result release on Thursday."




Ouch, 

Pretty harsh words from Clime, a good contrary indicator perhaps? Snakey I think you have balls as big as church bells to be going in a day before the half year report comes out. Could be a great move though, best of luck.


----------



## Snakey (13 February 2008)

annalivia said:


> Also from Clime today....
> 
> "After our meeting with management, we have no confidence in their full year guidance. As such, we are not able to asses the intrinsic value of Credit Corps shares. The companys valuation has dropped significantly over the past three months from around $10.00 in October. Wether or not this business is investment grade will be considered post the half year result release on Thursday."
> 
> ...




If they bail out then you will probaly recieve about 30 cents for your shares...as everyone else will bail out with them. I think in these situations its best to let things cool down before you make any decisions to liquidate. Give it a couple of weeks to sort itself out and for true value to show its face and then make a decision. I've been in a situation like this before(heavily invested in cazaly when it went from $2 to 45c over night it then bounced back to 80c within a week or two) and from experience its best not to panic. Im here now because I see value and scared and frustrated people who will make poor decisions under pressure. Remember and DONT FORGET, THIS COMPANY IS STILL MAKING A PROFIT!!!!


----------



## annalivia (13 February 2008)

Snakey said:


> DONT FORGET, THIS COMPANY IS STILL MAKING A PROFIT!!!!




On all available info they are still making a profit as we speak.

But I think you are right. I will wait a few weeks for things cool off.

I bought a very small amount at $6
A bit more at $4
And a whole lot more at $1
So I haven't lost the house yet.

AL

"Be greedy when others are fearful."


----------



## ROE (13 February 2008)

Fear start to take shape and they are not thinking clearly..
Let assume worse case scenario this stock go under
They own 2B ledger book ... surely they can sell them 5 cents in a dollar for those book ..some other debt collector will pay for it.

5% of 2B is bigger than the current market cap.

And with debt collection you don't always collect in 1 hit, you get people pay you $20 here, $50 bucks there on a fortnightly basis so money still trickle through.

Bring it on Fear I feed on them


----------



## GOSAFAS (13 February 2008)

Looks like this is another Centro waiting to happen. I don't know why I have a knack of getting involved with these rats and mice. Not sure what to do - I'm averaging $1.10 now. Do I sell and take a bit of pain or are we heading towards 30c?


----------



## Buffettology (13 February 2008)

Man, managements credibility is SHOT, but how can they get profit guidance THAT wrong only a few days before its announcement?  If they do, this stock deserves to be punished and management should never be employed again, in any capacity, except for maybe a Woolworthes shelf packer (not sure if they would use the right price tag though)!


----------



## Snakey (13 February 2008)

GOSAFAS said:


> Looks like this is another Centro waiting to happen. I don't know why I have a knack of getting involved with these rats and mice. Not sure what to do - I'm averaging $1.10 now. Do I sell and take a bit of pain or are we heading towards 30c?




Nice average... I see profit for you.. but your going to have to earn it with stress. Best turn off the computer and turn it back on on friday Go to the beach and watch the waves come in. Locking in losses today would be suicide IMO (see my above post)


----------



## Snakey (13 February 2008)

Buffettology said:


> Man, managements credibility is SHOT, but how can they get profit guidance THAT wrong only a few days before its announcement?  If they do, this stock deserves to be punished and management should never be employed again, in any capacity, except for maybe a Woolworthes shelf packer (not sure if they would use the right price tag though)!




The company predicts 6mil to 6.2mil ..only 3 or 4 days before the reports out..HOW MUCH ERROR CAN THERE BE?????mr buffet? 
P.S Thanks for the down ramp (you may now enter)


----------



## blaze87 (13 February 2008)

Snakey said:


> The company predicts 6mil to 6.2mil ..only 3 or 4 days before the reports out..HOW MUCH ERROR CAN THERE BE?????mr buffet?
> P.S Thanks for the down ramp (you may now enter)




everyone has their own investment stra....
most people would want clarify and credibility in the shares they own
personally to me, ccp might look value, but the word "cigar end" comes into mind


----------



## ROE (13 February 2008)

Bring it on, shot it down to 30 cents .. I buy 10% stake and buy myself a seat on the board then I turn it around 

I'm getting some more now ... bring on FEAR


----------



## Pager (13 February 2008)

annalivia said:


> Also from Clime today....
> 
> "After our meeting with management, we have no confidence in their full year guidance. As such, we are not able to asses the intrinsic value of Credit Corps shares. The company's valuation has dropped significantly over the past three months from around $10.00 in October. Whether or not this business is investment grade will be considered post the half year result release on Thursday."
> 
> ...





Not too long ago when CCP fell to about $5, clime had how many meetings with this company ???????????????, you would have thought they would have been going through everything with a fine tooth comb ??????, but they came out and said they were happy to hold, had confidence in the management of the company etc etc..........................

Now clime come out with the above statement, hardly inspires confidence to invest in clime does it, to put it bluntly they are saying we know fu#k all 

I bought 1000  CCP at 99 cents so its a small punt they can turn things around, will give them plenty of time but its always going to be a punt.

As for Clime, after this i wouldn't touch them with a barge pole, if they bailed and said we got it wrong when CCP fell to $5 then fair enough, every fund gets it wrong at times.


----------



## ROE (13 February 2008)

Clime is not even a majority share holder what are you worry about.
They just some small fund thinking they can match Buffett Style return
CCP has dealt credibility blow to them and their own business maybe shaking as well as CCP.


----------



## Snakey (13 February 2008)

Pager said:


> Not too long ago when CCP fell to about $5, clime had how many meetings with this company ???????????????, you would have thought they would have been going through everything with a fine tooth comb ??????, but they came out and said they were happy to hold, had confidence in the management of the company etc etc..........................
> 
> Now clime come out with the above statement, hardly inspires confidence to invest in clime does it, to put it bluntly they are saying we know fu#k all
> 
> ...



agree with you 
for me the market cap is currently less than half my discounted value of the share IMO hence i got mt last fill at 83.5 and thats me done..pockets are empty. will wait to see what happens tomorrow good luck holders and punters
and may the rediculusly high percentages be in your favour tomorrow


----------



## ROE (13 February 2008)

I'm out of cash and CCP is my biggest purchase ever.

This will make me or break me that how confident I am....  

It wont bankrupt me it just take away all my profit


----------



## TheRage (13 February 2008)

I have finally jumped in at 0.88. I guess tommorrow will tell. Let's hope management come out and tell the truth and start to fix this sinking boat.


----------



## annalivia (13 February 2008)

OK.
I blame all you people here but I have bought some more.
If I am wrong I think I might have to become a chartist.

Interesting day tommorrow.


----------



## AKE (13 February 2008)

I See Geoff Lucus of CCP has disposed of 235000 FPO CCP on the 11/2/08 because of a margin lending arrangement! CCP has been a costly exercise, lets hope I learn from the experience.


----------



## blinkau (13 February 2008)

I remember going to the ASX Investor Hour when Roger presented in Brisbane was either 06 or 07 can't remember. He was a good presenter and spoke a fair bit about CCP how he purchased a large parcel around $4 only to watch the price fall back, then he went on to show us the rest of the chart as it topped $10 and wait for all the shocked looks from the audience. My impression was he seemed to think of Clime as the next Berkshire Hathaway. Just a bit of history there! 

Either way he put on a good presentation and I am sure he has made a mistake as we all have when investing in shares. I think they may re-think diversification now it would have certainly lessened the blow.

I was keen on entering at $4 after watching it after the speech the last year or so however recall reading a post in the CCP thread bad news comes in threes so I held off oh plus I was more interested in losing money on CTX! 

It will be interesting to see where this ends up thinking of putting an order in around $0.50 to see if it gets filled. I read a research report the day after the news came out which signaled a possibility of another downgrade but that would seem unlikely so close to reporting?


----------



## dhukka (13 February 2008)

Pager said:


> Not too long ago when CCP fell to about $5, clime had how many meetings with this company ???????????????, you would have thought they would have been going through everything with a fine tooth comb ??????, but they came out and said they were happy to hold, had confidence in the management of the company etc etc..........................
> 
> Now clime come out with the above statement, hardly inspires confidence to invest in clime does it, to put it bluntly they are saying we know fu#k all
> 
> ...




I agree with most of this. In their emails Clime seems to me, to be passing the buck a little, claiming that management led them up the garden path and therefore it isn't their (Clime's) fault. Clime needs to take more responsibility for their actions. As stated earlier I believe they didn't fully understand this business and I think a lot of people will have rightfully lost faith in them. 

That said, I still believe in Climes investment and valuation approach. I think the flaw was not in the approach but the application of the approach. They simply didn't really understand the business they were investing in.


----------



## 3MT (13 February 2008)

Is anyone here seriously picking up CCP for the long term?

If management have lost navigation of its business numbers/processes within  (2 quick downgrades) and are not too open about % margins, then would you have confidence investing in the company long term? Perhaps if new blood and a proper strategic is done, but that will take time.

I can't help but think its good value ($12 to 88c) but I'm not basing this on solid fundamentals (are those NTA, Debt figures believable?), but on the theory that the market is irrationally gripped in fear at the moment.


----------



## annalivia (13 February 2008)

I will hand over to Mr Buffett............


"In fact, the true investor welcomes volatility.  Ben Graham explained why in Chapter 8 of The Intelligent Investor.  There he introduced "Mr. Market," an obliging fellow who shows up every day to either buy from you or sell to you, whichever you wish.  The more manic-depressive this chap is, the greater the opportunities available to the investor.  That's true because a wildly fluctuating market means that irrationally low prices will periodically be attached to solid businesses.  It is impossible to see how the availability of such prices can be thought of as increasing the hazards for an investor who is totally free to either ignore the market or exploit its folly." -1993 Shareholders Letter


Solid business? Probably not.
However IMHO "Mr Market" is in one of his depressive moods.


----------



## Pager (14 February 2008)

Profit after tax is down 33%, dividend of 2 cents FF, down but not out.

Be intersting to see what happens when it opens today, down from over $10 to 90 cents seems very harsh.

fingers crossed


----------



## Snakey (14 February 2008)

annalivia said:


> Also from Clime today....
> 
> "After our meeting with management, we have no confidence in their full year guidance. As such, we are not able to asses the intrinsic value of Credit Corps shares. The companys valuation has dropped significantly over the past three months from around $10.00 in October. Wether or not this business is investment grade will be considered post the half year result release on Thursday."
> 
> ...




morning all 
Its interesting that clime would say this about a share that they hold. I try to think why they would say that. few reasons come to mind- 
1. dirty from being so burnt(very unprofessional and was not thinking clearly at the time) 
2. downramping for further accumulation to buy themselves out of trouble
3. their honest opinion

Anyway... fasten your seat belts, keep your hands inside the cage at all times try not to scream to loud as this ride is about to begin


----------



## blaze87 (14 February 2008)

a quick question to those who studied accounting,
where would the restructing cost be in their annual report and under which heading? i thought it was supposed to be charged under a "one-off charge/writedown" but can't find it on their half-yr info..
thanks


----------



## dhukka (14 February 2008)

blaze87 said:


> a quick question to those who studied accounting,
> where would the restructing cost be in their annual report and under which heading? i thought it was supposed to be charged under a "one-off charge/writedown" but can't find it on their half-yr info..
> thanks




Blaze, 

You won't see the restructuring charge in the half year report. Those decisions were taken after the Dec 31st balance date. It should show up in the Full Year report.


----------



## Snakey (14 February 2008)

blaze87 said:


> a quick question to those who studied accounting,
> where would the restructing cost be in their annual report and under which heading? i thought it was supposed to be charged under a "one-off charge/writedown" but can't find it on their half-yr info..
> thanks




restucture is in the next half of the year not the previous
The reports appear to be as expected and i think that now we will see an overall recovery in the share price over the five days.


----------



## blaze87 (14 February 2008)

oh, ok thanks
so that means the company expects to earn another 4-6million for Npat for first half of 2008? in other words, most of the second half profits will be mostly consumed by the restructing cost of 3.5 million?


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## TheRage (14 February 2008)

At least NPAT for half year was above 6 million. If this fell since the disclosure it would have been good night nurse. Interim dividend of 2cents represents 15% payout ratio on earnings of 13cents. Wonder why they are retaining some much of earnings when in the past payout ratio has consistently been 50%.


----------



## ROE (14 February 2008)

Nice result I like it very much ....   I factor in some margin of safety say earning is 4.3 Mil for 08 ..that give it 10 EPS ..that bring it down to 2003 Earning

But the upside still there and if they do well they could exceed it


----------



## dhukka (14 February 2008)

blaze87 said:


> oh, ok thanks
> so that means the company expects to earn another 4-6million for Npat for first half of 2008?




First half 2008 is history, that is today's result. 



blaze87 said:


> in other words, most of the second half profits will be mostly consumed by the restructing cost of 3.5 million?



 Basically yes, the company released details of the restructure in their presentation:



> *Time Frame 30 -45 days
> 
> *Expected costs and/or charges
> – Premises (lease tail/make good) *$0.8m*
> ...




Tough to have faith in these projections given recent events. 

eps down *-32%* dps down *-81%* suggests to me they are conserving capital in case more cochroaches surface in their strategic review. 

This is not encouraging either;



> • Investment in larger corporate and administrative platform for forecast
> volume increases
> • Revenue is expected to increase in the second half of the 2008 financial
> year, however not at the rate of costs
> ...


----------



## TheRage (14 February 2008)

The segment information on page 10 says it all really. 8.5 million profit off of 72 million of ledgers equates to a 11.8% return dec 2007, where as in 2006this ratio is double at 21% return. It seems management were spot on but I suspect cost of employees hasn't had as much of an impact as the crappier ledger products that they have purchased.


----------



## ROE (14 February 2008)

TheRage said:


> The segment information on page 10 says it all really. 8.5 million profit off of 72 million of ledgers equates to a 11.8% return dec 2007, where as in 2006this ratio is double at 21% return. It seems management were spot on but I suspect cost of employees hasn't had as much of an impact as the crappier ledger products that they have purchased.




Well earning is the same but other figure is different because they are a bigger company now facing problems, so some of the $$ will be used to restructure, sack staff and various other activities.

I prefer a company to come out and said look we are having problems and we are addressing it and this is what it will cost..maybe even over estimate the cost and even going backward for a year or two ....I don't mind as long as they are making progress and get back to core business and start making more money in 2 years time.

You cant pick up wonderful company at cheap price period...it has to go through some sort of earning down grade or problems and as long as the management can get back on track then I'm all in.

But it's a risk so you have weight up and decide whether it's for you or not.


----------



## resourceboom (14 February 2008)

Hi ROE,
If you don't mind, could you say roughly how much %wise of your portfolio you have / plan to have in CCP.

I know the mods don't like these types of questions, as they will say it irrelevant and should not be discussed, but I think because you have already mentioned going "all in" it would be nice to clarify.

no dramas if you dont want to answer.


----------



## ROE (14 February 2008)

resourceboom said:


> Hi ROE,
> If you don't mind, could you say roughly how much %wise of your portfolio you have / plan to have in CCP.
> 
> I know the mods don't like these types of questions, as they will say it irrelevant and should not be discussed, but I think because you have already mentioned going "all in" it would be nice to clarify.
> ...




Rule 1: Only invest what you can afford to lose
Rule 2: Don't lose capital

Well I put all my profit for the year into this stock, that close 25K worth ..which is small but that all I can afford to lose with my rule #1.

So if things fall to pieces I don't lose capital but my profit.
All in doesn't mean 100% of my capital.


----------



## Buffettology (14 February 2008)

ROE said:


> ....I don't mind as long as they are making progress and get back to core business and start making more money in 2 years time.




This is the part that I think is very positive.  Management appears to be addressing both issues, on the revenue and the cost side.  

They appear to be addressing the problem and getting back to core operations should see a handy profit in a couple years.

Not to mention, in the short-term, this company is EXTREMELLY oversold.  Check out RSI, WELL BELOW 30.  MACD is not great, but this is a lagging indicator afterall and hopefully we see a bullish crossover in a few days.


----------



## chops_a_must (14 February 2008)

Buffettology said:


> This is the part that I think is very positive.  Management appears to be addressing both issues, on the revenue and the cost side.
> 
> They appear to be addressing the problem and getting back to core operations should see a handy profit in a couple years.
> 
> Not to mention, in the short-term, this company is EXTREMELLY oversold.  Check out RSI, WELL BELOW 30.  MACD is not great, but this is a lagging indicator afterall and hopefully we see a bullish crossover in a few days.




That's not very Buffetesque of you!   

You would expect at least some kind of technical bounce from here, after that exhaustion. You feel anyone wanting to get out, would mostly be out already. But, it is a most bizarre chart.

From a mug's standpoint it looks like the market is pricing some substantial degree of risk for complete company collapse. Can't see that happening though. Just glad I didn't buy in when I was thinking about them last year...


----------



## Buffettology (14 February 2008)

chops_a_must said:


> That's not very Buffetesque of you!
> 
> You would expect at least some kind of technical bounce from here, after that exhaustion. You feel anyone wanting to get out, would mostly be out already. But, it is a most bizarre chart.
> 
> From a mug's standpoint it looks like the market is pricing some substantial degree of risk for complete company collapse. Can't see that happening though. Just glad I didn't buy in when I was thinking about them last year...




he he, told you I keep repeating what I am starting to learn over and over and try and relate it to every post!  Only way to become competent at it whatsoever (either conciously or unconciously)!

But I agree on the exhaustion and that the market is pricing in a substantial degree of risk!  I would expect a bounce from here also, but we might get some resistance in that there are sure to be a LOT of profit takers out there as this one climbs up through that dollar mark.  

Definately a medium to long-termer I beleive.


----------



## Buffettology (14 February 2008)

Buffettology said:


> They appear to be addressing the problem and getting back to core operations should see a handy profit in a couple years.




Oh, and correct me if Im wrong, but though not exactly the same, isnt this a similar situation to what happened when Buffett bought into American Express?  

Took on some unprofitable extra activities and Buffett only bought in on the criteria that they get back to their core activities, of which ended up profitable.  Man, seems so long ago since I read that, not sure If I'm just talking jibberish!


----------



## annalivia (14 February 2008)

Buffettology said:


> Oh, and correct me if Im wrong, but though not exactly the same, isnt this a similar situation to what happened when Buffett bought into American Express?




I alluded to this back in post 45 of this thread.
I don't think things were so grim back then. However I am still a believer. ie: this is an outstanding company with some problems to fix and has the potential to recover big time.
I kept buying up on the way down with Uncle Warren in mind whispering to me... "Be greedy when others are fearful."
I think this will either be my best or my worst investment decision.


----------



## Buffettology (14 February 2008)

annalivia said:


> I alluded to this back in post 45 of this thread.
> I don't think things were so grim back then. However I am still a believer. ie: this is an outstanding company with some problems to fix and has the potential to recover big time.
> I kept buying up on the way down with Uncle Warren in mind whispering to me... "Be greedy when others are fearful."
> I think this will either be my best or my worst investment decision.




Yeh, sadly though, it will take a long time for you just to recover costs.

Also, you could not have known what was in store for this one.

However, remember Buffett bought into American Express AFTER all this information came out and once it was agreed they would clean up the unprofitable parts of the business.  I.e.  the time corresponds to this exact time with CCP (after their release yesterday).  So far better to buy in NOW as far as that information is concerned, as opposed to buying in over the last few months/years.  But you could not have known.


----------



## ROE (14 February 2008)

Buffettology said:


> Oh, and correct me if Im wrong, but though not exactly the same, isnt this a similar situation to what happened when Buffett bought into American Express?
> 
> Took on some unprofitable extra activities and Buffett only bought in on the criteria that they get back to their core activities, of which ended up profitable.  Man, seems so long ago since I read that, not sure If I'm just talking jibberish!




No Buffett bought into AA because of the quality of the business... he Admitted that they made a plunder and cost them millions but that plunder can be fixed with better quality control and as he explain it it's a toll bridge business....
as long as people still using the credit, AA will make money every time you swipe that card, a little fee attached to it.

As long as there are credit cards and personal loan, there are going to be people in debt  and they need someone to recover it  sound too familiar here

The business he bough into where the want it change is the Insurance Business where they start going to far to fast and offer people from all walk of life car insurance. Where their core business before the collapse is only offered to prefer drivers cheap..someone who never has accident or little accident...much like what AAMI did that why I like Promina....target those and give them cheap insurance cos they dont make claim. 

Most people preach Graham and Buffett teaching but have no courage to act ...that is to buy when everyone else said jump ship and shout the house is falling down


----------



## Snakey (14 February 2008)

volumes for me have been low...the increase in debt on the report seems to be concerning investors....direction is unclear... hence i have exited this one.
good luck holders but i have moved my capital to a different bounce trade AED... more solid things happening there IMO


----------



## Buffettology (14 February 2008)

Thx ROE, I was confusing the two.  Either way, its the same scenario as the insurance business then!  

Could really be a big upturn in this one in a year or so (if managements strategic plan works, and I see no reason why not).  

Glad I bought in, I think its worth the risk and will be holding for the long-term. 

Cheers


----------



## annalivia (14 February 2008)

Can anyone explain the following?

From todays balance sheet and cash flow metrics the Interest Coverage (EBITDA/interest) for the 6 months ended Dec 07 is 7.9x

This seems OK to me.

However after recent developments has this changed and what is the Interest cover now?

and

Is it sufficient?


----------



## TheRage (14 February 2008)

annalivia said:


> Can anyone explain the following?
> 
> From todays balance sheet and cash flow metrics the Interest Coverage (EBITDA/interest) for the 6 months ended Dec 07 is 7.9x
> 
> ...




This is quite rough:
On 140 million debt at lets say 8% interest = 11.2 million. On forecast EBITDA of 83-87million = 83million/11.2 million = 7.4 times. 

Someone correct me if I am wrong but the restructuring costs will likely be amortised so will come out after EBITDA and then NPAT will be derived.


----------



## annalivia (14 February 2008)

TheRage said:


> This is quite rough:
> On 140 million debt at lets say 8% interest = 11.2 million. On forecast EBITDA of 83-87million = 83million/11.2 million = 7.4 times.
> 
> Someone correct me if I am wrong but the restructuring costs will likely be amortised so will come out after EBITDA and then NPAT will be derived.




Thanks TheRage.
So if this is approximately right am I correct in assuming that there is no immediate threat to ccp paying their current debt?

and the comment from Snakey.....
*"the increase in debt on the report seems to be concerning investors"* 
is fallacious.


----------



## Snakey (14 February 2008)

annalivia said:


> Thanks TheRage.
> So if this is approximately right am I correct in assuming that there is no immediate threat to ccp paying their current debt?
> 
> and the comment from Snakey.....
> ...




just one thing from the report concerned me was the closing net debt rose from 82 mil in dec 06 to 144 mil in dec 07 an increase of 75%
If I wound the company up tomorrow I would get 69 million... thats is only if the debt ledger are worth what they say there worth. 
At 1 dollar the company market cap is 44 million
At $1.56 the company's cap would 69 million
If debt were to increase another 25 percent in twelve months with restructure and continuing problems the company's closing book value would be all but $0.00 
I am working only of the ledger value ...any other value I have written off as error allowance.
Please feel free to pick apart my theory as this is what the forum is for


----------



## ROE (14 February 2008)

Snakey said:


> just one thing from the report concerned me was the closing net debt rose from 82 mil in dec 06 to 144 mil in dec 07 an increase of 75%
> If I wound the company up tomorrow I would get 69 million... thats is only if the debt ledger are worth what they say there worth.
> At 1 dollar the company market cap is 44 million
> At $1.56 the company's cap would 69 million
> ...




Net Tangible Asset usually include liability ie total asset - liability .... some called it book value some called it NTA


----------



## rub92me (15 February 2008)

In order to assess the viability of this debt collection business, I would need to see at least this additional information:
1) How old was the debt in the ledgers at time of purchase and what price did they pay for it. 
2) The age profile of the ledgers from purchase date; i.e. what percentage of the total book was bought 6 months ago, 12 months ago, 18 months ago, etc.
3) What is the yield curve relative to the age of the debt and ledgers (the older the debt, the harder it is to collect).
If they reduce purchase of new debt (which they seem to be planning), the yield curve of the portfolio will come down. Cost of debt financing is likely to go up in the short term.


----------



## ROE (15 February 2008)

rub92me said:


> In order to assess the viability of this debt collection business, I would need to see at least this additional information:
> 1) How old was the debt in the ledgers at time of purchase and what price did they pay for it.
> 2) The age profile of the ledgers from purchase date; i.e. what percentage of the total book was bought 6 months ago, 12 months ago, 18 months ago, etc.
> 3) What is the yield curve relative to the age of the debt and ledgers (the older the debt, the harder it is to collect).
> If they reduce purchase of new debt (which they seem to be planning), the yield curve of the portfolio will come down. Cost of debt financing is likely to go up in the short term.




Give credit corp investor relation a call 
I'm sure they will reveal all their secrets for you if you have a few million bucks to invest into the company  ... if you have a few thousands like the rest of us then public information is all you have access to so start digging and do your own research


----------



## Snakey (15 February 2008)

rub92me said:


> In order to assess the viability of this debt collection business, I would need to see at least this additional information:
> 1) How old was the debt in the ledgers at time of purchase and what price did they pay for it.
> 2) The age profile of the ledgers from purchase date; i.e. what percentage of the total book was bought 6 months ago, 12 months ago, 18 months ago, etc.
> 3) What is the yield curve relative to the age of the debt and ledgers (the older the debt, the harder it is to collect).
> If they reduce purchase of new debt (which they seem to be planning), the yield curve of the portfolio will come down. Cost of debt financing is likely to go up in the short term.



I dont think you need to see this as the debt ledgers have been written down for you. Further writing down of debt ledgers without newer purchases would have the same affect as increased debt. Though further increased income from the ledgers  and better company effiency could offset this affect on the NTA (closed book value)


----------



## Nathan_b (15 February 2008)

this looks like a day traders dream atm.

its got strong buy side vs sell side.

lets see how she runs today, nice to see $1+


----------



## Nathan_b (15 February 2008)

Looks like we will have a run before close, the rate its ticking over we should see 94.5 cent close today....


----------



## rub92me (15 February 2008)

Nathan_b said:


> this looks like a day traders dream atm.
> its got strong buy side vs sell side.
> lets see how she runs today, nice to see $1+






Nathan_b said:


> Looks like we will have a run before close, the rate its ticking over we should see 94.5 cent close today....



 Volume is way too low and there is hardly any range ---> That's a daytraders nightmare rather than a dream. And it looks like closing below yesterday's close.


----------



## Joe Blow (15 February 2008)

Nathan_b said:


> Looks like we will have a run before close, the rate its ticking over we should see 94.5 cent close today....




Nathan, these kind of posts add absolutely no value to the thread whatsoever.

In any case, you were wrong. There was no run and CCP finished the day at 92c, down 4c from yesterday's close.

In future, please *add more substance* to your posts in stock threads, otherwise they will be removed.


----------



## ROE (15 February 2008)

Joe Blow said:


> Nathan, these kind of posts add absolutely no value to the thread whatsoever.
> 
> In any case, you were wrong. There was no run and CCP finished the day at 92c, down 4c from yesterday's close.
> 
> In future, please *add more substance* to your posts in stock threads, otherwise they will be removed.




Should you consider that a ramping and remove it anyway? giving a an exact price target is ramping in my opinion


----------



## Joe Blow (15 February 2008)

ROE said:


> Should you consider that a ramping and remove it anyway? giving a an exact price target is ramping in my opinion




It is definitely ramping but sometimes I feel as though I need to say something in public, so others are made aware of what is acceptable and what isn't acceptable to post in stock threads here at ASF.

Rest assured that any more posts along these lines will be removed and infractions issued.


----------



## ROE (16 February 2008)

rub92me said:


> Volume is way too low and there is hardly any range ---> That's a daytraders nightmare rather than a dream. And it looks like closing below yesterday's close.




Look on the bright side, it's going ex-dividend this week if you get them at 92 cents you get a 2.2% dividend come March


----------



## annalivia (18 February 2008)

The latest comments from CAM on CCP

"A review of the half year result  establishes that  the business has fallen to below investment grade. 
We have serious concerns over the level of gearing employed. A substantial and unexplained increase in trade creditors without a corresponding increase in cash is a liquidity concern. The substantial increase in debt is a function of slowing in revenue growth (ie collections) and a substantial increase in employee costs. 
The company has instigated a strategic review and indicated that the level of debt purchases in the June half will decline. The Comapny will have to address its ballooning costs and has indicated a $5 million cost will be incurred. The carrying value of ledgers will be scrutinised at the June audit. 
Return on Equity has collapsed and as such the Company is a highly speculative investment."

Any comments.
The warm fuzzy feeling I had when I bought up big last week seems to be dissapearing.


----------



## dhukka (18 February 2008)

annalivia said:


> The latest comments from CAM on CCP
> 
> "A review of the half year result  establishes that  the business has fallen to below investment grade.
> We have serious concerns over the level of gearing employed. A substantial and unexplained increase in trade creditors without a corresponding increase in cash is a liquidity concern. The substantial increase in debt is a function of slowing in revenue growth (ie collections) and a substantial increase in employee costs.
> ...




I found it stunning that so many here put faith in management's ability to turn this around after their monumental stuff ups. How anyone can put faith in what management says is beyond me. 6 months ago the company forecast profit for FY08 of *$24 *million. Just 2 months later they slashed that forecast by *-25%*.  Last week they slashed that forecast by a further *-50%* .  Now everything is going to be all-right because management said so.  

Anna, I'm sure you are well versed in Brian McNiven's words of wisdom but here is a reminder if you've forgotten.



> There is a tendency to forgive or overlook management shortcomings in the expectation that management has learnt from its mistakes and is unlikely to repeat past errors of judgement or misrepresentation. It has been my experience that the ingrained culture that led to such inadequacies is either slow to change or never changes........Things do change  - occasionally for the better but more frequently for the worse.


----------



## Pager (18 February 2008)

My 

Sounds like Clime are getting out the? Maybe put the SP under a bit more pressure.

As Clime have said "the Company is a highly speculative investment."

Would have to agree with that, I'm holding for the long term and bought at 99cents but my stake is very small, don't think the SP will be going up in a hurry, maybe take a few years but cant believe a company that's was going so well can suddenly fail, highly speculative it is but they have shown they can do well so why not again.


----------



## annalivia (18 February 2008)

dhukka said:


> There is a tendency to forgive or overlook management shortcomings in the expectation that management has learnt from its mistakes and is unlikely to repeat past errors of judgement or misrepresentation. It has been my experience that the ingrained culture that led to such inadequacies is either slow to change or never changes........Things do change - occasionally for the better but more frequently for the worse.




Funny you should mention Brian McNiven as I just today lent someone at work his book "A Wonderful Company at a fair price". Maybe I need to get it back and read it again.
However I wonder how many CCP shares Brian had/has because of his tie in with CAM and Stockval.

I am all over the place with this stock. I just sold half and I will have a think about it tonight in regards to selling the rest. 

I think my ego is hurting as I got this so wrong and I keep buying up at lower prices to make me feel better.

This was "A Wonderful Company at a fair price" but it is probably now "A fair Company at a wonderful price" and we know which one Mr Buffett would rather own.


----------



## ROE (18 February 2008)

Hehehe doubt and panic start to take shape as the company are trades lower and lower each day ... Dont buy stock for 10 minutes if you not willing to hold it for 10 years  ..

Really you made some good judgment and some bad every now and then...even good judgment can sometimes turn bad just take it as it is...you done all you can. There are more to life than stock  take a holiday, go for a walk, spend time with the family, drink nice coffee...

Dont turn into Gordon Gecko in Wall St


----------



## annalivia (18 February 2008)

ROE said:


> Hehehe doubt and panic start to take shape as the company are trades lower and lower each day ... Dont buy stock for 10 minutes if you not willing to hold it for 10 years  ..
> 
> Really you made some good judgment and some bad every now and then...even good judgment can sometimes turn bad just take it as it is...you done all you can. There are more to life than stock  take a holiday, go for a walk, spend time with the family, drink nice coffee...
> 
> Dont turn into Gordon Gecko in Wall St




Point taken.
However as I believe you pointed out before.... you buy up and ask questions later.
Well I have been asking some questions and getting answers such as 

"A review of the half year result establishes that the business has fallen to below investment grade."
"Return on Equity has collapsed and as such the Company is a highly speculative investment."

Putting aside for the moment that it was CAM and Stockval that got me into the stock in the first place they now put a valuation on this company of 65 cents.

Anyway.... I definitely agree with "take a holiday, go for a walk, spend time with the family, drink nice coffee".


----------



## ROE (18 February 2008)

Maybe you can take conform in Uncle Warren words

"In other instances, a great  investment opportunity occurs when a marvelous business  encounters a one-time huge, but solvable, problem as was the case many years back at both American Express and GEICO. Overall, however, we've done better by avoiding dragons than by slaying them."

Uncle Warren doesnt like to get into trouble business but he does it every now and then.

Wasnt CCP an exceptional company before the whole profit down grade, not because it was trading at $12 down to $1 but that fact of its 7-8 records of extremely good return on equity and capital allocation.

I think this problem is huge but it solvable and I'm not saying it without risk.
There are great risk associated with it. I will give CCP 2-3 years before I come to a conclusion that I made a good or bad investment decision on this stock


----------



## annalivia (18 February 2008)

ROE said:


> Maybe you can take conform in Uncle Warren words
> 
> "In other instances, a great  investment opportunity occurs when a marvelous business  encounters a one-time huge, but solvable, problem as was the case many years back at both American Express and GEICO. Overall, however, we've done better by avoiding dragons than by slaying them."
> 
> ...




I don't think we can compare this with Buffett and AMEX. Spot the difference....

"In the wake of the scandal, American Express's stock fell 45%, from *$60 a share down to $35* a share by early 1964. 

At that time, Warren Buffett was running a small investment partnership he'd started 8 years before with $105,000 he'd raised from friends and family. As Buffet's mentor, the original value investor, Benjamin Graham, was watching with great interest as the Salad Oil Swindle unfolded. Buffett researched the situation, bought shares, and even testified on behalf of American Express *management, which had remained honest and forthright throughout the ordeal.* "

The price drop is a little different and the big one is I do not think that CCP management has remained honest and forthright. Do you?

I agree Buffett's strategy - buying beleagured-yet- fundamentally sound companies at depressed prices - still holds inveterate lessons for the value investor.  However there are caveats.


----------



## ROE (18 February 2008)

No point agonizing over  a stock that you lost money.

If you feel it now a dog stock or no longer meet your objective, why not sell up and buy another stock? Or do something with that spare cash it's probably better for your health too, save you plenty of further headache and you can offset your capital gains for this financial year  .. Plenty of reasons to do it, if you want to.


----------



## MRC & Co (21 February 2008)

I feel the price drop of this one has been unjust currently, maybe CAM dumping?  

Its in extremelly oversold territory and we might get a bounce soon based on an exhaustion rally!  Volume is starting to become low again, falling below 1mil in the last two days.  See what happens to volume over the next few days, if it thins out and then starts to pick up again, might be time for the bounce?  Maybe Im just being optimistic but cant see this one going too much lower if the market continues to trend sideways or move upwards.


----------



## josjes (27 February 2008)

Roger Montgomery of Clime Capital has sold all position on CCP at price between
93c and $1 on 14 Feb, 3 days after the profit downgrade. 
For anyone interested in his reasoning here is CAM announcement today.


----------



## MRC & Co (27 February 2008)

josjes said:


> Roger Montgomery of Clime Capital has sold all position on CCP at price between
> 93c and $1 on 14 Feb, 3 days after the profit downgrade.
> For anyone interested in his reasoning here is CAM announcement today.




Cheers for that, he got out a lot earlier than I thought.

Though as it is only a very small portion of my portfolio, I will continue to hold this one for at least a couple years!  

Bit of contrarian investment is never a bad thing!


----------



## ROE (29 February 2008)

Someone just take a big stake in CCP. I cant read the damn form with hand writing, can someone with better eyes read it? 

Obviously someone sees value in this.


----------



## ROE (29 February 2008)

MRC & Co said:


> Cheers for that, he got out a lot earlier than I thought.
> 
> Though as it is only a very small portion of my portfolio, I will continue to hold this one for at least a couple years!
> 
> Bit of contrarian investment is never a bad thing!




I'm still holding like I said I dont bold until a few years into the turn around and the business proved to be a bad choice... then I accept defeat...

I'm very surprised CAM get out so early without giving them a chance to restructure after they are so pro CCP.

That tells you they got no guts to stick by their convictions but are quick to claim credit for bull market run. Take real courage to be a contrarian, where they walk the talk.


----------



## exgeo (29 February 2008)

I'm not surprised at all. If you'd just met with management who told you while looking in the eye "everything's fine" and then 3 weeks later come out with a second profit downgrade, would you have any faith in them to execute a re-structure and let you know candidly how it was going? Better to cut your losses and redeploy the cash elsewhere. Plenty of other opportunities for finding value in a market like this.


----------



## ROE (29 February 2008)

exgeo said:


> I'm not surprised at all. If you'd just met with management who told you while looking in the eye "everything's fine" and then 3 weeks later come out with a second profit downgrade, would you have any faith in them to execute a re-structure and let you know candidly how it was going? Better to cut your losses and redeploy the cash elsewhere. Plenty of other opportunities for finding value in a market like this.




Maybe they pestering the management too much for such a small stake that doesn't even register on the substantial share holder list so they give them a bit of walk down the garden


----------



## MRC & Co (29 February 2008)

ROE said:


> Maybe they pestering the management too much for such a small stake that doesn't even register on the substantial share holder list so they give them a bit of walk down the garden




ha ha ha.

I cant read the handwriting either.  But good to see some optimism in this one.  Trouble is, in the short-term, there will be a lot of profit takers all the way up the price scale who will act as resistance.  

However, long-term, could well and truly be bucketloads of money made for those invested.  Prooven historical success.  

As you said earlier ROE, walk to the amazon for 3 years, hide this one under the rug, because its price collapse appears enough to even scare the contrarians at the moment, who appear to be bailing out as well.  

As for the technicals, hopefully this upturn is enough to buck the trend.  MACD crossover and RSI just turned up from EXTREME oversold conditions.  Volume remains relatively flat however, in comparison to recent times.  

Thx.


----------



## meglas (29 February 2008)

The whole of the bank loan facility of $144.6M has an expiration date of 3 January 2009.  That now shifts the liability from Non-Current to Current.  With the share price collapse and the problems in credit markets at present, one would now think that CCP will have a major hurdle in re-financing this facility when it falls due.  If covenants are broken in the meantime, then this could bring forward this problem.

My calculations on the latest figures released reveal a slide in revenue collection at the rate of 36.5% pa whilst available for sale financial assets are growing at the rate of 33.3% pa.  This is a real crunch.

CCP intends to cut back on ledger acquisitions in order to handle the cashflow problem.  This whole affair is going from bad to worse.  Expect more bad news, especially when the $5M review gets underway!


----------



## ROE (1 March 2008)

ok someone pointed out to me it's Veduta Estates that took the stake.
According to this history they used to hold 20% of CCP, locked in their profit (smart move) and got out between 2005-2006. Now they are back dont know the reasons behind it.

http://au.finance.yahoo.com/q/ast?s=CCP.AX


----------



## battiwallah (1 March 2008)

On the 27th February “Veduta Estates” and “Vahivi P/L” of Northbridge, NSW bought a total of 2,010,014 plus 313,139 (+2,323,153) shares in CCP.  This makes the transactions total about $1.5M.  The 2007 annual report shows Veduta having 2M shares, so this new purchase gives them a total of about 4.3M and thus a 10% stake in the company (current shares on issue are about 43.3M).

Veduta Estates have previously had large interests in CCP.  In early 2005 they had 33% of the issued shares which were subsequently reduced to 23% and then 13% in late 2005.

The “Sole Proprietor” of these two companies (Veduta Estates and Vahivi) is a Mr Henry Calleia.  Now Mr Simon Calleia is currently a director of CCP and was previously managing director of CCP.  Presumably Henry Calleia is a close rlation of Simon?

Conclusion is that Mr Calleia is an astute purchaser with an intimate knowledge of the company and is risking his own capital to buy shares at a time when other investors with less knowledge are abandoning it.

This is not a time to give up hope!

Nevetheless, the notes provided by meglas are useful and should be kept in mind.


----------



## ROE (1 March 2008)

Yes going forward there are definitely some risks to the business, like any business with debt and reduce earning, but I cant help but wondering they have 300,000 plus people paying them debt, I assume a lot of these are re-occurring schedule payment like $50 or $100 bucks a week/fortnight as their pay come into their account so that should give them a decent stable income for part of their book.

We will find out in 6-12 months time wont we


----------



## ROE (1 March 2008)

meglas said:


> The whole of the bank loan facility of $144.6M has an expiration date of 3 January 2009.  That now shifts the liability from Non-Current to Current.  With the share price collapse and the problems in credit markets at present, one would now think that CCP will have a major hurdle in re-financing this facility when it falls due.  If covenants are broken in the meantime, then this could bring forward this problem.
> 
> My calculations on the latest figures released reveal a slide in revenue collection at the rate of 36.5% pa whilst available for sale financial assets are growing at the rate of 33.3% pa.  This is a real crunch.
> 
> CCP intends to cut back on ledger acquisitions in order to handle the cashflow problem.  This whole affair is going from bad to worse.  Expect more bad news, especially when the $5M review gets underway!




Maybe Mr Henry can lend CCP some cash since he made so much profit from it assume he sold around 12 Millions shares between 6-7 bucks he would pocket 50 Mil or so profit


----------



## ROE (1 March 2008)

battiwallah said:


> On the 27th February “Veduta Estates” and “Vahivi P/L” of Northbridge, NSW bought a total of 2,010,014 plus 313,139 (+2,323,153) shares in CCP.  This makes the transactions total about $1.5M.  The 2007 annual report shows Veduta having 2M shares, so this new purchase gives them a total of about 4.3M and thus a 10% stake in the company (current shares on issue are about 43.3M).
> 
> Veduta Estates have previously had large interests in CCP.  In early 2005 they had 33% of the issued shares which were subsequently reduced to 23% and then 13% in late 2005.
> 
> ...




Did some research and found this in 2002 Annual Report

"Fees regarding services to the company re business acquisitions totalling $24,002 were payable to Mr H. Calleia, a family member of Mr S. Calleia, the Managing Director of Credit Corp Group Ltd."

so they are definitely closely link.


----------



## dhukka (1 March 2008)

meglas said:


> CCP intends to cut back on ledger acquisitions in order to handle the cashflow problem.  This whole affair is going from bad to worse.  Expect more bad news, especially when the $5M review gets underway!




Yeah it's really hard to envisage any good news coming from these guys in the short to medium term. We've had two rapid downgrades in succession, what is the likelihood of any positive news coming out of their review? Will things magically appear to be better than they were? A purchase of CCP currently has more to do with speculating than investing.

That said, battiwallah makes an interesting observation about the insider buying of Mr Calleia. The so-called smart money may be getting in.


----------



## ROE (1 March 2008)

dhukka said:


> Yeah it's really hard to envisage any good news coming from these guys in the short to medium term. We've had two rapid downgrades in succession, what is the likelihood of any positive news coming out of their review? Will things magically appear to be better than they were? A purchase of CCP currently has more to do with speculating than investing.
> 
> That said, battiwallah makes an interesting observation about the insider buying of Mr Calleia. The so-called smart money may be getting in.




Assume smart money is right, the real test is when Henry increase his stake to more than 10% and also when you down and crying it's better to paint a bleak future and over deliver than paint a good future and under-deliver.

I notice TLS do that when Sol took over and I come in at $3.50 

I call it shot the dead dog and raise a new puppy


----------



## dhukka (5 March 2008)

And Geoff Lucas in outta there. Hard to tell if that's a positive or negative at this stage. Looks like we'll have to wait until the end of March.


----------



## ROE (5 March 2008)

dhukka said:


> And Geoff Lucas in outta there. Hard to tell if that's a positive or negative at this stage. Looks like we'll have to wait until the end of March.




Maybe it's a good thing, bring back Simon Calleia, don't know why he hand over the job to Lucas a couple years ago got to find out.

Simon is doing a good job up until then, I'm not sure who else apart from Lucas lead alot of people down the garden path about CCP earning, so maybe some of these guys need to go too.


----------



## michael_selway (5 March 2008)

ROE said:


> Maybe it's a good thing, bring back Simon Calleia, don't know why he hand over the job to Lucas a couple years ago got to find out.
> 
> Simon is doing a good job up until then, I'm not sure who else apart from Lucas lead alot of people down the garden path about CCP earning, so maybe some of these guys need to go too.




Hm another director resignation

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 45.0 23.1 24.1 27.4 
DPS 23.0 4.0 8.0 15.0 *

Thx MS



> Date: 15/2/2008
> Author: Brendan Swift; Peter Wells
> Source: The Australian Financial Review --- Page: 70
> A profit warning by Australian-listed debt collection agency Credit Corp Grouphas led to a share price decline. On 11 February 2008, it closed $A3.08 lower atjust $A0.91, with immediate unfortunate consequences for CEO Geoff Lucas. Thedrop in value triggered a margin call, and he was forced to divest 235,000 ofhis total holding of 655,000 shares in Credit Corp. The entity is looking toconduct a review of both board members and management, and new directors orexecutives could be appointed soon. Similar margin calls for leading personnelhad recently also affected MFS Limited and Allco Finance Group


----------



## MRC & Co (6 March 2008)

Up 25% because the managing director resigned? 

This market is insane!  

SDG is the weirdest of the lot!


----------



## ROE (6 March 2008)

MRC & Co said:


> Up 25% because the managing director resigned?
> 
> This market is insane!
> 
> SDG is the weirdest of the lot!




Maybe there are a lot more people who dont like Lucas and just wait for him to go before they buy the stock

In reality a shake up Lucas must go anyway because he mislead the market about earning and any institution that are going to buy into this stock in the future they wont accept that sort of management.

All round good news Bring back Simon


----------



## MRC & Co (28 March 2008)

Great news for CCP.

Went para today!  Looking bright for CCP holders, especially those that got in at the lows!  You would have already made a mint!  Unfortunately, I got in over 90c, but there is still room for this one to run yet!


----------



## ROE (29 March 2008)

Stunning news  

CCP my second biggest holding during the recent low, I be happy with a 4 baggers on this guys in a few years. And oh yeah dividends just got bank into the account too ..double good news..

The biggest holding is SUN with recent low and see what this sucker can do in a couple years


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## battiwallah (25 April 2008)

"Investor's Mutual", one of the major shareholders in Credit Corp, just increased its stake in the company from 7.64% of the shares 9.51%, an increase of about 820,000 shares.  Must have cost around $650k.

Is this a vote of confidence in the future of CCP?  Is it a "buy"?


----------



## MRC & Co (25 April 2008)

Definately a buy IMO.  One of my few long-termers.  

Though there is a higher element of risk, the potential rewards far outweight it IMO.  I would not be surprised to see this one double in price over the next year or 2.


----------



## ROE (30 June 2008)

Nothing a bit of good news cant fix ..... down -10% in the morning, then news comes out end the day +4% 

High risk high reward


----------



## MRC & Co (2 July 2008)

At least one of my 3 long-term dogs are paying off!!  

Cha - Ching!

Can it break that $1 mark and really run?  Will be interesting to see the EOY figures, it's going to really move one way or the other!


----------



## ROE (2 July 2008)

If the CCP reach their high end figure of EBITA, this stock can easily double what it is now in a year and they still pay sweet dividend between now and then


----------



## bluecheese101 (5 August 2008)

Credit Corp has announced today a Dividend reinvestment option. Im fairly interested in it as the dividend is pretty tiny anyway ($0.02) so i'll prob go for it.


----------



## ROE (13 August 2008)

Steady increase in price since the law suit announcement ... I wonder what tomorrow result will bring .. let hope it's a good one


----------



## MRC & Co (13 August 2008)

ROE said:


> Steady increase in price since the law suit announcement ... I wonder what tomorrow result will bring .. let hope it's a good one




Yep, tomorrow should be an interesting day.  

I have been hit all over the shop on the wrong side of earnings releases this reporting period.  Just another reminder why you should stay out of it when trading!

I have another in store for me when US opens tonight, so let's hope CCP can do me proud tomorrow!


----------



## ROE (14 August 2008)

Nice I like the result 
EPS 12 cents on 88 cents stock  dividend pay out nice and slow at 4 cents
keep those money for raining day  and repay debt is on the agenda 

That the sort of approach I like


----------



## mark_au (14 October 2008)

Hi Guys

Ive been a long term credit corp holder. I was feeling pretty gutted after the lies of the management team and it all spiraled down. I didnt get out in time so im still holding. Does anyone have any thoughts on how long or if these guys will claw their way back ??

Cheers
Mark


----------



## bluecheese101 (14 October 2008)

mark_au said:


> Hi Guys
> 
> Ive been a long term credit corp holder. I was feeling pretty gutted after the lies of the management team and it all spiraled down. I didnt get out in time so im still holding. Does anyone have any thoughts on how long or if these guys will claw their way back ??
> 
> ...





I'm in exactly the same situation after i bought in between the two massive crashes almost a year ago. I think Credit Corp are long term but i don't know how long that would take. Today was a positive sign though, with CCP closing 15% up


----------



## ROE (14 October 2008)

mark_au said:


> Hi Guys
> 
> Ive been a long term credit corp holder. I was feeling pretty gutted after the lies of the management team and it all spiraled down. I didnt get out in time so im still holding. Does anyone have any thoughts on how long or if these guys will claw their way back ??
> 
> ...




Don't know how long you prepare to hold or your entry price 

but I didn't buy it until it crashing down so I'm fairly happy with the ways things are going at a moment and if they continue to pay me 4 cents dividend a year I'm cool.

My time frame is 5 years or longer, it been a year or less for me on this stock.


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## mark_au (15 October 2008)

Just had a look at my CCP purchase, haven't had them as long as i thought ;:eek 
i got most of them in 06 at $8.00 Ahahahaha..
I think , i'll be waiting a while to recoup LOL


----------



## ROE (15 October 2008)

mark_au said:


> Just had a look at my CCP purchase, haven't had them as long as i thought ;:eek
> i got most of them in 06 at $8.00 Ahahahaha..
> I think , i'll be waiting a while to recoup LOL




yeah I be party all year if CCP go to $8  but unlikely hoping $2 in the next 2 or 3 years but who knows if they can get back to their early day efficiency 
it should rocket according to earning


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## MRC & Co (18 October 2008)

Yeh, CCP has been faring well in this market anhialation!  

If only they can collect some debt and who knows, maybe banks will start giving it away for free!  

Either way, one of my only bottom drawer holds currently.


----------



## mark_au (18 December 2008)

Just saw an announcement for CCP, a director has left to pursue his legal career.. His legal firm will be providing  services to CCP.. is this fishy ?? Seems like there is still some rumblings in mgt there... Not happy Jan.. Wish i had had a spot loss on those guys... Kept putting it off as you have to do some dumb test thing on comsec to be able to use them, Sigh....


----------



## bluecheese101 (15 February 2009)

Just had a look at CCP and the process serving arm of the company, Wise McGrath has been sold. I think they bought it only a few  years ago from memory. Not a bad decision though the cash - to be paid in stages - will be used to buy new ledger accounts.


----------



## ROE (16 February 2009)

Speeding ticket ahead of report tomorrow 
http://www.asx.com.au/asxpdf/20090216/pdf/31g2ckv6rx5ft9.pdf


----------



## bigdog (16 February 2009)

The speeding ticket was based on 12 trades for $26,000; the ASX have lost their way, only heaven can help us!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Heaven help us when we watch WOR Worley Parsons crash from $38 to below $16 with NO ASX request for explantion!

SP up 7.5 cents to 55 cents (also high for today)
-- there were 12 trades with volume of 50,198 shares
-- hardly on fire!

Time------  	Price  	Vol..  	Value  	Condition Codes
15:31:53	0.550	9,008	4,954	
14:31:12	0.550	992	546	
14:29:03	0.540	590	319	
14:22:51	0.540	9,410	5,081	
14:22:51	0.535	3,590	1,921	XT
11:02:38	0.510	1,808	922	
11:02:08	0.500	1,000	500	
10:45:06	0.510	15,000	7,650	
10:43:49	0.510	5,192	2,648	XT
10:42:47	0.500	2,400	1,200	XT
10:42:47	0.500	900	450	XT
10:42:47	0.50	308	154	XT
----------------	50,198	$26,345	




ROE said:


> Speeding ticket ahead of report tomorrow
> http://www.asx.com.au/asxpdf/20090216/pdf/31g2ckv6rx5ft9.pdf




Share Price Movement
Monday 16 Feb 2009

The Manager Company Announcements Office ASX Limited 20 Bridge Street Sydney NSW 2000 Share Price Movement

16 February 2009

The Company has noted a 15% increase in its share price today, albeit on very modest volumes. 

In response to this increase and in the interest of ensuring that all market participants are fully informed the Company makes the following statements: 

1. The Company will release its results for the half year to 31 December 2008 at approximately 9:45am on Tuesday 17 February 2009. 

2. Subject to audit review and approval by the Board of Directors, those results will show a continuation of the strong performance for the first four months of the year reported at the Company’s Annual General Meeting on 11 November 2008, with EBITDA and NPAT tracking ahead of the guidance issued on 14 August 2008. 

3. As a consequence of this sustained performance the Directors are presently reviewing the Company’s full year earnings guidance and, subject to Board approval, it is likely that an increased guidance will be issued in conjunction with the half yearly results announcement. 

For further information please contact: Don McLay Chairman Credit Corp Group Limited Tel: 02 9347 3600 E : dmclay@creditcorp.com.au Thomas Beregi Chief Executive Officer Credit Corp Group Limited Tel: 02 9347 3600 E : tberegi@creditcorp.com.au


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## bluecheese101 (28 February 2009)

Go you good thing! From an all-time low of $0.39 cents a few weeks a go to a close today of $0.73 Exactly one more dollar to go and i will break even


----------



## ROE (28 February 2009)

bluecheese101 said:


> Go you good thing! From an all-time low of $0.39 cents a few weeks a go to a close today of $0.73 Exactly one more dollar to go and i will break even




Don't worry about the share price, when the earning is there Mr Market will adjust price accordingly


----------



## MRC & Co (1 April 2009)

Tsssssssssssssssssssssss.

Love this little gem.  One of my 2 long-termers and it's zooming lately.  What better company to hold in this environment, than a debt collector hey?  

Closed at $1, good to see it actually close here.  Let's hope for a good night on the street tonight and this could really get a boost tomorrow, for a start of quarter portfolio aquisition.


----------



## nomore4s (1 April 2009)

I haven't had a look at this one for a while.

Interesting. A solid break through $1.00 could send this stock a fair bit higher. Have a look at the year long basing pattern under $1.00.

If anyone has read Stan Weinsteins book this is nearly a text book stage 1 pattern. Might have to dip my toe in for my income portfolio - 1/2 parcel to start with.

Weekly chart attached.


----------



## michael_selway (1 April 2009)

MRC & Co said:


> Tsssssssssssssssssssssss.
> 
> Love this little gem.  One of my 2 long-termers and it's zooming lately.  What better company to hold in this environment, than a debt collector hey?
> 
> Closed at $1, good to see it actually close here.  Let's hope for a good night on the street tonight and this could really get a boost tomorrow, for a start of quarter portfolio aquisition.




Why is it goign up?

*Earnings and Dividends Forecast (cents per share) 
2008 2009 2010 2011 
EPS 12.2 21.5 19.9 30.4 
DPS 4.0 4.0 4.0 6.5 *






thx

MS


----------



## MRC & Co (1 April 2009)

Nomore, exactly, that 1 buck area is vital.  That's why I was glad they closed it on there today, usually that mark is quickly seen with some profit taking and pushing back down.  Not to mention, that MAMOTH gap above, though don't think a technical reason could push us that high anytime in the next few years, considering the fundamental reason for the collapse.  

Michael, I had it undervalued even at $1, can't remember my valuation exactly now, don't have it with me but it was a fair bit higher, hence was worthy enough for the chance to move into my currently empty bottom drawer.


----------



## MRC & Co (2 April 2009)

MRC & Co said:


> Nomore, exactly, that 1 buck area is vital.




Unfortunately, even with that push up today, we still couldn't crack the level.

Still have faith in it over the longer-term but really need to settle above the $1 mark to be able to form a sustained move higher.


----------



## persistentone (27 April 2009)

I noticed that Credit Corp is not showing any trades today using Reuters for the graph.   Is there some press release to explain this?


----------



## persistentone (27 April 2009)

michael_selway said:


> Why is it goign up?
> 
> *Earnings and Dividends Forecast (cents per share)
> 2008 2009 2010 2011
> ...




Can you tell us which web site gives you that nice graph showing director buys overlaid on the price chart?


----------



## bigdog (27 April 2009)

persistentone said:


> I noticed that Credit Corp is not showing any trades today using Reuters for the graph.   Is there some press release to explain this?




Company Trading Status: Normal 

There are no buyers prepared to pay the sellers SP!!

2 buyers 		$1.005  6,119  shares
2 sellers $1.075  	1,500   shares


----------



## persistentone (27 April 2009)

Oh man, talk about no liquidity!   This thing could trace back pretty sharply under $1 with that kind of thin market.    

I wonder if this whole pattern to above $1 was primarily the directors and management buying their additional shares?


----------



## MRC & Co (10 May 2009)

Man, what a chance to buy off that $1 mark after we finally cracked it and then came back for a re-test.  

ROE, still holding a huge parcel of this one?  

Nomore, did you add any yourself?


----------



## ROE (10 May 2009)

MRC & Co said:


> Man, what a chance to buy off that $1 mark after we finally cracked it and then came back for a re-test.
> 
> ROE, still holding a huge parcel of this one?
> 
> Nomore, did you add any yourself?




Yup still holding and haven't let go any...the CEO is doing a superb job...
he need a pay rise  . I rare sell stock until it trades above intrinsic value

the dividend I get while I wait,I reinvest into other good company that get treated like a dog by Mr market mood swing something like Flight Centre recently.

I'm happy with 4 cents dividend payment, hoping in a couple year it increase to 6-10 cents  ..if it can show Mr market it can deliver 20 cents plus earning a year for the next year or 2 and goes back to the good old day ROE.. $3 mark is not far behind.

I like to buy stuff cheap and waiting something good to happen to it


----------



## MRC & Co (10 May 2009)

Good to hear mate, you always were one of the best practical fundamental analysts around here!

Hope it can get near the $3 mark as you say, and no doubt, if management can keep this one on track, it has the fundamental business ability to do so.  

Good luck with the rest of your investments, hope they are doing well also!


----------



## nomore4s (10 May 2009)

MRC & Co said:


> Man, what a chance to buy off that $1 mark after we finally cracked it and then came back for a re-test.
> 
> ROE, still holding a huge parcel of this one?
> 
> Nomore, did you add any yourself?




Yeah I did get some for my income portfolio on the retest of $1.00, I think my ave is around $1.05. Only a small parcel though as I'm only buying 1/2 or 1/4 parcels for that portfolio atm.


----------



## bigdog (21 May 2009)

Great ASX ANN today which the market loved.!!

CCP  $1.11 +$0.140  +14.43%  with a high of $1.16 91,335 shares  $103,121 @ 21-May 10:19:48 AM 

21-05-2009 09:38 AM  CCP  Market update announcement  
http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=00954815

*Highlights*
Directors of Credit Corp Group Limited are pleased to report continued strong performance over the 4 months to April 2009. Further improvements in operational effectiveness mean that the Company is on track to deliver the upper end of its Net Profit After Tax (NPAT) guidance issued in February 2009 while exceeding the Earnings Before Interest Tax Depreciation and Impairment (EBITDA) guidance issued at the same time. The Directors also provide updated full year guidance to 30 June 2009.

*Performance Commentary*
The Company is on track to achieve a record EBITDA result for the full year. This is despite relatively modest PDL purchasing, indicating that operational improvement initiatives and overhead reductions implemented over the past year are delivering sustained positive results.

The Company continues to maintain its disciplined approach to PDL acquisitions, after increasing its monthly rate of purchasing by 70% against the first half of the year. The average result for all recent purchases continues to meet the Company’s minimum return hurdle.

Further improvements in collection operations remain as the key driver of favourable performance. The returns from older PDLs continue to improve, with the proportion of total revenues collected from PDLs acquired more than 2 years ago increasing from 21% in the March 2008 quarter to 43% for the 4
months to April 2009. Despite the increased focus on older PDLs, direct collection staff productivity of $227 per hour was achieved in the period, an increase of 20% over the same period in the previous year.

In line with the increase in purchasing the Company has grown its collection workforce by 24 Full Time Equivalent (FTE) staff to 406. The Company is on track to grow its collection workforce to 430 FTE by June 2009.

*Financial Position*
Sustained operational performance over the last 4 months has further strengthened the Company’s financial position. Net bank debt was reduced by $8.5m over the period to $89.9m. This brings the Company’s net debt as a proportion of the carrying value of its PDL portfolio to 51%. This represents
the lowest level of gearing experienced by the Company since the 2005 financial year.

This level of gearing is well within the levels required by the Company’s banking covenants, creating substantial capacity to increase the Company’s rate of purchasing as appropriate. Accordingly, the Company has already secured $30m of its FY2010 purchasing requirement.


----------



## persistentone (21 May 2009)

Can someone walk me through the accounting here.   Credit Corp is on target to earn $10M for 2009, but they are claiming target EBITDA of $100M.   That's an enormous difference, and how is the other $90M accounted for?   Is this an impairment charge, or is it some quirk in how they EBITDA is calculated for their particular business?   I'm not sure that EBITDA in this case represents any real earnings power of the company.


----------



## persistentone (21 May 2009)

persistentone said:


> Can someone walk me through the accounting here.   Credit Corp is on target to earn $10M for 2009, but they are claiming target EBITDA of $100M.   That's an enormous difference, and how is the other $90M accounted for?   Is this an impairment charge, or is it some quirk in how they EBITDA is calculated for their particular business?   I'm not sure that EBITDA in this case represents any real earnings power of the company.




The largest part of the difference appears to be due to impairment.  What I am not understanding is how do they collect on these debts and then immediately claim an impairment against them?   The fact that the impairment charge is being added back to calculate EBITDA strongly suggests they did collect the money for that.


----------



## bigdog (21 May 2009)

persistentone

"The largest part of the difference appears to be due to impairment."

There was a note on impairment on the second CCP ANN today on page 9
-- refer the attachment

http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=00954826

*Credit Corp Upgrades Guidance*
http://www.istockanalyst.com/article/viewiStockNews/articleid/3239212

Sydney - Wednesday - May 20: (RWE Australian Business News) - Receivables management company Credit Corp Group Ltd (ASX:CCP) today reported continued strong performance over the four months to April. 

Further improvements in operational effectiveness mean that the company is on track to deliver the upper end of its net profit guidance issued in February while exceeding the earnings before interest, tax, depreciation and impairment (EBITDA) guidance issued at the same time. 

Directors also provided updated full-year guidance to June 30. 

In the 10 months to April (year to date) unaudited EBITDA was $79.8m and net profit $9.7m on revenue of $128.3m while basic earnings per share were 22.16c. 

Updated full-year 2009 guidance is for EBITDA of $93m-95m, a net profit of $10m-11m and basic EPS of 23-25c. 

For the 12 months ended June 30 the company achieved $85.72m EBITDA, a $5.36m net profit and basic EPS of 12.29c. 

Directors said the company was on track to achieve a record EBITDA result for the full year despite relatively modest purchased debt ledger (PDL) purchasing, indicating that operational improvement initiatives and overhead reductions implemented over the past year were delivering sustained positive results. 

The company continued to maintain its disciplined approach to PDL acquisitions, after increasing its monthly rate of purchasing by 70pc against the first half of the year. The average result for all recent purchases continues to meet Credit Corp's minimum return hurdle. 

Further improvements in collection operations remain the key driver of favourable performance. 

The returns from older PDLs continue to improve, with the proportion of total revenues collected from PDLs acquired more than two years ago increasing from 21pc in the March 2008 quarter to 43pc for the four months to April 2009. 

Despite the increased focus on older PDLs, direct collection staff productivity of $227 per hour was achieved in the period, an increase of 20pc. 

In line with the increase in purchasing, the company has grown its collection workforce by 24 Full Time Equivalent (FTE) staff to 406. 

The company is on track to grow its collection workforce to 430 FTE by June.


----------



## persistentone (21 May 2009)

bigdog said:


> persistentone
> 
> "The largest part of the difference appears to be due to impairment."
> 
> ...





So why would *better than expected revenue* drive impairment expenses higher?    Better collection / revenue implies less needs to be impaired?

There is something basic about their business model and how they take impairments that I simply don't understand (yet).


----------



## persistentone (22 May 2009)

Has anyone found a person in Credit Corp who will actually respond to investor questions?   Please post their contact details if yes.


----------



## persistentone (1 June 2009)

What would explain today's rise in Credit Corp?   The insider buying from last week doesn't seem like big news, and the volume today isn't that much.

It looks like this stock moves on the smallest of volumes.


----------



## studmuffin (1 June 2009)

persistentone said:


> What would explain today's rise in Credit Corp?   The insider buying from last week doesn't seem like big news, and the volume today isn't that much.
> 
> It looks like this stock moves on the smallest of volumes.




They cracked a new 52 week high that usually brings the punters out. 
The fact directors keep buying large parcels is interesting. 
I think this is in the process of being let out of the sin bin.

CLH is also starting to make the right kind of noises so it looks like it could be a sector thang.


----------



## persistentone (3 June 2009)

Has CCP given any forward guidance on the dividend?   I'm seeing four cents last year, and on the cash flow statement it is clear they could pay out much more dividend and still be using most of free cash flow to pay down debt.

What is their general guideline on the percent of free cash that they would like to pay as dividend?   When they cut back the dividend did they give any guidance about what conditions would need to be met to increase dividend?


----------



## ROE (7 June 2009)

persistentone said:


> Has CCP given any forward guidance on the dividend?   I'm seeing four cents last year, and on the cash flow statement it is clear they could pay out much more dividend and still be using most of free cash flow to pay down debt.
> 
> What is their general guideline on the percent of free cash that they would like to pay as dividend?   When they cut back the dividend did they give any guidance about what conditions would need to be met to increase dividend?




their policy in general is they pay a fair amount out in dividend when they are
comfortable with earning, balance sheet and future debt purchase 
just sick back and drink coffee and enjoy life and before you know it
it could be the next market darling when the bull charge back in


----------



## MRC & Co (7 June 2009)

Yeh, this one is looking extremelly solid.

On a healthy path to recovery.

Reckon most of us recent buyers would be well ITM at the moment.  

Cheers ROE and keep up your good analysis.


----------



## JTLP (8 June 2009)

MRC & Co said:


> Yeh, this one is looking extremelly solid.
> 
> On a healthy path to recovery.
> 
> ...




Recent buyers would definitely be in the money.

I was very keen to add this and IMF to my portfolio...unfortunately a lack of capital has kept me at bay.

ROE + MRC...do you think there is still scope for $$$ to be made off this? Or has the run up and majority of profits been achieved? I see that it is basically in unchartered territory (due to the 2 massive downgrades and falls) so it's hard to see what will happen in this period...but it just seems like i'm a little too late.

Would appreciate further analysis/answers!

Thanks


----------



## ROE (8 June 2009)

JTLP said:


> Recent buyers would definitely be in the money.
> 
> I was very keen to add this and IMF to my portfolio...unfortunately a lack of capital has kept me at bay.
> 
> ...




Every man should investigate and decide whether it's one cup of tea to buy into a certain business..

I try to buy something that I think worth a fair bit more than Mr market quote it daily on the stock market.....and I hang on to it for a long time...

What I hope to achieve is build a portfolio that deliver me regular dividend stream which in turn allow me to buy more great business or increase stake in certain business I see fit..

Regarding the stock over price or fair price is some what subjective as different people has different analysis and use different numbers and variable...and if you ask for my opinion, no this stock is not over price and I think it has some way to go yet...it's scary to see something going from 40 cents to $1.50 in less than a year but that the way Mr Market work...it devalue a company from $13 to 40 cents in less than a year too.

and remember nothing is a sure thing with Mr Market mood swing....if you don't understand or unsure and want to get out and take profit don't let other people opinion cloud your judgments 

and I unlikely to post up too many more of my analysis on the forum now that I don't have much time and have my own fund to run  ... I be spending more time digging through annual reports of unlove and out of favor companies and future market darling 

There are a few outstanding out of love company and if I don't spend time on these now I could missed out nice return 5-10 years from now..

Good luck with CCP


----------



## JTLP (8 June 2009)

ROE said:


> Every man should investigate and decide whether it's one cup of tea to buy into a certain business..
> 
> I try to buy something that I think worth a fair bit more than Mr market quote it daily on the stock market.....and I hang on to it for a long time...
> 
> ...




Thanks for that.

And don't stop posting your analysis and insights on companies...it is greatly appreciated!!!


----------



## MRC & Co (8 June 2009)

JTLP, agree with ROE, I cannot give you advice, but FWIW, I am still holding this one (as I believe we could see much higher prices yet in the longer-term, 12 months +).  Though I would not be surprised to see a pullback after it's recent run.  

I will wait for the final year statements and then re-assess the situation.  

ROE good luck with your fund, make sure you keep us in the loop with your analysis still, even if it is less often than before.  

Cheers


----------



## IntrinsicValue (9 June 2009)

ROE said:


> their policy in general is they pay a fair amount out in dividend when they are
> comfortable with earning, balance sheet and future debt purchase
> just sick back and drink coffee and enjoy life and before you know it
> it could be the next market darling when the bull charge back in




Sorry to go off topic but ROE, it says you have exceeded your private messages quota so I couldn't give my reply to you. It says you need to clear some space.


----------



## JTLP (9 June 2009)

MRC & Co said:


> JTLP, agree with ROE, I cannot give you advice, but FWIW, I am still holding this one (as I believe we could see much higher prices yet in the longer-term, 12 months +).  Though I would not be surprised to see a pullback after it's recent run.
> 
> I will wait for the final year statements and then re-assess the situation.
> 
> ...




No problems MRC I know the rules : Wasn't asking for advice either...just wanted to see where you see it currently. Just looking for LT holds and this one could be the goods (with a little research of course!).

Cheers

JTLP


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## persistentone (25 June 2009)

Under ASX rules, when a company does a share buyback, how many days after a specific buyback does a company have before it has to file and disclose the buyback?


----------



## persistentone (1 July 2009)

I'm kind of surprised that CCP didn't fall immediately after today's press release.   They claim that they are delaying repayment of a credit line (which is good) but will have to pay higher interest and endure additional covenants (which is bad).   They try to dismiss the interest and covenant changes as not material, but absent a specific disclosure I wouldn't view that as positive.


----------



## ROE (3 August 2009)

Market seem to go a bit crazy lately....
All the faithful CCP who bought it last year would double their money by now 
Heck FLT double/triple it in less than 3 months


----------



## bigdog (18 August 2009)

SP $1.81 down 3 cents @ 10:57 AM

ASX ANN
18/08/2009    *FY2009 Results Presentation *
http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=00978267

*Media Release*
Tuesday 18 August 2009

*Highlights*
Directors of Credit Corp Group Limited are pleased to report a strong performance for the year to 30 June 2009.  Continued improvements in operational effectiveness have produced a result at the upper end of the Company’s Net Profit After Tax (‘NPAT’) guidance issued in May 2009 while exceeding the Earnings Before Interest Tax Depreciation and Impairment (‘EBITDA’) guidance issued at the same time.

The Directors advise of the declaration of a final dividend of 2 cents per share.

*FY2009 Financials*

PDL acquisitions down 52% to $37.2m - (Guidance $35-40m)
Revenue (3) up 8% to $155.8m
EBITDA (2),(3) up 12% to $97.4m - (Guidance $93-95m)
NPAT (1),(2) up 3% to $10.7m - (Guidance $10-11m)
EPS (basic) (1),(2) up 2% to 24.26cents (Guidance 23-25cents)
ROE (1),(2) down 1pt to 15%
Dividend (full year fully franked) steady at 4 cents/share

(1) Excludes profit on sale of process serving business of $0.7m – sold Feb 09
(2) Prior year comparative is pre-restructuring costs
(3) Revenue and EBITDA from continuing operations

*Performance Commentary*
The Company has achieved record EBITDA, with growth of 12% over the prior year. This is despite a 52% reduction in PDL purchases. Operational improvement initiatives and overhead reductions have delivered sustained improvement over the course of the year.

The Company continues to maintain its disciplined approach to PDL acquisitions, after increasing its rate of purchasing over the second half of the year by 80% against the first half. The average result for all purchases made during the year continues to meet the Company’s minimum return hurdle.

Improvements in collection operations remain as the key driver of favourable performance. Returns from older PDLs continue to improve, with the proportion of revenues collected from PDLs acquired more than 2 years ago increasing from 25% in the June 2008 quarter to 50% in the June 2009 quarter. Despite the increased focus on older PDLs, direct collection staff productivity of $233 per hour was achieved in the final quarter, an increase of 10% over the same period in the previous year.

In line with the recent increase in purchasing the Company has grown its collection workforce by 30 Full Time Equivalent (‘FTE’) staff, or 7%, to 435. While this increase in recruitment will suppress reported productivity it will accelerate collections from the Company’s portfolio of new and existing PDLs.

As previously reported, the Company recorded a relatively high PDL impairment expense for the year. This is due to the impact of a number of factors including above-forecast collection revenue and modest levels of purchasing, together with a revision of future collections to account for the impact of projected increases in unemployment associated with the economic downturn. Unless collection revenues continue to exceed forecast, rates of PDL impairment are expected to return to lower levels.

*Financial Position*
Sustained operational performance over the year has further strengthened the Company’s financial position. Free cash flow of $44.3m was generated, reducing net bank debt by 35% to $81.2m. This brings the Company’s gearing measured by net debt as a proportion of the carrying value of its PDL portfolio to 47.7%. 

This is the lowest level of gearing experienced by the Company since introducing debt funding into its capital structure during the 2004 financial year.


----------



## persistentone (18 August 2009)

bigdog said:


> SP $1.81 down 3 cents @ 10:57 AM
> 
> ASX ANN
> 18/08/2009    *FY2009 Results Presentation *
> http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=00978267




Overall a pretty decent report, and they continue to impress me with their good management skills.   

Has anyone seen a specific disclosure about what interest rate they are now paying on their reset credit lines?   It would be good to see how much higher their interest costs are now than in the past.


----------



## bluecheese101 (19 August 2009)

Huge jump in profit and the share price barely moves - in fact, it went down!?  Im just glad i've finally broken even...18 long months since the Crash of Feb '08!


----------



## tonza (7 September 2009)

Hello all, pretty new to posting on these forums but plan to try to contribute more regularly. 

I have been passively watching CCP for a few months and have finally had a quick look at their numbers. The thing that struck me was the company's impressive cash flow generation and conservative capital expenditure. Free cash flow, not accounting earnings, is what determines the true value of a company. Credit Corp has also demonstrated in the past that it can reinvest this cash at a high rate of return on equity. Here is my first look Discounted Cash Flow calculation based on very conservative numbers. I didn't read into any reports too far so my results could be WILDLY exaggerated.

*Inputs/Assumptions:*

- Free Cash Flow (from FY09 Results Presentation): $44,300,000.
- Assumed no growth whatsoever.
- Discount rate (plucked it out of my head...its pretty conservative ): 16% 

Based on the numbers above CCP should be trading with a market cap of $276,875,000 and a stock price of $6.25.

Today it closed at $1.90 with a market cap of $84,090,200.

I will definitely be researching this stock further.


----------



## ROE (7 September 2009)

tonza said:


> Hello all, pretty new to posting on these forums but plan to try to contribute more regularly.
> 
> I have been passively watching CCP for a few months and have finally had a quick look at their numbers. The thing that struck me was the company's impressive cash flow generation and conservative capital expenditure. Free cash flow, not accounting earnings, is what determines the true value of a company. Credit Corp has also demonstrated in the past that it can reinvest this cash at a high rate of return on equity. Here is my first look Discounted Cash Flow calculation based on very conservative numbers. I didn't read into any reports too far so my results could be WILDLY exaggerated.
> 
> ...




It's only 12 months ago dooms slayer said the company going down the toilet,  quick cut your loss and get out 

Make sure you read their direct debit account number, when you look at their book and number of the people sign up to pay off their debt  AMAZING


----------



## tonza (7 September 2009)

Does anyone happen to know at what point a financial institution will decide to sell their bad debts? That is, how far in arrears the loan is at the time they write it off and do they then sell it off immediately?


----------



## cctrouble (8 September 2009)

You have to ask though, what's the point in buying these debts if you're not authorised to collect them? See the rather recent and interesting views of the NSW Police at:

www dot creditcorptrouble dot com


----------



## ROE (8 September 2009)

cctrouble said:


> You have to ask though, what's the point in buying these debts if you're not authorised to collect them? See the rather recent and interesting views of the NSW Police at:
> 
> www dot creditcorptrouble dot com




I think it's just compliant issue, they need a license and they probably over look on this one  

just for a brief period ...I mean those debtor can ask for money back during those period but eventually they have to pay their debt out 
so I dont see the point


----------



## ROE (8 September 2009)

tonza said:


> Does anyone happen to know at what point a financial institution will decide to sell their bad debts? That is, how far in arrears the loan is at the time they write it off and do they then sell it off immediately?




These information are pretty hard to get as debt purchase are all secretive
as multiple company are bidding for the same debt and they don't like to reveal too much information on how they each bought their debt as 
it commercial in confidence and your rival may use those information against you....

But once credit corp purchase the debt it has a useful life of 6 Years


----------



## cctrouble (9 September 2009)

ROE said:


> I think it's just compliant issue, they need a license and they probably over look on this one
> 
> just for a brief period ...I mean those debtor can ask for money back during those period but eventually they have to pay their debt out
> so I dont see the point




A brief period? CCP haven't beeen licensed for three years and still aren't. I think it calls to question the validity of any assignments of debt and what about NSW debts that are automatically extinguished after six years? That's money that they'll have to hand back and will never get back.

If you don't consider compliance a serious issue, then obviously this is the stock for you. No wonder they have a misleading conduct suit against them, they'll probably have more!


----------



## ROE (9 September 2009)

cctrouble said:


> A brief period? CCP haven't beeen licensed for three years and still aren't. I think it calls to question the validity of any assignments of debt and what about NSW debts that are automatically extinguished after six years? That's money that they'll have to hand back and will never get back.
> 
> If you don't consider compliance a serious issue, then obviously this is the stock for you. No wonder they have a misleading conduct suit against them, they'll probably have more!




I found it a bit bizzard actually, and the market doesnt seem to think its has any material impact keep
drive up the stock to record high 

The site is setup in early September by some lone person in Bentleigh, Victoria which has information pulling out here and there
but never have a direct press release link nor direct link to the source 

A dodgy scanned document, some facts pull out here and there, an email address that direct to this person and not proper authority.

I found the site to be highly suspicous and this person may have an personal vendeta against credit corp, rather than provide public with any useful resource.

Good luck with your pursue and hope you get your money back if they found to be in the wrong side of the law


----------



## cctrouble (9 September 2009)

ROE said:


> I found it a bit bizzard actually, and the market doesnt seem to think its has any material impact keep
> drive up the stock to record high
> 
> The site is setup in early September by some lone person in Bentleigh, Victoria which has information pulling out here and there
> ...




Actually I stand nothing to gain except perhaps some interest as my Credit Corp debt pre-dates the 2006 legislation. Press releases went out yesterday and are no doubt being digested by the relevant recipients who in no doubt are in discussions with CCP regarding the authenticity of the document.

The reason for publicising the information is that it may be relevant to the 52,000 people out there paying CCP payments when maybe they don't need to, but that's up to them to check.

You can look up the licence number on the NSW Police SIR website and of course, pursuant to the act, you can ask any debt collection agency for a copy of their license, and under NSW legislation, they are obliged to provide it. Ask for a copy, and I bet you won't get one.

Whether they are licensed in other states, I have no idea... the ramification of it they're not? Also I have no idea.


----------



## tonza (9 September 2009)

Can you clarify the function of Credit Corp Services Pty Ltd and was it even operating in NSW?

Without knowing anything about the act or the subsidiary in question I find it very hard to believe that one of the largest companies in the industry would neglect such a basic and fundamental requirement. 

I could not find the press release you speak of.

This smells fishy...


----------



## cctrouble (9 September 2009)

tonza said:


> Can you clarify the function of Credit Corp Services Pty Ltd and was it even operating in NSW?
> 
> Without knowing anything about the act or the subsidiary in question I find it very hard to believe that one of the largest companies in the industry would neglect such a basic and fundamental requirement.
> 
> ...






tonza said:


> Can you clarify the function of Credit Corp Services Pty Ltd and was it even operating in NSW?
> 
> Without knowing anything about the act or the subsidiary in question I find it very hard to believe that one of the largest companies in the industry would neglect such a basic and fundamental requirement.
> 
> ...




With respect, you only need to read CCP's annual report for confirmation that it wholly owns Credit Corp Services Pty Ltd, but for the avoidance of doubt, you can find a copy of the ASIC company search at http://www.creditcorptrouble.com/CCS-Search.pdf - as can be seen, the company operates out of NSW, and has done since 1998, hence why they have scurried off and obtained a licence, but sadly for CCP, it cannot be obtained retrospectively.

The press release contains personal contact information and as such, as is the usual procedure, the press release has been confined to certain members of the press.

You are quite right when you say that it is hard to believe that a company of such a size would overlook such a fundamental requirement. I think it goes to show the strength of management.

A share price that goes from over $11.00 in October 2007 to well under $1 within 12 months speaks volumes. There's a reason: http://www.imf.com.au/cases.asp?ID=70

Now that *is *fishy. Well, fishy enough for Federal Court action to be underway. Whilst any liability may be insured, it certainly makes clear how well this company is managed and how it deals with regulatory compliance. 

It's as fishy as Centro on a 40 degree day.


----------



## ROE (9 September 2009)

cctrouble said:


> With respect, you only need to read CCP's annual report for confirmation that it wholly owns Credit Corp Services Pty Ltd, but for the avoidance of doubt, you can find a copy of the ASIC company search at http://www.creditcorptrouble.com/CCS-Search.pdf - as can be seen, the company operates out of NSW, and has done since 1998, hence why they have scurried off and obtained a licence, but sadly for CCP, it cannot be obtained retrospectively.
> 
> The press release contains personal contact information and as such, as is the usual procedure, the press release has been confined to certain members of the press.
> 
> ...




If you want to know the Clime story I can tell you a lot more than what in there or read previous post on this forum .. it got nothing to do with how Credit Corp collecting money from debtor 

Certainly sound fishy to me, try to link some share holder court action
against some compliance stuff.....I think some one is in trouble with Credit Corp and go on a personal mission to create some bad press.  

plus the whole domain setup sound fishy from the beginning I know who own it, who set it up, when it was set up, the meta tag use to optimize search engine to pick up for credit corp search, how long the domain will last..all too fishy..

Maybe you can open a short position on CCP if you think it's fishy and soon go down the same path as Centro


----------



## cctrouble (9 September 2009)

ROE said:


> If you want to know the Clime story I can tell you a lot more than what in there or read previous post on this forum .. it got nothing to do with how Credit Corp collecting money from debtor
> 
> Certainly sound fishy to me, try to link some share holder court action
> against some compliance stuff.....I think some one is in trouble with Credit Corp and go on a personal mission to create some bad press.




As you quite rightly point out, the fish really starts to stink when shareholders are taking action and the NSW Police (POLICE) take such a view. It doubles the reasons to avoid this stock. 

If the sole purpose of a company is to collect debt and you are not licensed to collect the debts, then how is that different to running a company not licensed to provide financial services yet it provides financial services? 

Sounds like disaster to me. I think there are a few pairs of rose coloured glasses going around here, and it's not the people that bought at $11 that are wearing them lol.

From an investment point of view, I'd be thrilled to have bought these at 50c, but given the outstanding legal issues, I'd be thrilled to sell out at $1 - double my money!

In these troubled economic times, what happens if all of CCP's debtors say 'f*ck it let's go bankrupt'? they've paid for a debt that then perhaps is unrecoverable.

Russian rouletter. Enjoy it if you will, but I reckon you have better chances at Crowne or Star City. The problem is you don't know how crappy (or ****hot) the debts are. Until next year's annual report.


----------



## ROE (9 September 2009)

cctrouble said:


> As you quite rightly point out, the fish really starts to stink when shareholders are taking action and the NSW Police (POLICE) take such a view. It doubles the reasons to avoid this stock.
> 
> If the sole purpose of a company is to collect debt and you are not licensed to collect the debts, then how is that different to running a company not licensed to provide financial services yet it provides financial services?
> 
> ...




Isnt it part of the investment game? risk and reward? you do your research you act based on your opinion not on some rumor mill or some hot shot in the forum?

People buy and sell stock all the time...some buy 20 cents..sell at 30 cents..some buy at 20 and sell at a loss of 10 cents...
some buy at 50, sell out a $1 like you say and some buy at 50 cents
and still not sold out at $2 ..what's new?

People can borrow money from the bank and can declare themselves bankrupt too  .... or people can stop shopping at Woolies or JB hi-fi, or you rent out  a house and some dude decided he's  not paying any more rent 

I reckon with your negative view on CCP you should short them , you only long the stock when you feel future prospect are good


----------



## cctrouble (9 September 2009)

ROE said:


> Is it part of the investment game? risk and reward? you do your research you act based on your opinion not on some rumor mill or some hot shot in the forum?
> 
> People buy and sell stock all the time...some buy 20 cents..sell at 30 cents..some buy at 20 and sell at a loss of 10 cents...
> some buy at 50, sell out a $1 like you say and some buy at 50 cents
> ...




You seem to be overseeing the fact that the money borrowed from the bank, as you say, is often sold onto CCP. It's like buying a steaming pile of **** in the hope that some of it comes good.

But very few buy at $11 and sell at under $1, which of course as quite a different outcome if you're a "Mum and Dad" investor. Or any other investor it would seem. My personal view is I wouldn't buy CCP. I short term bought CER last year and got a good return, but I don't have the same feeling as CCP.


----------



## persistentone (10 September 2009)

cctrouble said:


> With respect, you only need to read CCP's annual report for confirmation that it wholly owns Credit Corp Services Pty Ltd, but for the avoidance of doubt, you can find a copy of the ASIC company search at http://www.creditcorptrouble.com/CCS-Search.pdf - as can be seen, the company operates out of NSW, and has done since 1998, hence why they have scurried off and obtained a licence, but sadly for CCP, it cannot be obtained retrospectively.
> 
> The press release contains personal contact information and as such, as is the usual procedure, the press release has been confined to certain members of the press.
> 
> ...




The Clime lawsuit is simply an investment manager trying to recover lost investment dollars.   As CreditCorp recovers value that lawsuit will probably die.   The Clime lawsuit to me reads more like a nuisance lawsuit than a substantial claim of misconduct.


----------



## persistentone (10 September 2009)

cctrouble said:


> As you quite rightly point out, the fish really starts to stink when shareholders are taking action and the NSW Police (POLICE) take such a view. It doubles the reasons to avoid this stock.
> 
> If the sole purpose of a company is to collect debt and you are not licensed to collect the debts, then how is that different to running a company not licensed to provide financial services yet it provides financial services?
> 
> ...




What percentage of their debt portfolio is specific to NSW?

Isn't the worst case here that they obtain a license for a new entity and sell the debt to that properly licensed entity?   It seems quite a stretch to say the law would prevent them seeking a remedy to any improper licensing.


----------



## persistentone (10 September 2009)

cctrouble said:


> You seem to be overseeing the fact that the money borrowed from the bank, as you say, is often sold onto CCP. It's like buying a steaming pile of **** in the hope that some of it comes good.
> 
> But very few buy at $11 and sell at under $1, which of course as quite a different outcome if you're a "Mum and Dad" investor. Or any other investor it would seem. My personal view is I wouldn't buy CCP. I short term bought CER last year and got a good return, but I don't have the same feeling as CCP.
> 
> If I was a Credit Corp debtor I'd be looking hard at http://www.creditcorptrouble.com and seeking advice as to whether I can escape an "alleged" debt, or at least reduce/eliminate the usurious interest.




One thing I will grant you is that CreditCorp should at least be making its position on this issue clear and issue a press release.


----------



## cctrouble (10 September 2009)

persistentone said:


> The Clime lawsuit is simply an investment manager trying to recover lost investment dollars.   As CreditCorp recovers value that lawsuit will probably die.   The Clime lawsuit to me reads more like a nuisance lawsuit than a substantial claim of misconduct.




Umm, according to IMF, pleadings have closed and discovery is now underway. That will probably be quite a drawn out process, but CCP considered the matter serious enough to report on in June. This is not something that is merely going to "go away". Clime will want their money, and so will IMF.


----------



## cctrouble (10 September 2009)

persistentone said:


> What percentage of their debt portfolio is specific to NSW?
> 
> Isn't the worst case here that they obtain a license for a new entity and sell the debt to that properly licensed entity?   It seems quite a stretch to say the law would prevent them seeking a remedy to any improper licensing.




In my view the worst case scenario is that all assignments of debts, judgments obtained, and interest since 1/7/06 is void.

As appears from the NSW Police correspondence, they are unable to obtain retrospective licensing, otherwise surely they would have?

Their registered office is in NSW, the majority of their call centre activity stems from NSW. The bank account and BPay facility that they invite you to pay into is in NSW. There is argument as to whether they need to be licensed both in NSW and in the state where the debtor resides, and that is being looked into, in my case, by the Victorian Ombudsman. the SA Office of Consumer and Business Affairs are also looking into the issue.

You can't just cook up a new licensed entity. If the assignee is not licensed, I think there is reasonable argument that the assignment is void and the debt disappears into thin air on the basis that CCP didn't have, by statute, good title to the assignment. It's a bit like buying a used car from an unlicensed dealer, the transaction becomes void, or voidable.


----------



## cctrouble (10 September 2009)

persistentone said:


> One thing I will grant you is that CreditCorp should at least be making its position on this issue clear and issue a press release.




Yup. And their CFO and CEO, as well as the ASX were made aware of the position on 1/9/09 and were invited to make an announcement to the market. They have chosen not to.

The folks and IMF & Clime no doubt base their claim on whether announcements to the market were made on time, if at all. It's all a bit deja vu.


----------



## ROE (10 September 2009)

cctrouble said:


> Yup. And their CFO and CEO, as well as the ASX were made aware of the position on 1/9/09 and were invited to make an announcement to the market. They have chosen not to.
> 
> The folks and IMF & Clime no doubt base their claim on whether announcements to the market were made on time, if at all. It's all a bit deja vu.




Isnt this good enough disclosure in their report??? You trying to go on a personal mission to attack CCP without much credible new information...
all those information are in the market for the past 2 years....people know it's
there..it's exist..it's factor into the price....it's a free market.....

Any how the higher the price rise the worse it get for Clime law suit  so
someone is trying to keep the price low...and the technical chart is a mighty bright for this stock 
that will draw traders in ..stock goes back to the old day..law suit throw out..you havent lost any money you just make stupid decision and sell at a loss, live and learn in free market 


On 23 December 2008 the Company advised that it had received a Statement of Claim (‘Statement’) from Clime Capital 
Limited as the representative party for a group which has entered into litigation funding agreements with IMF (Australia) 
Limited. The Statement contains allegations that from 7 November 2007 to 11 February 2008 the Company engaged in 
misleading conduct by making certain representations for which it had no reasonable basis and breached its continuous 
disclosure obligations in relation to certain matters regarding its profitability. 

The Company maintains insurance that addresses this type of claim. Notwithstanding the existence of this insurance, 
the Company is not insulated from all costs and damages which may arise from the claim. The directors have recorded 
an accrual for shareholder litigation defence costs in the FY2009 accounts. No provision has been made for any  potential award of damages against the Company.


----------



## persistentone (10 September 2009)

ROE said:


> Isnt this good enough disclosure in their report??? You trying to go on a personal mission to attack CCP without much credible new information...
> all those information are in the market for the past 2 years....people know it's
> there..it's exist..it's factor into the price....it's a free market.....
> 
> ...




Who cares about the Clime lawsuit?   That's obviously a nuisance suit.

I'm more concerned about the licensing issue and what effect could this have on revenue already received.   How much of that revenue could be claimed back by a payor since it might not have been legally collected?    That is the issue I want to see addressed by a press release.   Clime's suit is non-news.


----------



## bluecheese101 (11 September 2009)

This is just a thought, but looking at the dates that CCP was apparently unlicenced - May 2006 to July 2009 - could it be possible that the recently sold Wise McGrath could have had the licence during that time? And therefore, it would appear that there was no licence given directly to CCP? I know that was almost exactly the same period of time that CCP owned WM


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## ROE (12 September 2009)

bluecheese101 said:


> This is just a thought, but looking at the dates that CCP was apparently unlicenced - May 2006 to July 2009 - could it be possible that the recently sold Wise McGrath could have had the licence during that time? And therefore, it would appear that there was no licence given directly to CCP? I know that was almost exactly the same period of time that CCP owned WM




Ask ASX, ask CCP, ask the police, ask from a real source rather than believe in some dubious website..and if you still scare sell the stocks 
dont lose sleep over some crazy rumors.

with the knowledge I know about IT....I can point out 100 flaws in that site.
case dismissed


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## ROE (12 September 2009)

persistentone said:


> Who cares about the Clime lawsuit?   That's obviously a nuisance suit.
> 
> I'm more concerned about the licensing issue and what effect could this have on revenue already received.   How much of that revenue could be claimed back by a payor since it might not have been legally collected?    That is the issue I want to see addressed by a press release.   Clime's suit is non-news.




I want to point out the guys is a fraud, he tried to pin CCP for not releasing information about Clime lawsuit  and obviously he did know they been keeping the market fully inform about the lawsuit.

If you worry why don't you just make a few phone call, for me it's a non-event...mean while the stock keep going to the North Pole


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## bluecheese101 (12 September 2009)

ROE, i actually emailed CCP - Thomas Beregi - the other day and asked him myself about the matter  This is what he replied back to me:


Thank you for your continued interest in the company.

The material you have identified has been brought to our attention. We do not believe that any statement by the company is warranted or required in relation to the material.

We can advise you that it is our position that all companies within the Credit Corp consolidated group have been appropriately licensed for the activities they have undertaken and continue to undertake. Further, we are not aware of any enforcement action in relation to licensing by any regulator against a group company.

I hope that your concerns have been allayed.

Regards

Thomas Beregi
Chief Executive Officer


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## persistentone (30 September 2009)

Is there any news for CreditCorp associated with today's share price rise?   I didn't see any ASX release.


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## skyQuake (30 September 2009)

persistentone said:


> Is there any news for CreditCorp associated with today's share price rise?   I didn't see any ASX release.




Solid breakout above the $2 area, been there for ages nowww. Just might fill the gap aboveeeeeeeeeeeeeeee


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## ROE (30 September 2009)

persistentone said:


> Is there any news for CreditCorp associated with today's share price rise?   I didn't see any ASX release.




Postive Article in today AFR by Wilson HTM said Credit Corp
the best in the business, the most efficient and make lot of money 
and they say it's still under value


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## tonza (1 October 2009)

CCP has had a good breakout recently to close at $2.26 today. The sellers have almost completely disappeared. Is it possible to get a copy of the AFR article online?


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## ROE (2 October 2009)

tonza said:


> CCP has had a good breakout recently to close at $2.26 today. The sellers have almost completely disappeared. Is it possible to get a copy of the AFR article online?




Here is the first half of the article, If I have time I scan for you..

"Page 32 of AFR Wednesday 30th September 2009

Title: Efficiency Pays off for Debt Buyer

Australia's largest debt buyer, Credit Corp is liked by analyst for its strong operational discipline,
so much so that they argue that the stock is undervalue despite a recent rally.

The company buys overdue personal loan and credit card debt from lenders and collect these, profiting
the difference in price.

At its results in August management said it would buy more debt ledgers after extending
its 120 million coporate debt facility until mid 2012.

Debt collector fare best in a stable economic condition, when house hold debts are high
but unemployment is not an issue.

while many companies cut dividend this reporting season
Credit Corp maintained its final dividend at 2 cents after it lift ned underlying profit by 30 percent
to $10.7 million for the year to June 30.

The solid performance was attributed to more efficient debt collection methods and the company gave profit guidance of $11 million to $13 million for coming year. It forecast earning per share of 25 to 29 cents plus a dividend of 5 to 6 cents per share."


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## persistentone (2 October 2009)

ROE said:


> Here is the first half of the article, If I have time I scan for you..
> 
> "Page 32 of AFR Wednesday 30th September 2009
> 
> ...




That article sounds low on analysis and heavy on ramping.   They don't even identify the analyst by name, or make any attempt to summarize the consensus rating or estimates.

And it looks like it worked!


----------



## persistentone (2 October 2009)

What do others make of the fact that Fisher Funds has been actively selling its holdings into the current CCP rally?    They sold 450K shares across dates August 4, August 14, Sept 8, and Sep 30.

What is the best source to find out the total holdings of each major institutional holder?


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## bigdog (2 October 2009)

persistentone said:


> What is the best source to find out the total holdings of each major institutional holder?




http://www.creditcorp.com.au/irm/Company/ShowPage.aspx?CPID=1071

SHAREHOLDING
*The following details of shareholders of Credit Corp Group Limited have been taken from the Share Register on 31 August 2008.*
Group_____#SH_ Shares_ Tot%
(1–1,000) - 1,466 828,910 1.89%
(1,001–5,000) - 1,441 3,814,460 8.72%
(5,001–10,000) - 388 3,095,776 7.07%
(10,001–100,000) - 378 11,086,335 25.33%
(100,001 and over) - 51 24,942,490 56.99%
Total shareholders 3,724 Tot Shares 43,767,971 100.00%

*Total of top 20 largest shareholders as at 31 August 2008 19,514,400 shares 44.59% *
Name__________________ShareHeld %Issued Share 
RBC Dexia Investor Services 4,615,745 10.55%
Aust Executor Trustees NSW Ltd 2,874,631 6.57%
Veduta Estates Pty Ltd 2,160,014 4.94%
ANZ Nominees Limited 1,454,898 3.33%
Dixon Trust Pty Limited 1,104,738 2.52%
Invia Custodian Pty Limited 1,017,082 2.32%
Citicorp Nominees Pty Limited 638,458 1.46%
Mr Brook Anthony Adcock 605,174 1.38%
J P Morgan Nominees Australia 578,651 1.32%
Warman Investments Pty Ltd 550,000 1.26%
Merrill Lynch (Australia) 532,000 1.22%
A & K Mercantile Prov Fund 503,382 1.15%
Darrell James Pty Ltd 500,000 1.14%
Montage Capital Pty Limited 500,000 1.14%
Washington H Soul Pattinson & Company Ltd 358,039 0.82%
HGL Group Pty Ltd 341,469 0.78%
DKR Direct 334,347 0.76%
Vahivi Pty Ltd 313,139 0.72%
HSBC Custody Nominees 268,869 0.61%
Bradleys Polaris Pty Ltd 263,764 0.60%

Total ordinary shares as at 31 August 2008 43,767,971 100.00%


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## ROE (2 October 2009)

persistentone said:


> That article sounds low on analysis and heavy on ramping.   They don't even identify the analyst by name, or make any attempt to summarize the consensus rating or estimates.
> 
> And it looks like it worked!




They do if you spend $3 and buy the paper and read the whole article instead of half article.. 

They not only name 1 but 3 names from three different firms 

If you care enough you can source the information you need


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## persistentone (2 October 2009)

ROE said:


> They do if you spend $3 and buy the paper and read the whole article instead of half article..
> 
> They not only name 1 but 3 names from three different firms
> 
> If you care enough you can source the information you need




I tried to sign up for afr a week ago and unfortunately I am in US and my credit card company refused to run a charge in Australia because of problems they have had there with theft.   I do plan on getting the subscription as soon as I get a new card.


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## ROE (5 October 2009)

Here is the CCP Article, it's a B**tch to scan as it's a thin article going down
the side of a page so I have to split into 2 to fit my scanner...here is page 1


----------



## ROE (5 October 2009)

Here is the CCP Article, it's a B**tch to scan as it's a thin article going down
the side of a page so I have to split into 2 to fit my scanner...

And Page 2  I have to repeat the wording to meet minimum 100 char stuff


----------



## bigdog (12 November 2009)

*The CP share price has been improving; check the chart below!!*

http://www.thesheet.com/nl06_news_selected.php?act=2&selkey=9134

*Credit Corp back buying debt *
11 November 2009 6:41am
Consumer credit arrears in the banking system may be improving, but one of the specialist debt collectors helping out banks expects its profits to rise by more than forecast this year as it picks up more work.

Credit Corp CEO Thomas Beregi told its annual meeting yesterday that the firm upgraded its forecast for EBITDA for the 2010 financial year to between $94 million and $98 million, and a rise of $6 million at each end of the range.

Beregi said the firm was expecting a net profit of between $12 million to $13.5 million, up by $1 million at the low end and by half a million at the high end.

In remarks published through the ASX, Beregi, and the company’s chair, Donald McLay, emphasised the unused borrowing capacity available and their plans to work more closely with bank and other customers to pursue overdue debts.

The plan to buy more debt outright (rather than collecting it on an agency basis) was one reason for Credit Corp’s intention to pay out only 20 per cent of profits as dividends, McLay said.

“We believe that we are operating in a relatively positive [debt] purchasing environment and we are deliberately preserving our capital to facilitate increased purchasing at favourable returns,” McLay said.

7695


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## ROE (12 November 2009)

It has unrival business model, I said they are the pioneer in developing these models

and pioneer stands to benefit long before their rivals catch up 

they had a bad run in recent history due to stupid decision made by management but 
not because of their business model

they got rid of those incompetent management now the business model shine

If the fundamental business model is intact you be crazy not to buy the stock when it trades at historic low


----------



## ROE (11 January 2010)

Came back from a couple of weeks holiday and this stock about to break the $3 mark Nice start to a new year  ...more to come if they continue to deliver increase EPS


----------



## McCoy Pauley (12 January 2010)

Interesting article about CCP and a competitor, Baycorp Advantage, in the weekend's AFR.  Worth reading if you're a holder.

Disc - no shares owned but on watchlist.


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## ROE (18 January 2010)

mark_au said:


> Just had a look at my CCP purchase, haven't had them as long as i thought ;:eek
> i got most of them in 06 at $8.00 Ahahahaha..
> I think , i'll be waiting a while to recoup LOL




Hope you still got this stock and look like you may not wait long for the share price to go back up...it's been going gangsbuster since Late last year and 
close 9.6% up for the day when the market just manage to step over the green line..


----------



## bigdog (16 February 2010)

ASX ANN
16/02/2010   *Half Yearly Report and Accounts *
http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01037764

*For the six months ended 31 December 2009*

*Financial results*
Revenue from ordinary activities(1) UP 14% to $89.2 m
EBITDA(1) UP 18% to $58.6 m
Impairment of available-for-sale financial assets(1) UP 23% to $42.5 m
Profit before tax(1) UP 14% to $10.2 m
Profit after tax UP 11% to $6.9 m

(1) Prior corresponding period comparatives are for continuing operations

*Dividends  * 
31 Dec 09     Interim dividend 3 cents (100% franked) 
31 Dec 08 Interim dividend 2 cents (100% franked)

*Earnings per share *
Dec 2009 Basic earnings per share 15.62 cents (UP 10%) (2008 14.22 cents)
Dec 2009 Diluted earnings per share 15.53 cents (UP 9%) (2008 14.22 cents)
Dec 2009 NTA per share 183.3 cents (2008 151.97 cents)

9245


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## ROE (16 February 2010)

another decent result as expected, and 50% rise in dividend payout while most big boys having a hard time maintain dividend


----------



## tonza (17 March 2010)

Hello all,

CCP share price has been on a steady decline recently. 

On the 16th-Feb the company gave a FY10 earnings guidance with the half yearly report of $12.5-14 million NPAT/28-30 cents EPS. A solid result.

Since then the SP has declined from roughly $3 to $2.60. (It was already tracking a downward path from an earlier high of $3.39.)

Interesting to note that in the month since the half yearly report the chairman and a director have purchased (indirectly) a combined $731,234.26 worth of stock. 

Recent pullback a buying opportunity?


----------



## ROE (17 March 2010)

A bit of price manupilation going on if you look at the course of trades
plenty of 1-20 shares parcel sell at cheap price to systematicly drive price down to hopefully trigger some sort of sell off 

chairmain probably bought more than half of the volume each day so it's cheap for him I guess.

Regarding to whether you buy them or not it's should be your call


----------



## Tukker (18 March 2010)

tonza said:


> Hello all,
> 
> CCP share price has been on a steady decline recently.
> 
> ...





Didn't they just finish paying a dividend on the 10th?  If thats so then your probably seeing the sell-off from dividend traders who have banked recent capital gains and taken their dividend check home. I don't have access to their chart atm, but will post one when i get home.


----------



## tonza (19 March 2010)

This is absolutely frustrating. SP has dropped from a high of $3.39 in Jan to sub-$2.39 today. 

I absolutely love the value in this company however I am highly suspicious of this price move. Hopefully there hasn't been a leak of sensitive information.

P/E: 9ish
P/Free cash flow: 1ish
Dividends should continue to rise.

All known information points towards a solid company. I will be awaiting indications of a bottom and increasing my position.


----------



## freddy2 (19 March 2010)

tonza said:


> This is absolutely frustrating. SP has dropped from a high of $3.39 in Jan to sub-$2.39 today.
> 
> I absolutely love the value in this company however I am highly suspicious of this price move. Hopefully there hasn't been a leak of sensitive information.
> 
> ...




Just had a look at the interim report. I'm not sure that a traditional free cash flow measure (ie operating cash flow - maintenance cap ex) should be used for a company like this as investing and financing cash flows might be better classified in a different way. For example I would classify "Purchase of available-for-sale financial assets" under operating cash flows as this is equivalent to inventory.


----------



## ROE (19 March 2010)

One thing I can tell you is that, a company cant lies for long with dividend payout. 

you need cash to pay out dividends and if your financial position is shaky banks will force you to stop paying dividend, like SIP recently  

for all the problem CCP gone through it has not stop paying dividend EVER  it's maybe lower

but maintaing dividend in the face of share price plummet and lot of speculation would certainly give
you credibility of their business model and ability to generate cash even with a huge stuff up here and there.


I'm sensing it wont be long before they start paying much higher dividends and I'm sure that what's the chairman is buying for, you dont rack up a few million shares to make a quick bucks but to get reliable stream of dividend 


and dont get mad get even if you are strong with your conviction you know what to do when the price is low


----------



## tonza (19 March 2010)

The ASX must have heard my cries. Announcement today of an ASX price query directed to CCP. Management stated that they are not aware of any reason for the move and reiterated their earnings guidance.


----------



## Tukker (20 March 2010)

ROE said:


> One thing I can tell you is that, a company cant lies for long with dividend payout.
> 
> you need cash to pay out dividends and if your financial position is shaky banks will force you to stop paying dividend, like SIP recently
> 
> ...




I 100% agree.

Chart shows a good rebound with better than average volume, I would be tempted to get on board if next week holds support over  $2.50.  

Good projected figures, will see how she sails.


----------



## JTLP (20 March 2010)

Tukker said:


> I 100% agree.
> 
> Chart shows a good rebound with better than average volume, I would be tempted to get on board if next week holds support over  $2.50.
> 
> Good projected figures, will see how she sails.




I just went back to the start of December '09 to scan through the Director's interest notices. Mr Donald McLay has been the main buyer with all but 1 up to the 16th of March. And himself and Torres Industries have purchased well over 250,000 (probably more but I lost count) dollars worth of CCP. I think you are on to something here ROE...he has purchased right up to the $3 dollar mark and to be honest it doesn't look like he is stopping any time soon.

Might have been a bit of a missed opportunity not getting onto CCP at 2.31 on friday. Time will tell...


----------



## JTLP (24 March 2010)

JTLP said:


> I just went back to the start of December '09 to scan through the Director's interest notices. Mr Donald McLay has been the main buyer with all but 1 up to the 16th of March. And himself and Torres Industries have purchased well over 250,000 (probably more but I lost count) dollars worth of CCP. I think you are on to something here ROE...he has purchased right up to the $3 dollar mark and to be honest it doesn't look like he is stopping any time soon.
> 
> Might have been a bit of a missed opportunity not getting onto CCP at 2.31 on friday. Time will tell...




Closed a few cents down today to finish at 2.77. Was cursing my life away when I didn't even have a sniff in the dollar range...I thought it had run away then!

Dividend payable on the 1st of April...when's the record date? Today? Would make sense with a 3 cent drop. 

Might chuck an order in soon...even if it is to be a part of this Director's wild purchasing spree!


----------



## JTLP (25 March 2010)

Just couldn't resist a bite today with another Change In Directors Interest by the same culprit...this time $75,000 worth to Torres Industries. He has gone gangbusters buying up big...surely he can't be that crazy...:


----------



## JTLP (1 April 2010)

Don McLay - 4th June 09 - 16,690 @ 1.91 = $31,877.90
Robert Shaw - 22nd May 09 - 895 @ 1.91 = $1709.45
Simon Calleia 27th May 09 - 204 @ 1.91 = $389.64
Simon Calleia 14th Oct 09 - 400,000 disposed @ 2.55 = $ -1,020,000
Don McLay - 27 Nov 09 - 53,762 - $131,682.83
Don McLay - 30 Nov 09 - 31,238 - $76,718.36
Don McLay - 7th, 8th, 10th Dec 09 - 38,755 - $96,853.75
Don McLay - 16th & 17th Feb 10 - 120,000 - $358,305.84
Simon Calleia - 16th Feb 10 - 50,000 @ 3.00 = $150,000
Don McLay - 26th Feb 10 - 31,221 - $86,587.99
Don McLay - 5th & 8th March 10 - 17,227 - $49,710.43
Don McLay - 9th & 10th March 10 - 10,000 - $28,300
Don McLay - 12th, 15th & 16th March 10 - 21,552 - $58,330.40
Don McLay - 19th March 10 - 31,559 - $75,754.30
Eric Dodd - 19th March 10 - 10,000 - $25,000
Don McLay - 29th & 31st March 10 - 18,977 - $50,837.90

Don Mclay & Indirect Interests (Total) = $1,044,959.70 worth of stock purchased since 4th June '09

Simon Calleia & Indirect Interests (Total) = (-)$869,910.36 disposed since 27th May '09 (when I say disposed he has acquired some in this time but his holding has been reduced by this amount)

Robert Shaw & Indirect Interests (Total) = $1,709.45 acquired since 22nd May '09

Eric Dodd & Indirect Interests (Total) = $25,000 worth of stock purchased since 19th March 10

What interests me about this is the frequency of purchases from Don McLay...right up until yesterday he has been purchasing. Wonder what the plans are for the company and why so much purchasing has occurred?


----------



## JTLP (13 April 2010)

CCP still bouncing around the 2.60 to 2.80 range. Low volumes and all that.

Does anybody know when the 2011 guidance will come out? Word around town is that the market is quite competitive due to low unemployment figures and more player's entering into the market. My take on this is that low unemployment means people just feel more secure...doesn't mean they won't spend and it certainly doesn't mean people can service their debts. I kind of look at it as a positive. More money in the market, more Mr Big Shots, more money for CCP to chase =)

Would like to see some more director purchasing though :


----------



## JTLP (16 April 2010)

The Don picks up another lazy 13k (5,000 shares) and roughly holds about 5% of the company now. Nice.

Closed at 2.70. Nothing to report...


----------



## JTLP (21 May 2010)

Good old CCP.

They have increased there forecasts for the year. Just lovely. 

http://asx.com.au/asxpdf/20100520/pdf/31qfpcn3zlg9s0.pdf

Within the doc they have increased their EPS to 29-31. Other highlights within are the BIG reduction of Net Bank Debt; down 41%

http://asx.com.au/asxpdf/20100520/pdf/31qfpm9srb01f2.pdf

Market presentation in the 2nd link

All smiles


----------



## ROE (17 August 2010)

What more can a man ask for in this business 

Dividend increase 100% ..they predicted another stalla year FY11
and if things go according to plan an extra 100-150% dividend increase again next year.

didn't I tell you when I spot the chairman load up..I suspect he's in for the dividend yield at super cheap price....

Now this stock can get from the bottum of the draw to the middle pile 
when it reach the top my work is done and look for another doom and gloom stock.

Anyone who bought in at the same time as me sit on double digit dividend ...


----------



## Knobby22 (17 August 2010)

Yes, a very good result. Love the dividend.

Another rerating surely will occur over time.


----------



## ROE (9 November 2010)

continue breaking 52 week high, yesterday and then again today

expect much more from this kick ass business, enjoy your coffee and come back in 12 months for more goodies announcement....

debt are way down, profit up, dividend up, cash are good, collection way up that only lead to a very merry next year


----------



## Knobby22 (9 November 2010)

Yes, a very good upgrade to earnings ... about 7%. The company sp should keep rising.


----------



## JTLP (9 November 2010)

Knobby22 said:


> Yes, a very good upgrade to earnings ... about 7%. The company sp should keep rising.




Don't forget that they intend to double FY2010's dividend of 8c to 16c. Still makes for a half decent yield at todays close.


----------



## ROE (17 December 2010)

This baby continue to break new high weeks after weeks

shooting past $4.00 and keep marching upward ..

Most fund managers love this stock now...all of them rate this stock as 

outperformer in 2011 ....not long ago they kick and abandon this puppy

Uncle Warren timeless wisdom work to perfection

"Be Greedy When Others Are Fearful" one day I shall be fearful when other are greedy


----------



## ROE (14 February 2011)

Off she goes to $4.72 another historic high since the fall from grace

tomorrow the result will come out....


----------



## Knobby22 (14 February 2011)

Been a lovely run, starting to get more reasonaby priced though.

May think of selling if it rises above $5.00.

Depends a bit on the results of course.


----------



## VSntchr (14 February 2011)

Knobby22 said:


> Been a lovely run, starting to get more reasonaby priced though.
> 
> May think of selling if it rises above $5.00.
> 
> Depends a bit on the results of course.




Yeah, Im hoping they will achieve the upper end of their guidance..this would certainly justify the recent price run...loving the progress, my only regret is not putting a larger chunk into this baby!


----------



## Knobby22 (14 February 2011)

VSntchr said:


> Yeah, Im hoping they will achieve the upper end of their guidance..this would certainly justify the recent price run...loving the progress, my only regret is not putting a larger chunk into this baby!




Jin the club:


----------



## ROE (14 February 2011)

Knobby22 said:


> Jin the club:




I got around 20,000 shares, and it went down all the way to 40 cents 
I hold tight a bit of a test for my conviction 

a bit scare, a bit of hard work now start to bear fruit

if they stick to 17c dividend payout, I get 20% dividend each year I hold.
no need to sell and get the big Capital tax gain bill..


----------



## ROE (15 February 2011)

what a performance check out the result 

Incredible, hoping to get my first 10 baggers with CCP

exceeding all expectation....back to former glory folks


----------



## ROE (15 February 2011)

53 per cent growth in Net Profit After Tax (NPAT) over the prior corresponding period (pcp) 

233 per cent increase in the interim dividend to 10 cents per share 

26 per cent increase in first half Purchased Debt Ledger (PDL) acquisitions 

Entry into new purchasing segments 

Successful opening of an offshore collection operation 

Solid pipeline of PDL acquisitions for the 2011 financial year


----------



## Knobby22 (15 February 2011)

ROE said:


> 53 per cent growth in Net Profit After Tax (NPAT) over the prior corresponding period (pcp)
> 
> 233 per cent increase in the interim dividend to 10 cents per share
> 
> ...




Very impressive, more than I expected. Will hang in there a bit longer and see how they go.


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## VSntchr (15 February 2011)

Wonderful HY result..my only concern as I began reading the report was that this company is going so well and growing so fast..so how long before this company reaches saturation point. Well this concern was addressed when they detailed their expansion plans


----------



## ROE (15 February 2011)

More on their Global expansion and world domination 

http://www.brr.com.au/event/frame/75228


----------



## drworm (21 February 2011)

I re-joined the club 3-4 months ago, and glad to be back!

Funnily enough the thing that impressed me most about the latest HY report is the suspension of the DRP policy. To me it is a definitive declaration of confidence in their cashflows and ability to easily fund future increases in ledger purchases. 

The approaching of the all-time EPS record is also quite good. And all that - aggressive amortisation rates, soon to be debt-free, great cashflow - fluff too


----------



## ChaoSI (21 February 2011)

been watching this go up for a while.... thinking about entering... but i'm not sure if it's finished with the up... coming in at its 3 year high still less than half of it's 5 yr high tho so possible catch up?

what did u guys enter this one at (if you don't mind me asking).


----------



## Knobby22 (21 February 2011)

ChaoSI said:


> been watching this go up for a while.... thinking about entering... but i'm not sure if it's finished with the up... coming in at its 3 year high still less than half of it's 5 yr high tho so possible catch up?
> 
> what did u guys enter this one at (if you don't mind me asking).




$3.16. You should try not to let the past effect your decision. (easy to say, hard to do)


----------



## ChaoSI (21 February 2011)

Knobby22 said:


> $3.16. You should try not to let the past effect your decision. (easy to say, hard to do)




hmmm v hard...
atm i'm checking the charts... really nice stable lines for the last 6 months ... regardless of the time frame looked at (5 days, 1 3 and 6 months)
this is just a newbie looking at it. Would that be a correct thing to say ?


----------



## VSntchr (21 February 2011)

ChaoSI said:


> hmmm v hard...
> atm i'm checking the charts... really nice stable lines for the last 6 months ... regardless of the time frame looked at (5 days, 1 3 and 6 months)
> this is just a newbie looking at it. Would that be a correct thing to say ?




You seem to be applying a very basic form of what is known as 'technical analysis'.

I have very limited knowledge of this so I won't comment on this, but I can tell you that on the fundamental side - CCP is looking very good.

The result reporting results show that the company is performing well and the future prospects look very bright


----------



## Knobby22 (21 February 2011)

VSntchr said:


> You seem to be applying a very basic form of what is known as 'technical analysis'.
> 
> I have very limited knowledge of this so I won't comment on this, but I can tell you that on the fundamental side - CCP is looking very good.
> 
> The result reporting results show that the company is performing well and the future prospects look very bright




I bought on Fundamentals also.
You seem to have lucked out and picked a fundamental investor favourite.
Seriously though, as you say, if you are basing it on trend investing, it has to be a buy!
Technically, very much in a trend. Just place a stop if you are worried.


----------



## ChaoSI (1 March 2011)

when does this company post dividends?


----------



## ROE (1 March 2011)

ChaoSI said:


> when does this company post dividends?




Dividend 10c for this half get paid on 1 April , Ex-dividend 11 March


----------



## vesti (1 March 2011)

Using closing equity, I get a $5.10 value and using slightly higher EPS above there 2011 estimate higher end EPS by CCP, $5.57 in 2011 & $6.40 2012 if they deliver on the earings???


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## VSntchr (1 April 2011)

Dividend paid today. Love these business that under promise and over perform!


----------



## ROE (1 April 2011)

Clean break $6 close at $6.05 too easy
thank you Mr Market

maybe thinking of letting go when it hits 10 baggers  
only 6 baggers and all this time got 1/2 bagger in dividend alone whohoo...


----------



## VSntchr (1 April 2011)

I really really don't want to sell this one. Their prospects are so good IMO...I think their is massive growth in the industry...(witness TGA buying into the debt collection market recently)...
But they are starting to get a little more expensive...heres hoping they top pre-GFC high


----------



## ROE (1 April 2011)

VSntchr said:


> I really really don't want to sell this one. Their prospects are so good IMO...I think their is massive growth in the industry...(witness TGA buying into the debt collection market recently)...
> But they are starting to get a little more expensive...heres hoping they top pre-GFC high




I rarely sell good business, justing tinkering
Dividend on this one a few K every 6 months isn't bad so there is no need to sell.
This decade time for CCV TGA and CCP to shine and retire


----------



## michael_selway (2 April 2011)

ROE said:


> I rarely sell good business, justing tinkering
> Dividend on this one a few K every 6 months isn't bad so there is no need to sell.
> This decade time for CCV TGA and CCP to shine and retire




Will these companies crash when there is another GFC? thanks MS


----------



## tonza (2 April 2011)

michael_selway said:


> Will these companies crash when there is another GFC? thanks MS




Nah, it'll be all smooth sailing...

When do you think I should start selling down my holdings?


----------



## ROE (2 April 2011)

michael_selway said:


> Will these companies crash when there is another GFC? thanks MS




Strong fundamental companies with price crash is a value investor dream


----------



## Knobby22 (17 May 2011)

Gee, dropping like a rock.

Got a bit high too quickly, methinks plus having a director sell didn't look good.
I wonder if there is some bad news coming up.


----------



## VSntchr (17 May 2011)

Knobby22 said:


> Gee, dropping like a rock.
> 
> Got a bit high too quickly, methinks plus having a director sell didn't look good.
> I wonder if there is some bad news coming up.




It seems any stock with directors selling is getting punished this year...


----------



## JTLP (17 May 2011)

I don't there is anything fundamentally wrong with CCP - it's had a fair run from $2.50 odd to $6.00 - people want to take profit no doubt.

Also add that Mutual Investors (I think that's the name) had been selling down for quite a while - probably have fallen below the 5% requirement and are just dropping them off - hopefully the selling will dry up when they're done and CCP can stabilize.

Volumes have been quite high though but CCP (post crash) has been suprising to the upside so I wouldn't worry too much.

I might buy more if it gets to low $4's...


----------



## drworm (17 May 2011)

I topped some on my holdings today. 

In a market without many reasonably priced quality companies about, CCP sticks out like a sore thumb.

If the past few years are anything to go by - it's run up to the annual report will likely see a profit upgrade and the final result hitting at the top of its guidance.

EPS 41-46c for FY11 is actually very conservative based on its half yearly results with plenty of room to move.

Happy investing!


----------



## VSntchr (19 May 2011)

drworm said:


> I topped some on my holdings today.
> 
> In a market without many reasonably priced quality companies about, CCP sticks out like a sore thumb.
> 
> ...




Good timing! Upgrade 2 days later!
Caution in the fact that competitors are increasing their prices for ledgers. Lets hope that CCP can show its competitive advantage by outlasting the competition...time will soon tell over the next year or so..
I do note that last year they had an initial PDL guidance of 40-60..and its now ended up being closer to 90....so take from that what you will..

Anyway I took the chance to top up this week also...one of the better sectors to be in at the moment and still some value around...


----------



## JTLP (19 May 2011)

JTLP said:


> I don't there is anything fundamentally wrong with CCP - it's had a fair run from $2.50 odd to $6.00 - people want to take profit no doubt.
> 
> Also add that Mutual Investors (I think that's the name) had been selling down for quite a while - probably have fallen below the 5% requirement and are just dropping them off - hopefully the selling will dry up when they're done and CCP can stabilize.
> 
> ...




Another guidance update - all pointing to the plus side.

Things are looking lovely - makes me more than certain it was Mutual Investors shedding the last of their holding over the past few weeks - no explanation for the fast drop from $6.20 to $4.70...

Oh well i'm happy - and did anybody see the reduction in debt? I smell more juicy dividends...


----------



## VSntchr (27 May 2011)

I think I may have found a home for my jbhifi buy back proceedings...


----------



## Risk Chaser (27 May 2011)

my limit order got triggered at $4.95, first time buyer. I hope she's a keeper


----------



## McLovin (3 June 2011)

Anyone know why this stock is getting pounded today? Down over 8% as I write. At these prices I'm about to add to my holding in CCP.


----------



## VSntchr (3 June 2011)

McLovin said:


> Anyone know why this stock is getting pounded today? Down over 8% as I write. At these prices I'm about to add to my holding in CCP.




Hello McLoving, any chance of superbad 2 anytime soon? haha

CCP is pretty illiquid, so the fact that a major shareholder has been dumping their stock is possibly a part of an explanation.

Another thought is something to do with the credit reform laws? I know that CCV specifically has been copping a hiding lately for this reason..


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## McLovin (4 June 2011)

VSntchr said:


> Hello McLoving, any chance of superbad 2 anytime soon? haha




Patience young Skywalker, good things come to those who wait! : McLovin was the first thing that came to my head when I was signing up!



VSntchr said:


> CCP is pretty illiquid, so the fact that a major shareholder has been dumping their stock is possibly a part of an explanation.
> 
> Another thought is something to do with the credit reform laws? I know that CCV specifically has been copping a hiding lately for this reason..




The selldown by a large shareholder is what I suspected, and loaded up this afternoon. 

Wrt to the credit reform green paper, I think that effects CCV to a much greater extent because it is trying to stamp out a lot of the usury lending that "Pay day" lenders tend to be involved in. I haven't seen much about how it will effect PDL companies like CCP.


----------



## Intrinsic Value (7 June 2011)

I plugged in my valuation for Credit Corp over the weekend and came up with 5.70.

At todays price of 4.40 it is looking not too bad.


----------



## McLovin (7 June 2011)

Intrinsic Value said:


> I plugged in my valuation for Credit Corp over the weekend and came up with 5.70.
> 
> At todays price of 4.40 it is looking not too bad.




I have them at a similar price for this year rising to around $6.50 next year.


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## ROE (12 June 2011)

got some more at $4.30 during the panic week just before Uncle Don load up some more  ..expecting 30c dividend in the near future  ...maybe 18 months down the road


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## ROE (12 June 2011)

Risk Chaser said:


> my limit order got triggered at $4.95, first time buyer. I hope she's a keeper




Don't worry too much about Mr Market share price offering each day
at $4.95 not as cheap as $4.30 I got but still cheap in my book and give you
a margin of safety...

CCP since the debacle some years ago has always been under promise and over deliver

When they tell you things are looking bad or debt purchase getting more competitive 
wait for the sell down then load up 

if things are bad for CCP it will be worse for their rival because CCP has a magic weapon, CCP has technology advantages which they invest a bit of money into.

Just like Dominos and their use of technology with their online ordering
this set them apart from everyone else .... Dominos online sale now account for 
25-30% of their sale... I dont think I use the Phone again ordering Pizza 

Some day their rivals may catch up or they may not but until then these technology will keep them ahead of their rival.


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## Math (6 August 2011)

Under $4 and down 30% since May, how are those valuations looking now ?


----------



## robusta (6 August 2011)

Math said:


> Under $4 and down 30% since May, how are those valuations looking now ?




Bloody excellent, I think I need to buy some more.


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## ROE (13 August 2011)

Math said:


> Under $4 and down 30% since May, how are those valuations looking now ?




At this price you pricing a growing business with no grow or a decline earning for a year or two 

A business with high return on capital employed and generous cash flow.

This business is at its best shape since listing with little debt and crazy free cash flow.

I did buy more at $3.85 or so .... 

There are many stocks I regularly topped up as long as it is cheap in my book 
and I collect future years dividend stream....this get crazily good during  a crash
when people either bailed out or don't want to join in or waiting for something 

I just folow George Clason wisdoms
save part of your earning and invest wisely in all cycles, the cheaper the market
the better the future dividend stream

like someone used to say you make the most money in the bear market you just don't know it at the time 
I didnt know it when I bought CCP at $1


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## Intrinsic Value (14 August 2011)

ROE said:


> At this price you pricing a growing business with no grow or a decline earning for a year or two
> 
> A business with high return on capital employed and generous cash flow.
> 
> ...




Excellent value at current prices.

Hard to see how you can go wrong with CCP under 4 dollars.


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## ROE (15 August 2011)

Result out tomorrow keep an eye out for it folks

share price close today indicates it should be a nice one.

I expect more profit and more dividend.

they suspend the DRP so they got too much cash ...please hand it back to me via more dividend so
I can allocate it some where else


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## robusta (15 August 2011)

ROE said:


> Result out tomorrow keep an eye out for it folks
> 
> share price close today indicates it should be a nice one.
> 
> ...




I will be reding with interest ROE, if current trends continue the cash flow should be something special.


----------



## ROE (16 August 2011)

Result out

Upper end and slightly exceed guidance
more debt pay down with increase PDL purchase (very nice)
ROE back to awesome level 22% 

2012 Guidance 
-------------
increase dividend payout
More growth 

Like I said you paying a growing business that the market price for no growth or worse.


----------



## VSntchr (16 August 2011)

ROE said:


> Result out
> 
> Upper end and slightly exceed guidance
> more debt pay down with increase PDL purchase (very nice)
> ...




Agree ROE, very happy with this one. Dividends paid in 2011 ($6.7m) have tripled that paid in 2010 ($2.2m).


----------



## craft (16 August 2011)

Who can explain note 11 from the financials to me?  Althought it's not really clear to me, I know it is very important because although Interest revenue from purchased debt ledgers is only reported as one line it is actually made up from receipts from collections less amortisation of purchased debt ledgers based on assumptions disclosed in note 1 & 11.

The assumptions dictate the amortisation amount which dictates the reported profit. This company has more scope than most to convert capital to current yield which can make the figures look really good for a for years but eventually needs to be reconciling by a doozy of a year.  Sort of sounds familiar doesn’t it.

I’m not saying it’s happening again, I just wondering how people are ensuring themselves that it’s not. 

On the bright side lower debt for this company is a huge positive in case there ever is another need to reconcile the accounting amortisation rate with a higher actual rate of impairment.


----------



## McLovin (16 August 2011)

craft said:


> Who can explain note 11 from the financials to me?  Althought it's not really clear to me, I know it is very important because although Interest revenue from purchased debt ledgers is only reported as one line it is actually made up from receipts from collections less amortisation of purchased debt ledgers based on assumptions disclosed in note 1 & 11.
> 
> The assumptions dictate the amortisation amount which dictates the reported profit. This company has more scope than most to convert capital to current yield which can make the figures look really good for a for years but eventually needs to be reconciling by a doozy of a year.  Sort of sounds familiar doesn’t it.
> 
> ...




There PDL's seem to be more conservatively valued now than previously. Thier actual amortisation as a % of PDL revenue has risen to ~46% from ~40% in 2007. Further, looking at the cashflow statement and balance sheet, in 2007 they had PDL's valued on their books at $184m which were generating OpCF of $76mln, today they have $146m in PDL's generating OpCF of $119m. Of course there will always be some black box about how management value these assets, but to me it seems as though they have become far more conservative. 

I also took heart in the fact that management is has made statements to the effect that they will not overpay for PDL's in the face of increasing competition.

Solid result, IMO.


----------



## craft (16 August 2011)

Hi McLovin

Thanks

I feel timing of PDL purchases and maturity profiles make the OCF/PDL asset and amortisation/revenue rough guides at best.  This has got to be one of the hardest businesses for an outsider to make judgements on the quality of the result.  I wonder if their problems of the past were because insiders couldn’t even get a handle on actual impairment rates.




McLovin said:


> I also took heart in the fact that management is has made statements to the effect that they will not overpay for PDL's in the face of increasing competition.
> 
> Solid result, IMO.




Shouldn't this objective be a given? But like investing it's only in hindsight that you will truely know if you have overpaid.

I think holding this one demands some level of TA as an additional layer of risk management to counter the unavoidable lack of transparency in the FA. Unless of course, you trust management implicitly. It's not one that I would be willing to fade the chartist's on.


----------



## McLovin (16 August 2011)

craft said:


> Hi McLovin
> 
> Thanks
> 
> I feel timing of PDL purchases and maturity profiles make the OCF/PDL asset and amortisation/revenue rough guides at best.  This has got to be one of the hardest businesses for an outsider to make judgements on the quality of the result.  I wonder if their problems of the past were because insiders couldn’t even get a handle on actual impairment rates.




You're correct, they will, because of the nature of the businees, be rough guides. However, if you look at the 5 year history of the company, this has been improving since bottoming out in 08. Also, the problems in the past were very much related to people management. They took on a lot of PDL's which they probably overpaid for (and used debt) and then took on a lot of new staff to collect the outstanding debts at the same time they lost a lot of existing staff members so the "business knowledge" was lost. It can take 12 months to train someone to work efficiently at debt collection and because they had high staff turnover their average amount collected/FTE fell substantially; in 2008 it got as low as $179/hour/employee and probably averaged around $200, this year it has been averaging $238/employee/hour.

There is a 5 year summary on p74 of the annual report, which shows the trend nicely. Growing OCF, more conservative PDL valuation (with the usual caveats discussed), falling debt, and a nice portion of their revenue coming off payment arrangement customers.






craft said:


> Shouldn't this objective be a given? But like investing it's only in hindsight that you will truely know if you have overpaid.




Often it is a given, which is when accidents happen. Gauging management conservativeness is never an easy thing to do though.



craft said:


> I think holding this one demands some level of TA as an additional layer of risk management to counter the unavoidable lack of transparency in the FA. Unless of course, you trust management implicitly. It's not one that I would be willing to fade the chartist's on.




I prefer to use a margin of safety as my additional layer, but if TA works for you then go for it.


----------



## ROE (16 August 2011)

McLovin said:


> Often it is a given, which is when accidents happen. Gauging management conservativeness is never an easy thing to do though.




I tend to favor management that has their skins in the game and I 
100% have faith in them to do the right thing... 

With Uncle Don and Uncle Simon hold 2 million shares a piece it's not small amount of
money so I'm sure they want to grow their share portfolio like any of us.

Other Uncle I like that has skin in the game is Uncle Graham from Flight Centre
Uncle Con from Centrebet , Uncle Peter and various directors from Cash Converter...

I buy up all these business where I identified management has big stake in the business and their fortune depend on the success of the business...


----------



## McLovin (17 August 2011)

ROE said:


> I tend to favor management that has their skins in the game and I
> 100% have faith in them to do the right thing...
> 
> With Uncle Don and Uncle Simon hold 2 million shares a piece it's not small amount of
> ...




Good point, with two caveats: Firstly, their skin I hope hasn't come at the expense of other shareholders through OTT ESOPs; secondly, I like when a good bit of their own wealth is tied up in the company, not just a good bit of money. Case in point a friend the other day was telling me how James Packer must really believe in online retailing after he paid $60m for 40% of Catch of the Day, of course when you have a few billion lying around $60m is not really having skin in the game.

ROE, you have a lot of uncles!


----------



## VSntchr (18 August 2011)

Heard on YMYC last night that Mutual may still be selling down there stake in CCP and also TGA. Without any notices to the stock exchange within the last few months I don't know how true this is though. At last call they still had over a 5% interest from memory.


----------



## VSntchr (8 November 2011)

CCP continues to underpromise and overdeliver..AGM presentation today has upwardly revised FY12 NPAT to $23 -23m.

Looks like the Philipino expansion has become profitable.

PDL purchases have slightly exceeded the very conservative estimate so that is also good news for owners.


----------



## ROE (8 November 2011)

This stock now is officially a serial under promise over deliver....
another earning upgrade...debt down to a pocket change of 7m, debt free by
the end of the year ... Crazy cash flow...

increase dividend this year?

I have lot of Uncles but I only chose good Uncle, others are not 
worthy to be my Uncle, they are bad uncles they rip you off


----------



## drworm (8 November 2011)

Yep definitely serial under promiser. In fact I was waiting for a profit upgrade this morning... And they didn't disappoint. 

Note... The forecast is still on the conservative side. If they keep up the rate theyve started the first 4 months (~30% earnings growth over previous year), we're looking down the barrel at EPS 60c for the full year. 

Would not bat an eyelid if we see another upgrade between now and the annual report


----------



## robusta (8 November 2011)

If this profit growth can continue the dividend yield should be something special in the future.


----------



## skc (8 November 2011)

skc said:


> Yes CCP is pretty much the same thing with PE~8.3 on forecast EPS ~46-51c (~+10%) and dividend yield ~5% (7.1% gross). CLH has slightly lower PE, similar growth, and higher divdiend. While these numbers are slightly in favour of CLH they are close enough.
> 
> But the intangible is that CCP announced their forecast back in early Aug when the market was not in the mood to mark them up. Whereas CLH announced the update today that might garner some positive attention and demand in a more positive market.
> 
> Imgaine like 2 people stranded on an island with similar intelligence and physical attributes. One fired his flare 2 months ago on a cloudy day in non-fishing season. The other fired his flare today on a clear night during fishing season (so a fleet of fishing boats might be around the bay - yes it's a very elaborate analogy). So I pick that there's a higher chance that the second person will be rescued first.




Lol so much for my flare analogy. CCP brings out a big one he had hiding in the backpack.

Bought some today at $3.94. Didn't think I was going to get hit but someone wanted out today for some reason. Just going to trail this one technically and see how it goes... first target ~$5 which is still single digit PE.


----------



## drworm (8 November 2011)

skc,

Although from the bottom line numbers CCP and CLH are vaguely comparable, true beauty is more than skin deep. One is a stunner and the other I can't vouch for.

Check out how much ledger assets are on the books and how much collections each company generate every year. You might find a difference that would suggest that something's not quite right with one of them...

Debt is another indicator... CCP has repaid over $100m with no cap raising over the last few years.

I've made a more detailed post on my personal blog. Won't post here, but will share via PM if interested.


----------



## VSntchr (25 November 2011)

WOW CCP has been copping a beating lately. It is now well below the price it was at before the profit upgrade...

Even if they dont grow over the next 3 years..the price is still enticing.

As such ive topped up at $3.56...

Lets enjoy the ride!!


----------



## skc (25 November 2011)

VSntchr said:


> WOW CCP has been copping a beating lately. It is now well below the price it was at before the profit upgrade...
> 
> Even if they dont grow over the next 3 years..the price is still enticing.
> 
> ...




Sold my shares at ~$4.15 average. Got back in the other day at $3.80 with ~half the position.

The chart printed a lower high with the spike from last week and now broken below support at $3.80. Next stop potentially ~$3.3.

While that's what the chart says it's difficult to understand why someone chooses to sell now as opposed to last week.


----------



## VSntchr (30 November 2011)

Well my $3.56 entry turned out perfect.
I am very overweight CCP so am conisdering selling the most recent purchase and swapping into TGA..which I currently have no exposure to...and like CCP  has fallen back to "pre-upgrade" levels...


----------



## VSntchr (2 February 2012)

Another upgrade.
Divvy increase..let the good times roll


----------



## ROE (2 February 2012)

I added 4000 more to my super account at $3.70 -
Now sit back and eat fully frank dividend..

I was expecting 15c this half - it wasnt to be

I expect 15c dividend comes second half.....

Debt once again down ...debt free soon wohooo


----------



## VSntchr (2 February 2012)

ROE said:


> I added 4000 more to my super account at $3.70 -
> Now sit back and eat fully frank dividend..
> 
> I was expecting 15c this half - it wasnt to be
> ...




Yeah they are certainly on track to have minimal debt by EOFY12. Think of the divvy increase once they dont have to pay ~$10m debt + interest each half!!!


----------



## VSntchr (16 May 2012)

Announcement out today which has refined profit estimates for FY12. Previously 24-27. NOW 26-27.

PDL activity has also been strong which is a good signal for FY13.


----------



## ROE (1 August 2012)

breaking all time high after the crash some year ago
if it exceed fore cast comes Tuesday look out ...$8 isnt out of the question short term

and this stock need to start commanding some premium, debt free by then, Return on Equity better than our big 4
and growing at a decent pace.

here hoping for 15c final dividend annoucement on Tuesday


----------



## ROE (7 August 2012)

and thankyou for 16c dividend ...i was expecting 15
I am excited with the dividend 
and debt free, expect more divdend in coming years
and suspension of DRP still in place so very strong cash flow more
than enough to buy more debt and pay dividend


----------



## ROE (5 October 2012)

Their annual report makes a good read, this business could be the next Aussies to go Global like 
their big brother before it ... CSL,BXB,CPU etc... 

doesn't hurt too directors keep buying on market


----------



## Knobby22 (6 October 2012)

Yes, bit riskier also though. Glad I bought in though, they have done well.


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## VSntchr (6 October 2012)

ROE said:


> Their annual report makes a good read, this business could be the next Aussies to go Global like
> their big brother before it ... CSL,BXB,CPU etc...
> 
> doesn't hurt too directors keep buying on market




I read this yesterday and was going to post something similar. They have emphasised numerous times that they are being very cautious and patient with the expansion, which is very important so we don't see a repeat of last time! The future looks very good for CCP and hence its the biggest weight in my portfolio.

Now that debt is paid off they will be able to allocate more capital to these expansion plans if needed, and of course, if not...divvy's are going to be increasing at a very nice rate...


----------



## ROE (6 October 2012)

Knobby22 said:


> Yes, bit riskier also though. Glad I bought in though, they have done well.




I cant see much down side to their global expansion...
They are debt free, they have bucket load of cash flow that they suspend DRP for last 18 months...

They bed down the Australian Operation to perfection before they go on expansion which is very assuring
they emphasis this on numerous occasion.

Look like their long term plan, bed down Australian operation to generate reliable cash flow, use that to slowly expand and if it doesn't work out so what lose a bit of cash but the upside is huge.

Their Philippine workforce going along nicely and expanding and productivity level at a decent rate.

The one time stuffed up before GFC is well and truly behind them, the CEO and people involve in that circus is
out of the equation...new management is an exceptional lot....and their financial strength is way way better than 4 years ago...

there is nothing not to like, this prove to be a cheap stock again in 5 years if thing go the way they going...
500m - 1B market cap is all within their reach.....this is one business where buy and hold will paid off on a massive scale both on dividend and capital appreciation...


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## CanOz (6 October 2012)

Consolidation on top of recent highs....Triangle...target around 8 ish...


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## VSntchr (19 October 2012)

Finally CCP has broken the $7 level for the first time since its dramatic fall.

This along with pretty much everything else I watch with a decent yield has been going gangbusters.


----------



## ENP (29 October 2012)

Reading the 2012 annual report, the pessimistic view management had of a equally impressive result next year and the forecast of how much wholesale debt they will purchase doesn't seem to match up with the stock price going up near 20% since then. 

Anyone care to explain?

I bought these at $6 back in May after their market update presentation and so far have been confused with the activity. Seems like the management and investors have differing opinions on the future of the company over the next year or so. 

Long term I like the idea of them expanding overseas, I think they are onto a real winner there.


----------



## VSntchr (29 October 2012)

ENP said:


> Reading the 2012 annual report, the pessimistic view management had of a equally impressive result next year and the forecast of how much wholesale debt they will purchase doesn't seem to match up with the stock price going up near 20% since then.
> 
> Anyone care to explain?
> 
> ...




In my opinion, the rise has been on the back of people chasing yield.

CCP pays a good divv...and after doing a bit of digging you will find that CCP has been aggressively paying down debt. Now that all that is paid off, they have scope to increase the divvy to an even better yield...


----------



## ROE (7 November 2012)

all eyes on AGM tomorrow for operational update.... last 2 days rally seems like good news abound..


----------



## RottenValue (7 November 2012)

Very happy with this one - deciding to make the plunge at $6 back in August when hard to see how it couldn't generate 15% pa has resulted in a 30% SP increase in less than 3 months.

Looking forward to what they have to say - hopefully continue to talk down future prospects and out deliver


----------



## ROE (31 January 2013)

another half another 54% increase in dividend and I still have every single shares 9 baggers and still going strong

this is a dividend galore stock not to mentioned capital appreciation


----------



## Knobby22 (31 January 2013)

Excellent result. I am going to buy some more.


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## VSntchr (31 January 2013)

Another very pleasing result and yes the divvy is increasing AGAIN!!!


A few concerns tho.

1) The US operations are lagging expectations. 

2) They seem concerned about the lack of credit growth.

3) Collection efficiency is dropping (and fast!).....



Still happy to hold and collect the awesome divvy but will have a watchful eye on any updates.
This is over 2.5 bagger for me now


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## McLovin (1 February 2013)

Good result. I like the fact they've been able to grow their PDL acquisitions despite the PDL market being tough. They have a good system in place for both purchasing and collections. The USA will take some time to hit its stride but that's the same as expanding into any new market.



> 3) Collection efficiency is dropping (and fast!).....




They've been sending a fair bit of telephone bill work to the Phillippines. They have much lower collection value which is why the hourly rate of those guys is falling.


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## ROE (16 May 2013)

onward and upward ...update going to meet upper end of the guidance .... 
Sir Can I have another dividend increase please


----------



## Ves (16 May 2013)

ROE said:


> onward and upward ...update going to meet upper end of the guidance ....
> Sir Can I have another dividend increase please



20 bagger soon isn't it?


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## VSntchr (16 May 2013)

ROE said:


> onward and upward ...update going to meet upper end of the guidance ....
> Sir Can I have another dividend increase please




and in my view we are still decently undervalued...but I could be biased


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## ROE (30 May 2013)

Got some people attention 

http://www.theage.com.au/business/collect-on-this-promising-mid-cap-20130529-2nbdc.html


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## ROE (4 June 2013)

http://www.brrmedia.com/event/112268/thomas-beregi-ceo

Awesome CEO, Honest, down to earth, we need more of these 

I like it when CEO doesnt talk about stock price, just carry on with they pay to do...
Let us investor talk about share price


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## ROE (5 August 2013)

Tomorrow...
If all things goes well and an update on the oversea operations and consumer lending business firing on all cylinder 
we have the catalyst for pushing above $10


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## ROE (6 August 2013)

And there we have it ..great result and always cautious management 
Double digit dividend grow again compared to last year final -


----------



## VSntchr (5 October 2013)

ROE said:


> I'm out of cash and CCP is my biggest purchase ever.
> 
> This will make me or break me that how confident I am....
> 
> It wont bankrupt me it just take away all my profit




Well 5 years on and you can consider yourself MADE!

Well done ROE.


----------



## ROE (5 October 2013)

VSntchr said:


> Well 5 years on and you can consider yourself MADE!
> 
> Well done ROE.




Yeah made a bit of money out of it 

I have it both personal and SMSF, SMSF I picked them up at $3.87

I sold 30% of the personal holding at $10.28 before it run close to $11  
Just got a dividend cheque too, best cheque every 6 months 

I think dividend payment will return all my initial invested capital after this year...

Hope AHZ will give me the same deal in a decade..


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## pixel (5 October 2013)

They must be doing something right: from $3.70 to $10.70 in less than 2 years.





After the last retracement, they're now back to where they traded early this year. 
Will this be support for the next leg up? If it is, I'd like to get some as well.


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## Hodgie (11 October 2013)

I had been looking to enter this company the last few months, the price decline over the last 2 weeks offered a good opportunity to begin to accumulate.


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## VSntchr (13 November 2013)

Looks like the recent update by CCP was foreseen by the market with the price coming down from ~$11 down to mid $9's and hovering around this area.

After reading all the information and taking some time to fully digest it - I have come to the conclusion that my faith in management continues to strengthen. Unlike some other boards which have been extremely misleading of late (which I have unfortunately been involved in: CIX, CDA etc) I am of the opinion that the leaders of CCP remain very conservative in their approach to informing the market. The market appears to dislike the fact that despite the increases in PDL's, the NPAT guidance has not increased and the outlook for further PDL's appears grim in the near future. Combine this with a delay in the growth of the US expansion and many investors have reason to dull their expectations for the companies growth prospects.

However, as a long term holder I am more interested in how management is dealing with the situation. I think their careful approach and long term view will ensure that the owners of CCP will reap the benefits once the cycle begins to turn. 
Competition has been fierce for the last 2 years, yet CCP has still been performing ahead of their own expectations all the while they are planting seeds for the future with the low-risk approach to overseas expansion by utilising FCF and restricting heavy investment until performance is proven.

I continue to hold as a core stock in my portfolio.


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## ROE (13 November 2013)

+1 

Lending will play an important role down the track but it will takes time.

I think CCP will price risk way better than anyone else as they has everything about their customers on file
customer credit history and repayment ability, how often they can make payment etc...


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## tinhat (28 November 2013)

I've never owned this stock before but I bought today at 9.01. Had an order at that price in for a couple of weeks now. Happy to catch a falling knife and dollar cost average in.


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## ENP (17 January 2014)

Has been hovering around the $9 mark for some time now.

Will be interesting what the late Jan/early Feb trading announcement brings. 

I recently bought more at $8.60 in December. EPS growth of 15-20% plus and high ROE when the company was valued at only 12-13 P/E was a good reason to top up my holdings. I originally bought at $6.00 almost 2 years ago.


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## pixel (18 January 2014)

ENP said:


> Has been hovering around the $9 mark for some time now.
> 
> Will be interesting what the late Jan/early Feb trading announcement brings.
> 
> I recently bought more at $8.60 in December. EPS growth of 15-20% plus and high ROE when the company was valued at only 12-13 P/E was a good reason to top up my holdings. I originally bought at $6.00 almost 2 years ago.




Lower Highs, Lower Lows... I don't hold at this time. 
I'd set an alert at the 0% level, let's say $8.20; another one at $9.70 to catch the recovery case.


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## ROE (30 January 2014)

Good set of result out, 20c dividend
Steady as she goes in choppy market.

Revise profit up ... I like


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## VSntchr (30 January 2014)

ROE said:


> Good set of result out, 20c dividend
> Steady as she goes in choppy market.
> 
> Revise profit up ... I like




I liked this result too.

Looks like they have started to take on debt again - this will have to be watched closely. 

US operations don't look satisfactory at present but if we are to believe management (and thus far they have been conservative in all communications over the last 4 years), they will likely be in a strong position within 1 - 2 years when smaller PDL buyers are forced out and PDL sellers re-enter the market.

Another area of concern (other than the re-introduction of debt), is that have now started to pay more for PDL's in return for the ability to collect on them quicker. I will have to take the magnifying glass over the report to try and see if this is purely because of operational efficiency improvements or if it is due to the company purchasing debt from telecommunication providers and other less profitable, but quicker to recover sectors.

They are clearly in a period of substantial investment with the US operations, the lending operations and substantial PDL purchases....yet earnings continue to increase, this is very pleasing.


----------



## ROE (30 January 2014)

Pleasing is their lending division start generating profit soon so another avenue for more profit grow, 

this lending market is just as big as the debt market and they don't fall into the category of CCV and face scrutiny by governments and social workers.


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## craft (30 January 2014)

VSntchr said:


> yet earnings continue to increase, this is very pleasing.




Earnings are a residual accounting number after the amortisation of the PDL’s.

The earnings figure are correct only too the extent the written down values of the PDL’s is correct.

Is the PDL valuation on the balance sheet correct? How do you know? 

Just playing devil’s advocate – I too like CCP but don’t own at the moment. It’s one stock I won’t fight the market on because I just can’t get enough visibility on what the debt ledgers are actually worth and in turn the robustness of the reported earnings figures.


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## VSntchr (30 January 2014)

craft said:


> Earnings are a residual accounting number after the amortisation of the PDL’s.
> 
> The earnings figure are correct only too the extent the written down values of the PDL’s is correct.




Good point. 
I am thinking that the best way to track this and trigger an early warning signal would be Amortisation % of carrying PDL value?

Assuming the investor approaches CCP as a long term investment, it is the cumulative and long term free cash flows that matter, so year to year the FCF figure doesn't mean as much - but if the amortisation % was to vary this could be a sign that something is being manipulated.

If the % was to increase, that would be bad as it would show that the company is purchasing a higher proportion of debts that it cannot recover (or in another way: they are overpaying). 
If the % was to decrease, that could suggest two things. The first is that the company is pricing very effectively and is becoming more successful at collecting. OR it could be the accountants artificially inflating earnings by restricting the amortisation.

If you take a view over a number of years, it becomes more difficult for the numbers to be manipulated without it becoming more and more obvious to the investor.

The above questions and possible scenario's  highlight that you have a very valid point and I'm glad you have given me something to consider and keep in mind.


EDIT:
After re-reading I wanted to add that even if the numbers are not being _manipulated_, it is the skill and conservatism/optimism of those doing the accounting that need to be relied upon.


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## VSntchr (6 February 2014)

Not sure how much value there is in the below, but it has given me a better understanding of the business and a few metrics to keep an eye on.

First up is the amortisation compared to the carrying value of the PDL portfolio. 



Here is a chart showing PDL purchases compared to the amortised value on an annual basis since 04.



For a different perspective, this chart shows the actual collections CCP has made against the amortisation.



The message I have taken away from the above charts is that pre 2008 Credit Corp was far too agressive and too ambitious with their low amortisation rates. It would appear that management has found a comfortable level of amortisation of PDL's as it has flattened out after skyrocketing post the CCP collapse in 2008. 
Crafts point above still holds though, and we won't know for sure if these levels are sustainable until we get more data in future reporting periods.




Finally, here is a chart which shows that CCP has been increasing recurring revenue since 2007 by increasing the proportion of customers on payment plans.


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## craft (6 February 2014)

Awesome VS

I feel humbled that somebody has responded to a point I made, so positively and comprehensively.

I hope the understanding you gained from the exercise serves you well.

Cheers


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## piggybank (6 February 2014)

Very Impressive VSntchr. What is the name of the program please?

Cheers
PB


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## VSntchr (18 March 2014)

piggybank said:


> Very Impressive VSntchr. What is the name of the program please?
> 
> Cheers
> PB




Sorry PB just saw your post, it's actually just done through Excel - nothing fancy here.


----------



## VSntchr (18 March 2014)

Time for another post on CCP.

CCP has been a good example of a company with a fluctuating capital structure. The debt ratio reached levels of ~80% over the 2007 era which was largely due to share price capitulation, but not to distract from the fact of having ~$130m of debt which would be over 30% at todays market value of equity. 

The company took only 4 years to aggressively pay down the debt out of strong FCF to be debt free by 2011. 

What's interesting is that the last couple of financials show that CCP has started to take on debt again. I think that the company planned this quite well - pay down debt and decrease default risk while consolidating internal operations and improving business performance. Now that they have finished that phase, they are moving onto their expansion plans both with the lending foray and the US debt collections. 

It is also interesting that the market (perhaps correctly, or perhaps not) is in my opinion pricing CCP as ex-growth.
Taking the FY15 (conservative) expected free cash flow of $22.6m, the market value of the company of $447 and imputing for the growth rate (assuming that CCP is now in stable growth) provides a market expected growth rate of 4.68%.

So if the assumption is made that CCP is a mature company, perhaps the optimal capital structure can be looked at. 
The table below shows the value of CCP at varying debt ratio's. Note that I have capitalised operating leases (hence the debt is a little higher than the reported figure). Also, the value is calculated based on the imputed growth rate of 4.68% that the market is implying by pricing CCP at $8.80.


*Blue shows current structure, green shows optimal.

So if CCP is a mature company and can no longer achieve excess returns the table above shows that keeping in-line with the economy and tweaking the capital structure a bit may deliver decent value to shareholders for years to come.

Additionally, if CCP is on point with their new investments - then earnings should be able to outgrow the imputed 4.68% with relative ease over the next decade.


----------



## Ves (18 March 2014)

VSntchr said:


> Taking the FY15 (conservative) expected free cash flow of $22.6m, the market value of the company of $447 and imputing for the growth rate (assuming that CCP is now in stable growth) provides a market expected growth rate of 4.68%.



Hey VS

Which formula are you using to reverse engineer the calculations to work out the implied growth rate?   I haven't really explored these sort of calculations myself - so would be interesting to know.


----------



## VSntchr (19 March 2014)

Ves said:


> Hey VS
> 
> Which formula are you using to reverse engineer the calculations to work out the implied growth rate?   I haven't really explored these sort of calculations myself - so would be interesting to know.




Hey Ves,
The formula is just: Firm Value = FCFF(1+g) / (Cost Capital - g)


It's my first time delving down this road, so could be some mistakes in what I've done...
I've found it useful to compare what the market is "implying" in the way it prices the stock, in comparison to what my own expectations are.
This allows me to research further and search for risks, headwinds, tailwinds, opportunities etc that I might be missing if my expectations are wildly different.


----------



## Ves (19 March 2014)

VSntchr said:


> Hey Ves,
> The formula is just: Firm Value = FCFF(1+g) / (Cost Capital - g)



Thanks for that.   I did some math  (beware!) Does that mean you are implying that the market is using a cost of capital of 8.78%?

EV on the figures quoted in your post was MC of $447m + $130m debt = $577m.

$22.6m (1+4.68%) / (8.78% - 4.68%) = $577m

Cost of capital of 8.78% seems a bit low? Is there any reason for this?

By the way,   I enjoyed reading your analysis on the capital structure, it was quite illuminating.  Just trying to tidy the calculations up in my head.


----------



## VSntchr (19 March 2014)

Ves said:


> Thanks for that.   I did some math  (beware!) Does that mean you are implying that the market is using a cost of capital of 8.78%?
> 
> EV on the figures quoted in your post was MC of $447m + $130m debt = $577m.
> 
> ...




$447m was total firm value, I should have been a bit more clear. MC of $406m plus $41m  debt (I already found my first error - the calcs above I have $33m for current debt). Shouldn't affect result much though  (the extra $8m is just the operating leases, which many wouldn't capitalise anyway).

I just re-checked with the cost of capital put in from the table (9.89%) and it gives EV at $452. 
Even so, I agree with you that this is a pretty low cost of capital, but generally most of the companies I follow have pretty low WACC's at the moment. Which I believe is a function of the following: 10yr gov bond at ~4.15%, most have a beta below 1.30 and aren't operating in risky places like Africa etc..

What worries me, as I am quite inexperienced in watching valuations over a *LONG* period of time, is how badly stock prices are going to be dragged down once 10yr bond rates start going back up. At 4.15% we aren't in _too _bad of a situation, but the USA @ <3% will be impacted pretty heavily - I guess it depends on how long it occurs over and what happens to earnings in the meantime. Either way, its a tailwind to keep in mind.

There was a paper circulating a few weeks back where buffet talks about interest rates and their effects on stock prices, it was pretty fascinating at how profound the affects can be over decade-plus long periods.


----------



## Ves (19 March 2014)

VSntchr said:


> $447m was total firm value, I should have been a bit more clear. MC of $406m plus $41m  debt (I already found my first error - the calcs above I have $33m for current debt). Shouldn't affect result much though  (the extra $8m is just the operating leases, which many wouldn't capitalise anyway).
> 
> I just re-checked with the cost of capital put in from the table (9.89%) and it gives EV at $452.



Makes more sense now.  Looks like I was partly at fault too.  I misread the top part of your post re the debt of $130m as being current debt,  rather than the debt they had in 2007.

If you assume a growth rate of 4.68%,  FCFF of $22.6m and an EV of $447,  then the market is implying a cost of capital of 9.97%  (which is reasonable enough and close to your calculations).

This sort of calculation could give you a perspective to think about in terms of how the market as a whole may be pricing the business, but as you said you couldn't rely on it in a meaningful way.    The assumptions within  (especially  in the fact that perpetual growth rate of 4.68%  appears to be well above Australia's GDP trend growth) are not really that conservative!  The implication being that a company cannot grow at a rate higher than the economy into perpetuity,  otherwise it would become that economy eventually!



> Even so, I agree with you that this is a pretty low cost of capital, but generally most of the companies I follow have pretty low WACC's at the moment. Which I believe is a function of the following: 10yr gov bond at ~4.15%, most have a beta below 1.30 and aren't operating in risky places like Africa etc..
> 
> What worries me, as I am quite inexperienced in watching valuations over a *LONG* period of time, is how badly stock prices are going to be dragged down once 10yr bond rates start going back up. At 4.15% we aren't in _too _bad of a situation, but the USA @ <3% will be impacted pretty heavily - I guess it depends on how long it occurs over and what happens to earnings in the meantime. Either way, its a tailwind to keep in mind.
> 
> There was a paper circulating a few weeks back where buffet talks about interest rates and their effects on stock prices, it was pretty fascinating at how profound the affects can be over decade-plus long periods.



Indeed,   low interest rates drag down the risk-free rate, and in the view of a lot of market participants this has the effect of reduced WACC.

I personally don't use WACC in my valuations  (I have a hurdle rate that the investment either meets or I stay in cash) so my bottom line calculations are not directly impacted by the effect  (however,  the market's pricing of risk at any one time may impact on my range of opportunities to invest).  My hurdle rate is about 15%pa before tax,  so usually it is in excess of the WACC in most climates, especially now.

Damodaran had a discussion last year about low interest rates currently and their impact on long-term valuations as well.   It was on his blog Musings on Markets,  just flick through the archives if you're interested.


----------



## odds-on (19 March 2014)

VSntchr said:


> It's my first time delving down this road, so could be some mistakes in what I've done...
> I've found it useful to compare what the market is "implying" in the way it prices the stock, in comparison to what my own expectations are.
> This allows me to research further and search for risks, headwinds, tailwinds, opportunities etc that I might be missing if my expectations are wildly different.




Hi VS,

Good work on this thread, very interesting reading. 

I read a book a few years back and think you might find it useful. http://expectationsinvesting.com/ 

Do you recognise the authors?

Cheers


----------



## ROE (20 March 2014)

Uncle Don put out close to a cool 900K to buy more CCP shares
I decided to do the same, load up another 4000 shares 

it is undervalue by my metrics I need an insider confirmation


----------



## VSntchr (20 March 2014)

Ves said:


> This sort of calculation could give you a perspective to think about in terms of how the market as a whole may be pricing the business, but as you said you couldn't rely on it in a meaningful way.    The assumptions within  (especially  in the fact that perpetual growth rate of 4.68%  appears to be well above Australia's GDP trend growth) are not really that conservative!  The implication being that a company cannot grow at a rate higher than the economy into perpetuity,  otherwise it would become that economy eventually!
> 
> 
> Indeed,   low interest rates drag down the risk-free rate, and in the view of a lot of market participants this has the effect of reduced WACC.
> ...




What sort of rate do you think is fair to assume for long term stable growth (making the assumption that the company exists forever)? I would think nominal GDP growth would be the best estimate, which again is close to the risk free rate. Sectors come into play here, as you would have more confidence of a company in healthcare growing at something equal to or even slightly above the GDP figure, while something such as print media would have no hope of even coming close to matching the economy. Even with something like healthcare its hard to assume that it can grow over the average as we are talking FOREVER, which you pointed out above. 

I think your 15% hurdle rate approach is very sound and something I should be incorporating more into my work.



odds-on said:


> Hi VS,
> 
> Good work on this thread, very interesting reading.
> 
> ...



Nope, never heard of the authors before, I'll add it to my reading list - which is currently becoming quite daunting  thanks!


----------



## Ves (20 March 2014)

VSntchr said:


> What sort of rate do you think is fair to assume for long term stable growth (making the assumption that the company exists forever?



I don't really answer this question in my valuations because I take a fairly conservative approach to anything outside of my initial cash flow forecast period and do not incorporate any growth into my terminal calculations at all.  If this happens, fantastic,  I will be rewarded handsomely,  but I would rather not pay for the risk.

For my terminal value calculations (which I realise are commonly expressed as a perpetuity in DCF theory) I consider the strength of the firm's competitive position and their ability to sustain it and where I think it will be at the end of my forecast period.

I weigh this up against what I believe are the net replacement cost of the firms assets (it sounds scientific,  but really it is just a judgment call and sometimes you have to rely on the balance sheet).

The terminal value falls in between a perpetuity (based on my best estimate of the firms FCFF representative of the whole economical cycle) and the net replacement cost.  The more sustainable I think the competitive advantage is,  the closer my terminal value will be to the perpetuity.

Obviously if there is no competitive advantage it is always net replacement cost of the assets for the terminal value  (or less if the firm is uneconomic,  but I don't touch those).

I think this approach really forces you to think in terms of probability (not exact science) and to form convictions on the business' competitive position  (which is the whole point for my style - ie.  hold until the business tells you not to hold).   If you are buying in order to sell to vindicate the investment then this may or may not fit your purposes,  but I treat investments as income streams in the same sense as Buffet, so works for me.


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## ROE (20 March 2014)

Ves said:


> This sort of calculation could give you a perspective to think about in terms of how the market as a whole may be pricing the business, but as you said you couldn't rely on it in a meaningful way.    The assumptions within  (especially  in the fact that perpetual growth rate of 4.68%  appears to be well above Australia's GDP trend growth) are not really that conservative!  The implication being that a company cannot grow at a rate higher than the economy into perpetuity,  otherwise it would become that economy eventually!




Indeed Company cannot grow at a faster rate than their market but CCP is no where near there.

The way I see it CCP is building itself into a diversified financial company, its root is in receivable but
its future lies in diversified financial business, all IMHO 

It already has very good data analytic system in place to calculate risk and credit worthiness it makes senses now to expand and price risk in other financial area

The business it get into, the directors it appoint to the board seem it is heading that way.

and the Chairman aren't laying out 900K to buy shares just to see it sits still....it is a massive vote of confident for the future of the business


----------



## ROE (2 July 2014)

end of FY ... no nasty surprise so I assume it meeting guidance so little down side from here.

question now how much dividend and its comments on future earning comes confession time.


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## VSntchr (2 July 2014)

ROE said:


> end of FY ... no nasty surprise so I assume it meeting guidance so little down side from here.
> 
> question now how much dividend and its comments on future earning comes confession time.




ROE, what are your thoughts on the US operations?
The comment in a recent presentation about management taking on inferior returns due to competitive pricing was potentially a concern; it doesn't model the way they have treated PDL acquisitions here in AUS which is to only acquire if it meets strict hurdle rates. Granted that the US is a different market and this decision could be influenced by marketing decisions to gain market share and keep a presence on various purchsing boards. The legislative environment is also changing rapidly over there too, which differentiates their market to ours in terms of the approach required.

Just wondering if you have any thoughts additional or in contradiction to the above?

As always, looking forward to the FY accounts


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## ROE (2 July 2014)

VSntchr said:


> ROE, what are your thoughts on the US operations?
> The comment in a recent presentation about management taking on inferior returns due to competitive pricing was potentially a concern; it doesn't model the way they have treated PDL acquisitions here in AUS which is to only acquire if it meets strict hurdle rates. Granted that the US is a different market and this decision could be influenced by marketing decisions to gain market share and keep a presence on various purchsing boards. The legislative environment is also changing rapidly over there too, which differentiates their market to ours in terms of the approach required.
> 
> Just wondering if you have any thoughts additional or in contradiction to the above?
> ...




you spot on there, too early to know at this stage have to see what the return are ...

hard to beat Aussie ROE/ROC  in other markets ...it is not just CCP all other business
face it when they go oversea, Australia is a unique market, once you got a foothold and a decent model, you tend to command very good return on capital....

if Woolies and WES venture outside I can be 99% certain they can't command the same margin and/or return on capital.

I will be happy if they can command lower return outside, as long as it not shabby lower like
7-8% or something but 11% plus is ok with me and hope to yield a bit more over time...


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## ROE (5 August 2014)

Another good set of result ...dividend up again and still growing


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## VSntchr (5 August 2014)

ROE said:


> Another good set of result ...dividend up again and still growing




Yeah its more of the same for CCP.

Looks like they are confident in lending taking over the growth for the next few periods while PDL market continues to remain highly priced.
Good to see they now will have a multi-pronged approach in the coming years (importantly with equal target returns) and don't rely on one segment alone.


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## McLovin (5 August 2014)

It looks as though they're finding the US much more challenging than they thought. Good result, nice to see they move to diversify the revenue base has paid off.


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## ROE (5 August 2014)

Their interest cost is around 5% and they getting 15-20% on the lending size 
they need a massive default or massive compression in margin to see this side of the business
going bad any time soon.

it be interesting come FY16 and 17 when lending book get into hundred of millions


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## VSntchr (5 August 2014)

McLovin said:


> It looks as though they're finding the US much more challenging than they thought.




I agree. I was a little worried the first time that they mentioned accepting compromised returns in the US while waiting for market conditions to reverse. They have not accepted compromised returns in AUS and prefer to face reducing PDL purchases. I have so far given them the benefit of the doubt...

I think it's clear that the reason they are prepared to stick around with the US is because they see the potential in the market and think that the short term pain is worth it...I will be watching closely to see if it doesn't turn into a case of saving face....but for now I think it's far from that.


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## Huskar (5 August 2014)

I'm not so sure it was that good a result: ballooning of receivables as compared with revenue growth as well as lower depreciation charge and higher debt indicate to me some cosmetics and therefore concern with topline figures. Perhaps this is just an aberration due to the "one-off opportunities" in the first half (which were not named as such in HY report - only in FY) and figures will normalise but something to be on the lookout for.

Just being devil's advocate because this is a company I very much admire.


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## McLovin (5 August 2014)

Huskar said:


> I'm not so sure it was that good a result: ballooning of receivables as compared with revenue growth as well as lower depreciation charge and higher debt indicate to me some cosmetics and therefore concern with topline figures. Perhaps this is just an aberration due to the "one-off opportunities" in the first half (which were not named as such in HY report - only in FY) and figures will normalise but something to be on the lookout for.
> 
> Just being devil's advocate because this is a company I very much admire.




The increase in receiveables is a function of the growing loan portfolio...loans outstanding = receiveables.


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## VSntchr (5 August 2014)

One thing I did notice was "other expenses" doubled YoY, unfortunately we don't get a detailed breakdown of that account...but it might explain the reason why FCF wasn't a bit better in H2 considering that H2 funding on lending and PDL combined was ~13m less than H1.


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## ROE (5 August 2014)

VSntchr said:


> One thing I did notice was "other expenses" doubled YoY, unfortunately we don't get a detailed breakdown of that account...but it might explain the reason why FCF wasn't a bit better in H2 considering that H2 funding on lending and PDL combined was ~13m less than H1.




probably the US operation rapid expansion which they put on a ice until better time
which I think a sensible thing to do ... cant get the required return ice it for a while.


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## Ves (5 August 2014)

VSntchr said:


> One thing I did notice was "other expenses" doubled YoY, unfortunately we don't get a detailed breakdown of that account...but it might explain the reason why FCF wasn't a bit better in H2 considering that H2 funding on lending and PDL combined was ~13m less than H1.



Isn't most of it from the increase in provisioning for estimated bad debts due to the bigger receivables balance at 30 June 2014?   Check note 9 I think it is...  fairly sure the movement in that provision is expensed  (ie.  CR provision DR expenses).

I don't follow this company very closely...  btw.


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## VSntchr (5 August 2014)

Ves said:


> Isn't most of it from the increase in provisioning for estimated bad debts due to the bigger receivables balance at 30 June 2014?   Check note 9 I think it is...  fairly sure the movement in that provision is expensed  (ie.  CR provision DR expenses).
> 
> I don't follow this company very closely...  btw.




Thanks Ves, I was pretty sure that the change in provisions were the cause but couldn't find the link.


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## VSntchr (6 August 2014)

Couldn't ask for more in a CEO IMO, Thomas is a very composed operator..and as ROE has pointed out - exactly what CCP needed in the turnaround process that has been continuing ever since previous management went a bit crazy. 
Conservative, yet calculated risk taking has led to profitable growth. 
http://www.brrmedia.com/event/124470?popup=true&unique_ts=1407301924


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## ROE (6 August 2014)

VSntchr said:


> http://www.brrmedia.com/event/124470?popup=true&unique_ts=1407301924




Great presentation, as honest as you can get


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## craft (6 August 2014)

VSntchr said:


> Yeah its more of the same for CCP.
> 
> Looks like they are confident in lending taking over the growth for the next few periods while PDL market continues to remain highly priced.
> Good to see they now will have a multi-pronged approach in the coming years (importantly with equal target returns) and don't rely on one segment alone.




Been having a bit of a look with an eye to buying back in (would have to be a swap with TGA for me)

Looks like I get to play devils advocate again.

I'm a bit dubious on the same target return claim - yes they may target 16-18% on each pdl purchase but the collections / PDL  balance is closer to 2 then 1 which increases the per-annum return.

Gross loan book of 63.6 Million and provisioning of 16.6 Million. Either they are over provisioned or they are going after the lowest of the subprime market – Not hard to increase the loan book to that market, can they get it back?

Writing off 26% as bad loans means they have to make an interest rate of 42-44%pa on the good ones to get the net 16-18% they are after.


Has anybody got their head around the quality of the loans they are making and whether the provisioning is likely to be accurate?  The numbers are not going to reveal the picture until the loan book growth slows by which time the goose will be cooked one way or the other.


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## ROE (6 August 2014)

craft said:


> Been having a bit of a look with an eye to buying back in (would have to be a swap with TGA for me)
> 
> Looks like I get to play devils advocate again.
> 
> ...




Over provision in early days just to be sure .. I think they will revise the provision down as the loan book mature and they get some concrete number out of it 

http://www.moneystart.com.au/   5K loan over 36 months cost you 23-24% pa which is comparable to credit card cash advance ... Most other lender cant do it at this rate for credit impair customers but credit corp can

credit corp has  Proprietary analytic system that took years to develop and collect data and this is their competitive advantage, no one has this system like they do, so they can accurately price PDL and credit impair customers with high level of accuracy.

How do they manage to know when to buy and what to buy at what price to get incredible high return when most cant? .... the answers lies in their analytic system.

a case of boring business using technology to their advantage pretty much like DMP uses technology for online ordering and social media interface


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## VSntchr (7 August 2014)

craft said:


> Has anybody got their head around the quality of the loans they are making and whether the provisioning is likely to be accurate?  The numbers are not going to reveal the picture until the loan book growth slows by which time the goose will be cooked one way or the other.




As usual, I am probably placing too much trust in the hands of managers - but the presentation spoke about rapidly initiating the loan book for the Car Loan product before a current and deliberate "pause" in growth to allow them to see how the book seasons. The CarStart segment makes up 13% of the lending operations and is the longest period (3-4yrs vs 0-1yr or 1-3yrs). 
I think that the above actions, as well as CCP's reputation for being conservative with profit guidance would lead one to believe that if the provisions were not accurate it would be because they are over-provisioned. 


This aside, it's a wait and see approach for me...I have been burnt by management teams before for placing too much trust in them, so I am (attempting to) not walking in blindfolded to the risks.


----------



## craft (7 August 2014)

ROE said:


> 5K loan over 36 months cost you 23-24% pa which is comparable to credit card cash advance ... Most other lender cant do it at this rate for credit impair customers but credit corp can




Actually 
$5,000 over 36 Months = Comparison rate of 38.47%
$1,000 over 6 Months = Comparison rate of 62.78%

http://www.moneystart.com.au/files/other/moneystart_ComparisonRateSchedule.pdf?v=0001

That’s pretty much where the rest of this industry is at.


I note that TGA mentions that their loan approval rate for cash first is only 15-20% of applicants. They have increased their loan book in this area by only 2 Million.

I would rate TGA higher in credit assessment for this market – it’s their core constituent.

CCP’s core is buying impaired debt that has arisen from a much wider cross section of the credit market. Their collection skills though should be valuable when it comes to trying to get the money back – except you can’t get money out of a stone – the skill in this market segment is assessing the application properly in the first place and having the smallest write off component.

What sort of loan approval rate did CCP have to get their 28 Million dollar loan book increase?

87% of CCP’s loan book is in the unsecured dog end of the market, which is extremely exposed when say compared to TGA who is far more diversified in their loan book. 

In relation to CCP’s car start product (the other 13% of the loan book)  - I noted that TGA have indicated that their CAR lending trial appears to be a no goer. So not sure what will come of CCP’s hiatus on this product. 

Any rate that’s enough devil advocates work from me. Given the relevant stock prices I think I will stay with TGA until further information arises as my exposure to subprime credit.


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## ROE (7 August 2014)

craft said:


> Actually
> $5,000 over 36 Months = Comparison rate of 38.47%




How did you end up with 38.7% ?

$5000 over 36 months total repayment of $8497

$8497 - 5000 = $3497 (interest)

3497/5000 = 70%

70% / 3 = 23.3% p/a


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## craft (7 August 2014)

ROE said:


> How did you end up with 38.7% ?
> 
> $5000 over 36 months total repayment of $8497
> 
> ...




I used their figures – see link in post.

Besides repayments of $236.03 over 36 months on $5,000 is an annuity calculation. Which comes out to 3.2% per month or 38.4% per year. The comparative rate also needs to take into account one off and ongoing fees and charges.

edit

As an aside - the comparative rate which is a legal requirement to show was quite tricky to find on their site. right down the bottom on a non- highlighted link.

Second edit - that link to the table is now gone and it now says in small print at the bottom that the comparison rate is 41.77% based on $2,500 over two years


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## Ves (7 August 2014)

craft said:


> I used their figures – see link in post.
> 
> Besides repayments of $236.03 over 36 months on $5,000 is an annuity calculation. Which comes out to 3.2% per month or 38.4% per year. The comparative rate also needs to take into account one off and ongoing fees and charges.
> 
> ...



Curious myself.  So played around a bit to see if I could re-create the numbers.

To find the interest rate open up Excel and use the RATE function.  Rate(nper,pmt,pv,fv,type,guess)

Nper = number of periods.  36 in this case.
Pmt =  Monthly repayment.  $236.03
PV = Present value. $5000
FV = Future value.  $0 since it will be paid out by end of 36 months.
Type = type of loan,  0 for payment at beginning of month, 1 for end.  I assume it is the end in this case.
Guess = what you think the Interest rate is.  Just type in 38%, if you leave it blank it starts at 10% by default.

Excel spits out 3.4354% for me.   Which is 41.225% annualised.

If I change type to 0,   it comes out as 3.2036% or 38.4435%.

You could alternatively try to use algebra to figure out the interest rate based on the annuity payment formula.  But I wouldn't recommend it.


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## craft (7 August 2014)

Ves said:


> Curious myself.  So played around a bit to see if I could re-create the numbers.
> 
> To find the interest rate open up Excel and use the RATE function.  Rate(nper,pmt,pv,fv,type,guess)
> 
> ...




 except you got your 0 and 1 around the wrong way for beginning and end of period - [or I have been doing it wrong all this time]. Pmt needs to be entered as a negative - but you must have done that to get the right result.


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## Ves (7 August 2014)

craft said:


> except you got your 0 and 1 around the wrong way for beginning and end of period - [or I have been doing it wrong all this time]. Pmt needs to be entered as a negative - but you must have done that to get the right result.



Yep,  just realised  I got the beginning (type 1) and end (type 0) of period payments the wrong way around.  

And yes payment is a negative in this case.   It is of course a positive if you are using the formula to calculate the interest rate on an annuity that you are adding to (like an investment) rather than depleting  (like a loan). 

As for the long-hand method,  did learn it at university.  I cannot remember it off the top of my head,  but I certainly know where to find it if required.


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## hiddencow (7 August 2014)

Hi Craft,

Thanks for raising the points. I hold shares in both TGA and CCP.
Having a look at TGA's latest presenation provision for the loan book is at 11.2% of net receivables. On a gross basis that should be a bit lower so probably closer to 10%. 
On the face of it, it looks like CCP is provisioning at a rate of 26%. This is just another testament of how wonderful this result actually is. TGA has had a couple years of no growth due to the ramping up of it's lending businesses. CCP seems to have been able to maintain profit growth thanks to their main debt collecting business and with the lending side set to be profitably next year, things are looking very good. TGA is also looking very good to deliver profit growth soon.

A 3 year loan that generates 38.4% pa for 3 years is very profitable even if you only receive 74% of those payments. This is a basic assumption based on their provisioning ratio and might be wrong, depending on how the amortised cost of the receivables was calculated. Looking at collections/receivables doesn't show the true picture as collections are only received over time. If all your loans were written on the last day then u would have a very low ratio. With rapid growth in the loan book, we don't really get a meaningful comparison.

I agree that it is a little concerning contrasting how fast CCP has generated it's loan book compared to TGA which may mean they are accepting lower quality borrowers. It does seem that they are provisioning conservatively enough though. There are other factors involved as well though, I think CCP taps into it's database of debtors to offer loans to.

Management have a record of being conservative with forecasts over the recent years so I hope this is the case here as well and actual impairment losses are less than the provisioning. If lending produces the same returns on capital as debt collecting and they maintain this level of growth in the loan book then it it might be the main business soon.


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## craft (7 August 2014)

hiddencow said:


> Hi Craft,
> 
> Thanks for raising the points. I hold shares in both TGA and CCP.
> Having a look at TGA's latest presenation provision for the loan book is at 11.2% of net receivables. On a gross basis that should be a bit lower so probably closer to 10%.
> ...




Hi Hidden Cow

It’s nice to have your input.

TGA provisions as the loans are known to become impaired so balance date provisioning is not comparable unless you knew the duration of TGA's loan book.  CPP’s performance this year given the upfront provision is impressive, there is no doubt the PDL business when firing is a cash cow, but the forecast of 70-90M in PDL purchases next year indicates things are getting tougher even here in Aus. Personally I think they are rushing to fill the hole by building the loan book too quickly (which has inherent risk to loan quality) – but I also don’t expect the market to agree with me (at least in the short term)

Hope you don’t stay to hidden in the future

Cheers

Ps

I understand radio rentals or cash converters cross sell but who goes to a debt collector for a loan? I suppose the answer is the same people that are happy to pay 40%pa for loans. I guess you have to be in their shoes.  CCP certainly haven't had any trouble finding customers to lend the money too.


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## McLovin (8 August 2014)

I sold today. I had a better look at this after my initial comments and started having doubts in my head and with better uses for the money it wasn't hard to twist my arm. I went back and read my notes from way back in 2009 when I bought CCP. What was the issue then? Management had used debt to go on a PDL purchasing spree. It all looks a little too familiar for my liking and to be honest, it looks as though the glory days in PDL's are over. Craft's point is very good, these guys aren't TGA and success is not guaranteed in lending. TGA is a sub-prime lender that happens to flog flat screen teles and is moving into cash sub-prime lending. CCP is a debt collector that wants to move into sub-prime lending. Ordinarily you'd expect the company with the experience to go into it more aggressively, the fact they are not speaks volumes about both companies. No doubt I'll get a paddlin' from the market as the shares go higher and higher.


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## ROE (8 August 2014)

good luck may you deploy capital well elsewhere

from my observation someone is building a position in CPP without letting
the market know ...so you could have sold at least 5% higher from yesterday 
if you was to delay the sell decision.

I continue to hold


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## hiddencow (8 August 2014)

craft said:


> Hi Hidden Cow...
> 
> Hope you don’t stay to hidden in the future
> 
> ...




Thanks craft, I've been lurking around for quite a while and your posts have always been informative.
I'll have to check TGA's reports more closely to see how much of their loans they are providing.
There is only so much info that is disclosed there though.

I agree with you that the lending business is definitely more risky than their established debt collecting business. This is why I am pleased so see such a high level of provisioning. For both TGA and CCP, it seems lending is the area with the most potential for growth. There just seems to be a limitless supply of people wanting to borrow money in Australia. Maybe this will lead to more PDLs in the future?!

I read on a forum somewhere about a person who had finished paying off their debts to credit corp and were offered a new loan. It seems like they are definitely targeting their existing contacts. With 7x% of revenuing from the debt collecting being through payment plans, it makes sense. Try to extend the regular payments with new loans.

I think where my opinion difers from yours is CCP's capability to assess risk in the sub prime space. I think the businesses are all very similar at the core, that is being able to collect revenue which exceeds the cost of obtaining the receivable. Whether that receivable comes from providing the loan to begin with, providing a tv or buying the receivable it all involves an assessment of risk and likely returns.


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## craft (8 August 2014)

hiddencow said:


> I think where my opinion difers from yours is CCP's capability to assess risk in the sub prime space. I think the businesses are all very similar at the core, that is being able to collect revenue which exceeds the cost of obtaining the receivable. Whether that receivable comes from providing the loan to begin with, providing a tv or buying the receivable it all involves an assessment of risk and likely returns.





Hi HC

Nicely summed up 

Our opinions probably don’t differ that much.

Don’t forget I was playing devil’s advocate – I’m not out to trash CCP just to highlight some inherent risks. I’m not saying the risks around CCP should not be taken on by investors – just trying to highlight what they are. If management get it right CCP should do very well. The company has had one almighty lesson in the past about overpaying for risk and hopefully a lot of the hard earned lessons are ingrained in the risk taking culture. 

Personally I have been in and out of CCP quite a few times. I am risk averse and have never been able to look past my inability to get full vision on the quality of the PDL ledger as an outsider – Don’t tell the techies but I overlay my views on CCP with the market action and only hold when I’m not fighting the market. (That in the last 5 years has cost me compared to just buying and holding)

I’m  probably nervous enough now to ignore the market if it takes CCP on a new upswing – at least until the loan book matures a bit. But that’s not saying I no longer like the company fullstop.

CCP and TGA have merged close enough together in their businesses that I don’t see any benefit in holding both. In choosing between the two I prefer TGA at the moment based on my perception of inherent risk and market pricing.

Cheers

Ps

I’m often wrong. (or at least early enough to be indistinguishable from wrong)


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## VSntchr (8 August 2014)

Hiddencow - your user name is uniquely interesting - as are your posts, welcome to ASF.

Some great points put forth by you both.

Have just updated some of my charts and thought I'd present them...CCP does show a few of these in their presentations, but I have given a longer timeframe for a bit more reference of how new management is performing (or coping/reacting with market conditions) compared to the old management. 

The first chart shows the implicit multiple that is achieved. Evidently, CCP was either under amortising pre-2009, or the market was much more generous in the prices it offered. A little from column A, a little from column B appears to be likely I think...
It is comforting that under the stewardship of Thomas Beregi the multiple has remained relatively flat despite conditions becoming much tougher in the PDL market - indicating that they are not willing to compromise on their returns by paying too much....




The next chart shows the PDL turnover ratio. In order to remain competitive CCP has had to get better at what they do. Many times I think about businesses with a competitive advantage that have it tested at certain points in the business cycle. With the PDL market appearing pretty competitive at the current time, one might think that CCP is having their competitive advantage 'tested' currently. ROE often points out that CCP has a competitive advantage in their analytic system which allows them to price debt better than the rest. Perhaps this system has been improved moreso over the last couple of years as they have searched for efficiencies to counteract the increased prices they are forced to pay for PDLs. (I do note that the expansion into new industries of debt collection may also have affect on this ratio).




A question that I have been pondering for quite a while, is whether or not the PDL market will stay competitive - or whether it has the potential to revert back to the conditions that existed a few years ago. The cat seems to be out of the bag with the number of industry entrants that have honed in on the segment, so for the foreseeable future it appears that any excess returns in this particular segment will be hard to come by. This may not be the case forever though, a shock event to the sector that takes out a few of the more risk tolerant players could change the market landscape. I am quite young and acknowledge that a major weakness in my investing is that I have not had the experience of living through and experiencing multiple major business/investment cycles. 

A final chart shows that CCP continues to get more accounts onto payment plans. The reduction in purchases may be indicative of this, however management also stated they are suffering from a reduced share of forward flows - hence I think this is pretty impressive.


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## ROE (8 August 2014)

Craft always good to have frank discussion whether it is negative or positive on a business 
I dont mind at all .. keep it up


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## ROE (8 August 2014)

VSntchr good stuff

I admire you guys for paying so much attention to details... I am the opposite ... I work on ball park figure, some part deliberate some part laziness

if stuff I have interest in fall within that ball park then I am a happy chappy


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## hiddencow (8 August 2014)

craft said:


> Hi HC
> 
> CCP and TGA have merged close enough together in their businesses that I don’t see any benefit in holding both. In choosing between the two I prefer TGA at the moment based on my perception of inherent risk and market pricing.
> 
> Cheers




Our opinions are very similar then. My stake in TGA is a lot more significant than CCP in which I have only recently taken a position.

Valuesnatcher - Can you please enlightnen me on the measurement of PDL turnover, it it simply collections/average PDLs?

The topic of the PDL market and CCP's competitive advantage in it is definitely an interesting one. Having mointoured TGA's results for a period time I once again make a comparison. TGA's PDL business is much smaller within their NCML division and they have made comments about the pricing of PDLs for the last couple of periods so I believe the issue has been around for a couple of years.

Despite this, it seems CCP has managed to achieve a record year of PDL acquisitions, perhaps due to one off events they mentioned. They are forecasting a much lower year of PDL acquisitions but I wouldn't be surprised and am hoping for them to beat that forecast. 

I don't see the overall supply of debt decreasing so supply of PDLs shouldn't be affected unless the businesses are doing more of the collecting inhouse. Demand from new entrants to the market is the most likely reason for the rise in prices. Are these new entrants pricing the PDLs correctly or is it a case of CCP in the earlier years.

The price of PDLs were perhaps too cheap in the past and have adjusted upwards, perhaps too much based on comments by both CCP and TGA regarding their unwillingness to meet the prices and comprimise margins. The question is who is buying the higher priced PDLs then? Perhaps other companies who are more desperate and with less conservative practices who are not willing to wait.


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## ROE (8 August 2014)

hiddencow said:


> The topic of the PDL market and CCP's competitive advantage in it is definitely an interesting one. Having mointoured TGA's results for a period time I once again make a comparison. TGA's PDL business is much smaller within their NCML division and they have made comments about the pricing of PDLs for the last couple of periods so I believe the issue has been around for a couple of years.




CCP competitive advantage is real, most people don't pay attention to it but they are one of the first few business that make use of this technology and I think they are way ahead of the pack... 

if you get it right and I have no doubt CCP has perfect it the return is incredible ...look at all the business that has good data analytic system they perform well a head of their peers and it is repeatable and it is dependable, the more data you have and over a longer time frame the system get better 

here is a recent report on what sort of thing you can do with data analytic system... Coles and Woolies has caught on and start using it big time

http://www.abc.net.au/7.30/content/2014/s4062642.htm


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## VSntchr (11 August 2014)

hiddencow said:


> Valuesnatcher - Can you please enlightnen me on the measurement of PDL turnover, it it simply collections/average PDLs?




That is the numbers I used, yes.


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## ROE (15 August 2014)

who ever is accumulating in the past week, seller is disappearing they have to pay up for the privilege


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## Faramir (15 August 2014)

When ROE mentions buyers and sellers, does this picture help?

Am I reading too much into this?

Feel uncomfortable about buying now. I hardly know this business even though gut feeling tells me it is great. I am not buying from 'Fear of Missing Out'. I need more time to investigate and understand. Then wait for a dip? I love the gap after their announcement on 5 Aug.

Let me know if this is contributing anything to anyone. I need to learn.

PS: ROE is another great contributor that makes me sit up and listen. Just like so many others.

How come the post is showing the graph first? I thought it would show the graph last. What should I make out about the volume? Best time to buy was around late June/July when no one was interested?


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## ROE (15 August 2014)

I am generally uncomfortable talking about share price when to buy and sell at what price
I leave that up to individual I like to generally talk about the business.

FYI I bought another 4500 shares at $8.60 or some where around there in July for a quick trade 
but after the result I change my mind for now and hold until I need the cash for something else.


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## Faramir (15 August 2014)

Sorry ROE, I wasn`t trying to ask anyone about future price movement. (Despite on commenting on the gap 5 Aug).

I was trying to support your post about lack of sellers. My pic showed 64 buyers vs 29 sellers. Although the quantities per seller or buyer was not shown.

As for the aspects of this company - I need to spend more time studying it before I can make a useful contribution.


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## Ves (15 August 2014)

Faramir said:


> Sorry ROE, I wasn`t trying to ask anyone about future price movement. (Despite on commenting on the gap 5 Aug).
> 
> I was trying to support your post about lack of sellers. My pic showed 64 buyers vs 29 sellers. Although the quantities per seller or buyer was not shown.
> 
> As for the aspects of this company - I need to spend more time studying it before I can make a useful contribution.



Personally,  I'm a long term investor.  I don't care about short term price action,  and I don't look at charts  (unless they *accidently* come up on my screen on the ASX website).

I also don't care about missing about because I don't understand.  If I don't understand I probably won't miss out - because I'm more likely to have missed something important and get burnt in the long run. First rule: protect yourself by using _your own judgment._ The only way you can do this is to know the company and how to value it if you are holding for the long term.

When buying I businesses I think of it as swapping my capital  for its future cash flow.   If I believe that the future cash flow will give me X% return then I will consider buying it at Y price.  If it doesn't then I don't buy it.

You need to consider what you will receive as a shareholder (dividends, share buybacks, return of capital) + the potential return from the profits that the company reinvests in its own operations (ie. increased dividends in the future).   The only company that can add value by reinvesting its profits is a company with a competitive advantage. Profitablity is essential... if a business is reinvesting capital into the business and receiving a market rate return then they are not creating any shareholder value.

My reason for this is that if I plan on holding for as long as possible (preferably forever, unless the business deteriorates) then I won't remember how many buyers and sellers were in the market before I purchased.

Work out a value / price you'd like to pay and stick to it.

The only exception to this,  and it may not even be an exception,  is when my purchase would _move_ the market price way above it's current price.  This only happens in illiquid stocks.  I think they refer to this as slippage.

However,  if you do not intend to be a long term holder in the businesses that you purchase my comments may be irrelevant.


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## Faramir (15 August 2014)

Thank you Ves. I like to hold for the long term as well.

I love your contributions on the post: "Present Value of Future Cash Flows"
https://www.aussiestockforums.com/forums/showthread.php?t=23385

Although I am only part way through. You obviously used methods listed there to evaluate CCP and hence your contribution to this post is also very valuable.


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## Ves (15 August 2014)

Faramir said:


> Thank you Ves. I like to hold for the long term as well.
> 
> I love your contributions on the post: "Present Value of Future Cash Flows"
> https://www.aussiestockforums.com/forums/showthread.php?t=23385
> ...




Yes I do use some of those methods. That thread is a pretty good summary of my journey so far.   There may be a few more methods that I have added to my arsenal,   and I am experimenting with.  It's all about finding a method that is most comfortable for you.... at the end of the day, if you are not comfortable, you lack belief, and if you lack belief you will be more likely to buy or sell based on emotion rather than _your_ strategy.


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## JTLP (8 September 2014)

Torres Industries have been dropping a lot of shares lately...is this just a director buying a bigger house?


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## ROE (8 September 2014)

JTLP said:


> Torres Industries have been dropping a lot of shares lately...is this just a director buying a bigger house?




yeah I wouldn't be too concern, he still got a lot left... 

I think there is a demand for the stock, he release some to create some liquidity and he doing it in

in multiple small parcel  so its not a guy who want to jump ship in a hurry.

The founding member uncle Simon barely release any and he has stack load.

I put down to Uncle Don need a water front house in Sydney for all the hard work he put into CCP 

(Tongue-in-cheek remark)


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## JTLP (9 September 2014)

ROE said:


> yeah I wouldn't be too concern, he still got a lot left...
> 
> I think there is a demand for the stock, he release some to create some liquidity and he doing it in
> 
> ...




Ha yes! Exactly what I thought. I'm still happy and picking up a healthy divvie doesn't bother me in the slightest


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## VSntchr (9 September 2014)

JTLP said:


> ......picking up a healthy divvie doesn't bother me in the slightest




CCP is the first stock that has forced me to ponder the question: should I be looking at the yield on current market price, or instead on my purchase price.
The argument for market price stands as you can sell your current stock and put the *entire* proceeds into a bank account (or other investment) and earn interest on total balance, whereas only your original investment is earning the original purchase price yield.

The argument for original purchase yield is perhaps more of just an additional justification to hold...e.g. I shouldn't sell these because I'm getting 10%+ yield (or whatever figure).


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## hiddencow (9 September 2014)

I think purchase price is a sunk cost and only relevant for tax implications.

It's good for feeling good about yourself but doesn't help at all for your current decision making.
If anything, I try to ignore the emotional impact of how much I've made or lost on a share when making a decision on buying or selling it. We're only human though.


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## Boggo (9 September 2014)

Been having a good run with CCP in my SMSF.
CCP is one of a list about 480 StockDoctor stocks where weekly charts are getting results.
Fully franked dividend coming up on 24th.

Currently holding based on chart below.

(click to expand)


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## herzy (11 November 2014)

Sold out today because I needed the capital. Great company (and continues to improve). Will hopefully pick up some again if/when it drops back below $9.


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## craft (17 December 2014)

craft said:


> I’m  probably nervous enough now to ignore the market if it takes CCP on a new upswing – at least until the loan book matures a bit. But that’s not saying I no longer like the company fullstop.
> 
> CCP and TGA have merged close enough together in their businesses that I don’t see any benefit in holding both. In choosing between the two I prefer TGA at the moment based on my perception of inherent risk and market pricing.
> 
> ...




Just reviewing a good discussion that took place on CCP last time I was on ASF.






Any new thoughts? Is the divergence between TGA and CCP in the last month warranted or will it revert?


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## hiddencow (17 December 2014)

I've recently reduced my TGA which I was very heavily overweight in and increased my holding in CCP a little.
Most of the funds went elsewhere though.

I think CCP will do very well in the next couple of years provided their PDL business doesn't suffer majorly.
Accounting for loans on an expected loss model instead of incurred is very conservative compared to everyone else out there. Adjusted for this accounting policy choice, could have added a few million to the profit figure in the last year.

You are right though that we still have to wait and see what the actual loss will be on the loanbook but if it's comparable to CCV and TGA then they will do very well.


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## hiddencow (17 December 2014)

And there we go, more under promising and overdelivering.
PDL purchases revised up significantly.


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## craft (19 December 2014)

hiddencow said:


> And there we go, more under promising and overdelivering.
> PDL purchases revised up significantly.





Will these PDL purchases be as profitable as previous?

Has the market come back to CCP's purchasing criteria or has CCP met the market to increase purchases?

ps

I don't know the answer.


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## VSntchr (19 December 2014)

craft said:


> Will these PDL purchases be as profitable as previous?
> 
> Has the market come back to CCP's purchasing criteria or has CCP met the market to increase purchases?
> 
> ...




In the result they spoke of trouble renewing forward flows, however now they have announced that this has reversed. Your question is pertinent.....and without asking the company specifically we can only rely on our best assumptions.

Historically, this management team has been transparent and as HC said been serial underpromisers and overdeliverers. If they are compromising this trait and risking their reputation of meeting target returns by increasing over and above what they should be paying...I would be disappointed. Other than shooting off an email to prod them for a better response - all I can do is keep monitoring the relevant metrics to ensure they are not stretching their book to bolster PDLs.

Probably not worth taking too much from my posts though, CCP is a very long term holding for me and has grown to be a good chunk of my portfolio - I am clearly biased.


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## ROE (29 January 2015)

awesome result, these guys are the best of the best, year on year grow, year on year dividend increase and the consumer lending generating profit much faster than I anticipate  very very happy

the secret ingredients is paying off in other areas


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## galumay (29 January 2015)

ROE said:


> awesome result, these guys are the best of the best, year on year grow, year on year dividend increase and the consumer lending generating profit much faster than I anticipate  very very happy
> 
> the secret ingredients is paying off in other areas




Hard to find anything to fault in the half yearly report! Very happy to hold CCP, I agree about the 'secret ingredient'.


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## hiddencow (29 January 2015)

Solid set of results.

Slight decline in earnings from PDLs but the outlook for them is looking up.

Lending contributed to all the profit growth but this was actually due to a decline in new loans which is only temporary.
It gives an insight of what the true profit of the lending division is when it's not being impacted by the upfront provision. What we should be hoping for is large losses from the lending division as they continue to write significant new loans.

Very excited about the next few years for CCP.


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## McLovin (29 January 2015)

hiddencow said:


> It gives an insight of what the true profit of the lending division is when it's not being impacted by the upfront provision.




The provision is a cost of doing business and represents a real cash outflow for the business. By the company's own estimates 25% of the money it lends out won't come back. That is a real expense to the business. The loan book has grown very quickly and it will be interesting to see if there provisioning is correct, which we'll only know after a few years.


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## ROE (29 January 2015)

and remember these guys since the debacle they usually over estimate cost and under promise result
so I expect the provision will be revised down the track 

no one expecting much growth this year a while ago based on their own estimate and wham 17% 
not many business can deliver this sort of grow in earning currently


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## hiddencow (29 January 2015)

Yes, it is a real cost of doing business but the recognition of the full amount up front on writing the loan, before any revenue is recorded, doesn't represent the true economic situation. We won't know until it's all completed but it's pretty safe to say they are understating their true economic profit at this stage.

Compared to their peers, CCV, TGA, who are recognising loses on an incurred instead of expected basis, their profit is understated.


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## McLovin (29 January 2015)

hiddencow said:


> Compared to their peers, CCV, TGA, who are recognising loses on an incurred instead of expected basis, their profit is understated.




They both provision. I'm pretty sure the AASB would require provisioning as part of the estimation of future cash flows.


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## hiddencow (29 January 2015)

McLovin said:


> They both provision. I'm pretty sure the AASB would require provisioning as part of the estimation of future cash flows.




CCP have early adopted AASB 9 which changes the provisioning model from an incurred lost to an expected loss model. The all have provisions, CCP just recognises provisions for losses sooner, hence understating profits when there are a lot of new loans.


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## McLovin (29 January 2015)

hiddencow said:


> CCP have early adopted AASB 9 which changes the provisioning model from an incurred lost to an expected loss model. The all have provisions, CCP just recognises provisions for losses sooner, hence understating profits when there are a lot of new loans.




Yes, I see what you're saying. CCPs approach is more conservative.


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## ROE (30 April 2015)

Steady as she goes with the latest update..

and I like page 12 (Not a payday lender), I got out of CCV sometimes ago for being a pay day lender and I wouldn't want CCP to go down that path


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## herzy (30 April 2015)

ROE said:


> Steady as she goes with the latest update..
> 
> and I like page 12 (Not a payday lender), *I got out of CCV sometimes ago for being a pay day lender* and I wouldn't want CCP to go down that path




Business or ethics?


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## Miner (1 May 2015)

herzy said:


> Business or ethics?




Back in old days when I did my MBA there was a subject called Business Ethics.  It is a joke when I know they do not go together excepting to publish in annual report, vision and mission statements in the website.


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## christianrenel (23 June 2015)

The Chart for the CCP has touched the 12.00 mark for the 5th time, and recently the share has pushed through this mark, I feel there could be more upside

Kind Regards 

Christianrenel


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## VSntchr (23 July 2015)

Whilst I can't say I got the bottom like fellow ASFer ROE did, I did get onto this one pretty early after the collapse.
Today is a bit of a celebration as it eclipses the previous all time high of $12.99 set 8 years ago in July 2007.


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## tinhat (1 October 2015)

Kaboom! Dropping like a stone. I understand that this might be on concerns that USA corporation Encore Capital has taken a majority ownership of Baycorp and concerns that increased industry competition for debt ledgers domestically might see margins  fall.

And yet, the annual report out today states (p29)

2016 outlook
Credit Corp is well-positioned to deliver another year of solid earnings growth. The core domestic debt purchasing segment will benefit from strong purchasing over the second half of 2015 together with a satisfactory pipeline of acquisitions for 2016. The consumer lending business is on track for further growth from its strong starting position.

Any thoughts?


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## galumay (1 October 2015)

tinhat said:


> Any thoughts?




Given that there is nothing in the public arena to cause such a large drop relative to the market, it looks like simple old insider trading. Someone knows something and is acting, all too common in our market. Regulators to weak to do anything about it. Cest la vie!


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## VSntchr (1 October 2015)

galumay said:


> Given that there is nothing in the public arena to cause such a large drop relative to the market, it looks like simple old insider trading. Someone knows something and is acting, all too common in our market. Regulators to weak to do anything about it. Cest la vie!



That's a big call.
I think it could be quite easily explained by the fact that CCP is a thinly traded stock. One holder with a decent line of stock doesn't like the thought of an increasingly competitive marketplace going forward (which is what a few analyst notes have alluded to) and they are punching for the exit. Lots of stops probably getting hit too doesn't help and then the mini crash turns into a self-fulfilling prophecy.


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## galumay (1 October 2015)

VSntchr said:


> That's a big call.




You are right! I was in a grumpy mood about something else this morning and I reacted with my misplaced emotion.

More likely its nothing and it will bounce back to previous levels for no other apparent reason!


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## The Falcon (1 October 2015)

VSntchr said:


> That's a big call.
> I think it could be quite easily explained by the fact that CCP is a thinly traded stock. One holder with a decent line of stock doesn't like the thought of an increasingly competitive marketplace going forward (which is what a few analyst notes have alluded to) and they are punching for the exit. Lots of stops probably getting hit too doesn't help and then the mini crash turns into a self-fulfilling prophecy.




Yeah, tend to think so. Entered today at 931cps half position. Had been looking for an entry point after to "discovering" CCP recently.


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## skc (1 October 2015)

galumay said:


> Given that there is nothing in the public arena to cause such a large drop relative to the market, it looks like simple old insider trading. Someone knows something and is acting, all too common in our market. Regulators to weak to do anything about it. Cest la vie!




I read the announcement by OCP 2 days ago but didn't make the connection. I didn't think much of it as the transaction was for 27.86% of Baycorp for $18.3m. This implies the whole of Baycorp is only worth ~$66m. This compared with CCP's market cap ~$500m in the not too distant past. 



galumay said:


> You are right! I was in a grumpy mood about something else this morning and I reacted with my misplaced emotion.
> 
> More likely its nothing and it will bounce back to previous levels for no other apparent reason!




It's not nothing. The reduction in margin may or may not eventuate. We don't know yet. The market was already worried about WBC pulling it's funding to CCP and it's been sold off steadily for 2 months. 

My guess is that nothing will really come of it for at least the immediate future (6-12 months)... so a short term oversold for me. FWIW I have a long CCP pairing with a short in CLH. CCP is down ~18% whiel CLH is only down ~6%.


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## Knobby22 (1 October 2015)

I sold half at $9.38.

if you are not sure what's going on, better to lighten the load. Though it is probably oversold.


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## Triathlete (1 October 2015)

I will be looking for it to pull back around $8.25 to $8.50  from a technical view

It is rated a star growth stock with Lincoln Indicators stockdoctor with a valuation of $13.01 and a consensus target of $12.15 presently though.


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## tinhat (2 October 2015)

skc said:


> The market was already worried about WBC pulling it's funding to CCP and it's been sold off steadily for 2 months.



I received information that WBC was pulling funding from pay day lenders and that CCP is not a pay day lender and therefore not impacted. Does CCP use funding from WBC? I have no idea.


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## galumay (2 October 2015)

tinhat said:


> I received information that WBC was pulling funding from pay day lenders and that CCP is not a pay day lender and therefore not impacted. Does CCP use funding from WBC? I have no idea.




Yes, as I remember that is the case, CCP is not a payday lender and so not impacted. I also dont know if they have borrowings from WBC anyway.

EDIT - here is the content of an earlier announcement,

"Over the past few days there have been announcements by other ASX listed companies and media reports of statements attributed to Westpac bank advising that it has made a decision to withdraw funding and transactional banking facilities from organisations engaged in ‘payday lending’.

Credit Corp advises that it is in communication with Westpac in relation to its decision. It is uncertain whether the decision will affect Credit Corp’s present Westpac facilities upon their expiry in July 2017.
Credit Corp does not engage in ‘payday lending’. Credit Corp does not offer loans over periods of less than 4 months. The interest and fee rates that apply to loans issued by Credit Corp are set well below legislated caps and are delivered responsibly.

If Westpac’s decision does affect Credit Corp’s banking facilities it will not alter the company’s guidance for the 2016 financial year issued on 4 August 2015. Lending over periods between 4 and 12 months is a very small part of Credit Corp’s activities."


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## Value Hunter (4 October 2015)

I topped up my holdings at $9.40 just this week 

Donald Mclay who is chairman of the company is also chairman of Torress Industries (a private investment fund). Torress Industries increased its stake in Credit Corp by 50,000 shares recently at a price somewhere between $9.50 and $10 per share.

Credit Corp (CCP) is currently paying $0.44 per share in fully franked dividends albeit with a dilutionary DRP (dividend reinvestment plan) in place. This represents a yield at the last traded price of $9.49 of over 4.6% fully franked. My forecast for FY2016 is that they will slightly beat the top end of their guidance and produce earnings per share of at least $0.90. This represents a forward p.e. of less than 11 times.

My long-term (5-10 years) outlook for the company is that they will compound earnings per share in the low double digits while paying good dividends.

My opinion of the long-term outlook:
-Australian PDL business: this is a mature business with no real growth prospects. Expect variations in year to year purchasing volumes but generally there is unlikely to be any growth over the long-term. If you look at the percentage of past 90 day plus due debts being sold to debt collectors it is higher than America and the U.K. and possibly the highest in the world (if not it would be close to it). Basically every worthwhile bad debt that can be sold is being sold. Also growth in unsecured personal/consumer debt is quite low (as opposed to growth in mortgage debt) meaning the market is not growing much meanwhile all the debt collection companies who have plenty of access to capital and are looking for growth are demanding more and more bad debts and hence bidding up prices. Credit Corp must and is continuing to improve productivity however the benefit of productivity improvement (only a few percent a year as the low hanging fruit has already been picked) is going to the vendors (in the form of higher prices for bad debts) of bad debts (banks, etc) rather than to debt collectors.
My prediction therefore is that volume will generally fluctuate year to year but will be largely static over time and returns will remain broadly the same (rising productivity and disciplined purchasing will offset rising PDL prices).

-Consumer lending business: they are well below legislated maximum interest rate caps for their products and are operating in a market that has some competition but is far from fiercely competitive. They also have the advantage of having an existing costumer base to cross-sell into. The customer base I refer to is the bad debts on their PDL books. Once somebody on the PDL book pays of the debt in full and has a reasonably consistent repayment history, Credit Corp can then turn around and offer them a short-term loan. There are plenty of initiatives to boost productivity and broaden the product range in this business as it is still early days. Also they are under-reporting profits in this business compared to the cash flow it generates. They are upfront provisioning for bad and doubtful debts because of early adoption of a proposed new accounting standard which competitors have yet to adopt. While competitors write off bad and doubtful debts as they occur they are writing it off (based on a forecast) upfront as soon as the loan is made. The actual bad debts they are experiencing is less than forecasts and hence they are arguably over-provisioning and hence under-reporting profits. Based on discussions with management, They are provisioning for an annualized loss rate of around 10 or 11% but are actually experiencing a sub 9% loss rate (inching towards 8%). Don't expect loss rates to drop below 8% though as management has indicated below that level would mean they are being too stringent with lending criteria and hence not maximizing loan volumes. Productivity improvements will be reinvested into marketing spend and lower product pricing to grow the loan book over time (according to my conversations with the CEO and CFO). I expect this business to experience rapid growth over the next 2-3 years and well beyond.

-U.S. PDL business: They are currently losing around 2.5 million AUD per year in this business. They must maintain a certain size and number of staff to be able to bid for PDLs and be taken seriously, and to be able to ramp up volume should the opportunity occur. I spoke to the company CFO. He believes even without increasing PDL purchasing they will be able to get the business to break-even in less than 2 years solely via cost cutting and productivity improvements (plenty of low hanging fruit here). In the U.S. market partially due to regulatory uncertainty as well as a few other factors many of the big banks in the U.S. are keeping bad debts on their books (and collecting themselves) rather than selling them to debt collectors. This has resulted in depressed volumes of PDLs being sold into the market and unsustainable high prices (and thus low returns) for PDLs. At some point the market conditions will improve and PDL volumes will rise and prices will fall. Credit Corp will then be able to rapidly expand this business to become a substantial earner. Although this segment will hit break-even within 2 years it is unlikely to earn much (if anything) for at least the next 3 years. However in 10-15 years time I expect it to be a bigger earner than the Australian PDL business.


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## JTLP (28 October 2015)

This has copped a battering recently and has come off the boil, from $13.50ish to $8.78 today. To be fair the only "material" news is the withdrawal of funding for loans under $2,000, however they said this would not be material to earnings. 

So what else could be the factor? Slowdown in collection rates? US costing too much for no return? Major holder selling down?

Yielding about 5% now - so for me the punt is nearly worth it. Just need to look at support levels and to see when the selling dries up and off we go!


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## galumay (28 October 2015)

JTLP said:


> Major holder selling down?




Thats the main reason, 2 major US holders sold out. Its always been pretty thinly traded hence volatile. 

Market probably also over reacted to the ACCC mistake in calling all lenders in the SACC category "Payday lenders", despite the reassurances of it being immaterial to profit guidance.


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## Faramir (28 October 2015)

I brought 228 shares @ $8.86 plus $14.95 brokerage. Being watching for a while. Over the last 14 or more months, I was wondering if I ever get an opportunity to get in. Finally I decided now is the time. Recent sentiment around these companies will turn around.


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## Ves (28 October 2015)

The remarks at the CLH AGM  paint an interesting picture for this industry,  especially with PDL profitability and the (lack of) attractiveness of estimated future returns at current market prices for PDLs.

CLH are saying they've cut their buying by as much as 20% this year so far,   but they're saying that other competitors are buying which means the unattractive prices are persistent.    

CCP is still the biggest player.   Are they still buying up?

Does the Baycorp plan of going from 6/7 in Australia to #1/#2 in the market mean that market prices for PDLs in the medium term will be unattractive due to the increased market demand?


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## Faramir (28 October 2015)

Triathlete said:


> I will be looking for it to pull back around $8.25 to $8.50  from a technical view.



CCP closed at $8.61 today with a low $8.56. That is an accurate prediction which I didn't believe at first. Please excuse my lack of TA knowledge. The volume has been much higher over the past few weeks as a major US holder wanted to exit. I shouldn't say more about CCP from a technical view as my TA knowledge is very LIMITED!

I originally set my price at $8.60 3 weeks ago. CCP bounced around the low to mid $9. It even cracked $10 and I thought I set my price too low.

Slowly I raised my bid price as each day went by. The big drop in the past two days allowed Mr Market to meet me at $8.86. In hindsight, I should not have altered my price at $8.60.

This is my 11th stock. Seems like I catch falling knives often. (I caught SRX on the way down as well - now SRX is good for me.)

I wonder if the Australian dollar will stabilise?? Would CCP become attractive to overseas investment houses again, given that CCP's track record of delivering on its promises plus CCP's impressive ROE? There is many positive comments about CCP written in this thread.

Well done to those who got into CCP many years ago when things looked very bad. If only I knew about investing back then.


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## Valued (28 October 2015)

If the price is $10 and you're offering $8.60 or 8.86 or any other amount substantially less than $10 then usually the reason it gets to that price is because the price just dropped over 10% and the stock is in a downtrend, at least in the intermediate term. If that happens, unless you're lucky enough to catch the bottom, you're positioning yourself to buy in a falling market, which is why when you buy the price is moving against you.


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## Rainman (29 October 2015)

Valued said:


> If the price is $10 and you're offering $8.60 or 8.86 or any other amount substantially less than $10 then usually the reason it gets to that price is because the price just dropped over 10% and the stock is in a downtrend, at least in the intermediate term. If that happens, unless you're lucky enough to catch the bottom, you're positioning yourself to buy in a falling market, which is why when you buy the price is moving against you.




It never ceases to amaze me how thick-headed this kind of remark is.  

You point to a stock price over a period of days or weeks and say: Look, the stock is in a downtrend.  Then the stock reverses and starts rising and you say: Look, the stock is in an uptrend.  

You state the obvious and present it as if you have just solved the riddle to the origin of the universe.


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## Valued (29 October 2015)

Rainman said:


> It never ceases to amaze me how thick-headed this kind of remark is.
> 
> You point to a stock price over a period of days or weeks and say: Look, the stock is in a downtrend.  Then the stock reverses and starts rising and you say: Look, the stock is in an uptrend.
> 
> You state the obvious and present it as if you have just solved the riddle to the origin of the universe.




Well it may not be obvious. He says he doesn't have much experience with technical analysis and says the price always moves against him when he buys, but he is setting himself up to buy in a falling market 100% of the time since he puts his offer over 10% lower than the current price, meaning that if the stock did get down to that price there is some reason for it and it is more likely to continue falling then to suddenly stop at that price or hit his offer and shoot back up.


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## Rainman (29 October 2015)

Valued said:


> Well it may not be obvious. He says he doesn't have much experience with technical analysis and says the price always moves against him when he buys...




Well, if he is buying (or selling) with the expectation that the market is going to accommodate him with its direction, perhaps he should be riding an escalator.


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## Triathlete (29 October 2015)

Well I do not know about anyone else but the *first thing I do is understand the  direction of the stock or market that you are looking to invest/trade  in and  how far it is likely to move ( I calculate this ) in that direction then take a position to suit*. 

To me it is not worth taking* unnecessary risks *if a *company shows value *I would not take a long position if I can see that the move would be still be moving down but rather wait until the market has recognised the value and starts to move with the stock that is when I would take the long position.

In other words why would I have my money exposed to the market for 12 months to make 30% return when I could* understand the direction *and take a position to suit and make it in 6 months.


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## galumay (29 October 2015)

Triathlete said:


> Well I do not know about anyone else but the *first thing I do is understand the  direction of the stock or market that you are looking to invest/trade  in and  how far it is likely to move ( I calculate this ) in that direction then take a position to suit*.
> 
> To me it is not worth taking* unnecessary risks *if a *company shows value *I would not take a long position if I can see that the move would be still be moving down but rather wait until the market has recognised the value and starts to move with the stock that is when I would take the long position.
> 
> In other words why would I have my money exposed to the market for 12 months to make 30% return when I could* understand the direction *and take a position to suit and make it in 6 months.




Thats all very well if you have a belief in TA.


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## Triathlete (29 October 2015)

I also have a belief in FA as well as TA and use both types of analysis to my advantage and  not the market.


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## tinhat (29 October 2015)

Yesterday CCP hit the 38.2% retracement level of the near-death-experience 2009 low of $0.39 to the $13.61 high of July this year. It is now at the same price it found support at during the 2013/14 retracement and near the price I recently re-bought in at ($8.98). Which way will it go? Interestingly, the Reuters Thompson analyst consensus forecast of  $11.63 has not changed and seems like fair value to me. Is this a case of the price overshooting to the up and downside or does Mr Market know something I don't? Handy dividend yield at this price with franking credits.


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## Triathlete (29 October 2015)

There is a strong support level around this $8.50 level.

Provided it can hold above this level which is also the 50% retracement level of the $3.56 low on the week ending 25/11/2011 and the $13.61 high on the week ending 31/7/2015 which was also an impulse wave 3 which is usually the safest wave to trade on.

I would expect the stock to eventually turn and start it's move higher for the final wave 5.

It is currently in a corrective wave 4 still has not broken through the down trend line so still time to get in when the time is right.

I will be watching with interest.

Fundamentally Lincoln indicators has a current valuation of $11.96 and a consensus target of $11.34


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## Rainman (29 October 2015)

Triathlete said:


> ...  [W]hy would I have my money exposed to the market for 12 months to make 30% return when I could* understand the direction *and take a position to suit and make it in 6 months.




I'd really like to see these 30% returns each 6 months (which is a 60% return annualized) that you say that you are getting from using a TA strategy.


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## Triathlete (30 October 2015)

Rainman said:


> I'd really like to see these 30% returns each 6 months (which is a 60% return annualized) that you say that you are getting from using a TA strategy.




Maybe you can work it out for me....Go back through the forum I joined in Nov 2014.Take a look at the calls I made on WOW,CBA,BHP,CAJ,CCP,TLS and see what returns could have been made at the time I made the calls.


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## Rainman (30 October 2015)

Triathlete said:


> Maybe you can work it out for me....Go back through the forum I joined in Nov 2014.Take a look at the calls I made on WOW,CBA,BHP,CAJ,CCP,TLS and see what returns could have been made at the time I made the calls.




Just so that I'm clear, you're saying that:


 you want me tell you want your actual returns are;


 your investment record extends from November 2014 to now; and


 11 months is the timeframe by which we are to be persuaded that your strategy delivers you 60% annualized returns.
Is that what you're saying?


----------



## Ves (30 October 2015)

Triathlete said:


> Maybe you can work it out for me....Go back through the forum I joined in Nov 2014.Take a look at the calls I made on WOW,CBA,BHP,CAJ,CCP,TLS and see what returns could have been made at the time I made the calls.




Ok.  Took me 2 hours but I've gone through all of these threads.  And my understanding is as follows.

The problem is you used a lot of language like "I think"  "This could"  "This might"  "The chart says"  rather than "I have" "I did"  etc.   So the trades themselves are probably hypothetical.  Most of it was discussed in the context of probabilities,  not actions.  Discussions amongst fellow chartists, not actual trades.

I can't find any mention of using stop losses.   So for the purpose of this exercise I will assume it's the pretty standard,  say 8%, because your comments indicate you hate being in trades that go the wrong way.

So...  in no order.  Your posts are time stamped,  and usually after the close.  So I took the next trading day's open to initiate all trades where it wasn't clear. Here are the hypothetical trades I come up with as a person reading your posts (in hindsight of course).

*WOW*

You had some really good analysis in this thread. I'll say that upfront.  But as tech/A always says application and theory are two different things.  It's hard from your posts to figure out what you actually did (if anything). 

(post 453)  you had a price target of $29,  and looks like you shorted (*Trade #1*).   Market price was $31.00 on the next open  (21/11/2014).

On 17/12/2014 price hit a low of $29.11.   We'll pretend you accurately caught the low  (unlikely in reality).

(post 462)  You mention that there should be a small bounce to $34-37 area,  so assume you went long again (conveniently for the exercise this is where you'd closed the short).  Again finding it hard to keep up,  as no actual trade details were confirmed.

*Trade #2* Long 18/12/2014 at open $29.61.  Price hit $34.32 on 24/2/2015.   This is the best case of the $34-37 target zone.  So I'll assume you sold here.   No mention of this in thread,  so I'm being kind again.


(post 593)	You mentioned you were sitting on the sidelines  (early March 2015) - must not have done much since Feb 2015?	(Which fits in above with closed long trade #2)

post 634	you allude to down-trend,  but say no hurry to jump in yet (long), no mention of shorting									
post 637	you say it will probably go to around $26 (which you called "worst case" later - post 645) & post 640 call it a "falling knife"	

I will say you shorted here.  *Trade #3*  12/5/2015 short at open $27.20.

post 680	you say the bottom  is probably in - no further posts once it hovered around $26 so trade must have been closed.

Close 21/8/2015 $26.01 - the exact low.   Again generous.

I couldn't pick out any further trades for WOW.

*CBA*

(Post 502) - you said LT W3 (sub wave 4) target $102 - it doesn't look like you made a buy / sell decision,  due to unclear wave analysis, also see (post 504)	

(Post 512) -  you're now claiming to have got out at $93.90 but you never said where you got in??? Price at this date was $82.53 not $93.60												

*Trade #4 *We'll say you went long at post 502 when the price 26/11/2014 opened at $79.6277.  Again generous.  And closed it at $93.60  (I've got no idea which date).

*BHP*

(post 2451) - you said it will fall to the $20-24 level, so assuming you went short here.  

*Trade #5* Short 21/1/2015 open $25.2774

But BHP went to $30 and paid a dividend before it ever went under $25 again (Jul 2015). I guess you got stopped out.  

Short closed with stop 8% on 3/2/2015 at $27.30  (8%)

I can't see any mention of this trade being re-entered at the top or any where in between. 

*CAJ*

Up front I will say  I'm not sure you can actually borrow stock to short CAJ.

Looks like in (post 33) you said it will likely bounce from here.

*Trade #6*  Long 11/9/2015 open $0.60.

(Post 34)  You indicate that it went the opposite way and broke support.  So I'll call this stopped out on 30/9/2015 at $0.55.

Looks like from (post 34) you would go short here.

*Trade #7*  Short 4/10/2015 open $0.54  

No mention of closing it.  So I'll take the closing price 29/10/2015 and say you closed it there at $0.41.


*CCP*

(post 565)  You mention a target price of $8.25 to $8.50.   I guess this means short.

*Trade #8*  Short 2/10/2015 $9.43

Unfortunately from here the price went back to as high as $10.24.  So I'll stop you out at $10.19 which is the 8% loss level.

No more trades mentioned after this date for CCP.

*TLS*

(post 1770)	first post in thread when price was $6.00 (I'll assume you went short) - (post 1813) you said it'll hold $5.70 so I suggest this was the target,  also refer earlier chart 										
*Trade #9*  9/6/2015 Short Open $6.00 

The price subsequently went as high as $6.53 on 4/8/2014.  Which is just over 8%, so we'll say it got stopped here.

In summary:

Trade 1	6.10%
Trade 2	16.30%
Trade 3	4.37%
Trade 4	17.92%
Trade 5	-8.00%
Trade 6	-8.33%
Trade 7	24.07%
Trade 8	-8.06%
Trade 9	-8.12%

Average win 4.03%.


From your posts I've got no idea where the 30% return comes from.   Maybe I've missed something?


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## Klogg (30 October 2015)

Ves said:


> Ok.  Took me 2 hours but I've gone through all of these threads.  And my understanding is as follows.... (Rest of quote removed)




Hahaha, I love it.
Thanks Ves, your post made my day


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## Rainman (30 October 2015)

Triathlete said:


> Maybe you can work it out for me....






Ves said:


> Ok.  Took me 2 hours but I've gone through all of these threads.  And my understanding is as follows.




And here I was thinking Triathlete's challenge was merely a rhetorical question.


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## Value Hunter (1 November 2015)

I topped up my holdings and bought a some more Credit Corp shares earlier this week at $8.66. Averaging down is fun


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## Triathlete (2 November 2015)

Ves said:


> From your posts I've got no idea where the 30% return comes from.   Maybe I've missed something?




Your right Ves..

My quote of 30% comes from my own trading of CBA and ANN first bought 30/6/2014 and 
TLS from 23/12/2014. These are stocks I had mentioned in my blog posts.:


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## VSntchr (3 November 2015)

craft said:


> If I recall correctly you had some great charts/analysis tracking CCP PDL profitability - also wouldn't mind seeing them again.
> Cheers



Updated as of FY15 results.

Amortisation compared to the carrying value of the PDL portfolio. 




Here is a chart showing PDL purchases compared to the amortised value on an annual basis.



For a different perspective, this chart shows the actual collections CCP has made against the amortisation.




Finally, here is a chart which shows that CCP has been increasing recurring revenue since 2007 by increasing the proportion of customers on payment plans.


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## bigdog (5 November 2015)

The market liked todays ASX ANNs

* CCP     $9.850   +$1.200 +13.87% Thu 05 Nov 2015 10:29 AM (Sydney )
*
Credit Corp Upgrades Full Year 2016 Results Guidance
Thursday 5 November 2015

Credit Corp Group Limited (ASX:CCP) (the Company or Credit Corp) today reported strong performance over the first four months of the 2016 financial year and as a result provided updated full year guidance in accordance with the following table.

Full Year 2016 Outlook
Issued Aug-15 Updated Nov-15
PDL acquisitions $90 - $120m $125 - $145m
Net lending $30 - $40m $30 - $40m
NPAT $40 - $42m $42 - $44m
EPS (basic) 86 - 91 cents 91 - 95 cents

In the Company’s core debt purchasing business, a combination of strong Purchased Debt Ledger (PDL)
acquisitions and the rollout of further operational improvements has produced record collection results.
Collections over the first four months to October are up by 10 per cent over the same period in the prior
year.

Operational improvements and continued leadership in sustainability and compliance represent a
compelling value proposition for Credit Corp’s clients. This has resulted in favourable outcomes in recent
forward flow renewals. The committed pipeline of full year PDL acquisitions now stands at $105 million,
which is $40 million higher than the same point in the prior year.

In Credit Corp’s lending business, the loan book continues to grow strongly and is presently tracking
ahead of expectations. Growth is primarily occurring in the personal loan product in the amounts of
$2,000 to $5,000. The decision to cease issuing small amount credit contracts (SACCs) from March
2016 will not affect the company’s ability to meet current year loan growth targets.

Despite unchanged external conditions, solid progress is being made in the United States. A
substantially improved operating model has been successfully trialled for purchases made over the first
four months of the current financial year. Early performance suggests that a 35 per cent improvement in
collection efficiency can be achieved. Legal collections are now tracking in line with internal targets. If
these early results can be confirmed, increased PDL purchasing at current pricing will bring the US
business to breakeven in future years.

Credit Corp is pleased to advise a strengthened relationship with its principal banker, Westpac.
Continued growth has necessitated a short-term increase in Credit Corp’s borrowing facility by $10
million to $85 million. This short-term increase will provide the company with the opportunity to review its
long-term borrowing alternatives in light of the strong growth outlook across all its businesses.

This media release should be read in conjunction with the Annual General Meeting materials released

817


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## Ves (5 November 2015)

Ves said:


> The remarks at the CLH AGM  paint an interesting picture for this industry,  especially with PDL profitability and the (lack of) attractiveness of estimated future returns at current market prices for PDLs.
> 
> CLH are saying they've cut their buying by as much as 20% this year so far,   but they're saying that other competitors are buying which means the unattractive prices are persistent.
> 
> CCP is still the biggest player.   Are they still buying up?




So CLH is buying 20% less than this time last year because they don't think the PDL market is offering enough risk / reward at current prices.

But CCP is buying 10% more than this time last year and is now improving their market guidance.

Can they both be right?


----------



## galumay (5 November 2015)

Ves said:


> So CLH is buying 20% less than this time last year because they don't think the PDL market is offering enough risk / reward at current prices.
> 
> But CCP is buying 10% more than this time last year and is now improving their market guidance.
> 
> Can they both be right?




Possibly, CCP has an advantage with the scale and quality of its data analytics, it also strikes me as a skilfully managed company. Its possible their efficiencies allow them to pick and choose well enough to find profit where others are unable?


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## craft (5 November 2015)

VSntchr said:


> Updated as of FY15 results.




Awesome VS - thanks.


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## ROE (5 November 2015)

Ves said:


> So CLH is buying 20% less than this time last year because they don't think the PDL market is offering enough risk / reward at current prices.
> 
> But CCP is buying 10% more than this time last year and is now improving their market guidance.
> 
> Can they both be right?




My money is on CCP, thought I am bias , proven track record, world beating  analytic system 
similar use of technology like DMP

CLH is like DMP vs Pizza Hut


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## Faramir (5 November 2015)

Hi ROE
Nice to hear from you again.
Sorry everyone for my not-so-good quality posts in #571 and especially #573. Sorry for not responding to any of the following comments. I just did not know what to say.

I like Page 6 of the CEO AGM Presentation.

http://www.asx.com.au/asxpdf/20151105/pdf/432rm4yhd1q31d.pdf

The table lists various info of CCP and their competitors. I was so tempted to buy Pioneer Credit. CCP is a better buy for me. ROE is 23% for CCP, ROE of 14% for PNC. Cash Converters has ROE of -8%.

I like page 5:


> Significantly lower complaint rate per loan than either the credit card or personal loan averages reported by the EDR provider to mainstream credit product issuers.




I like Page 17: Update FY16 Guidance.

Hopefully I am looking at the right pages. Page 15 highlights their challenges.

Today's share price bounce from this report makes me happy. I didn't get the bottom but I was near enough. Thought I had to wait a long while before things turned around but under two weeks is great for me.

If I don't respond to any questions or posts, it is not because I am ignoring you: I am too uneducated to provide an adequate quality answer.

The best thing about this thread is that it has so many people I admire commenting on a great company that I can admire now. (Hopefully for a long while as well.) I have so much to learn.


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## Faramir (6 November 2015)

OK, I will try to explain myself better about the situation of Post #573. I admit that I suffered from FOMO. Last December, my alert was triggered off that CCP fell below $9. By the time I managed to gathered some funds together, CCP bounced back up and bounced up very quickly. I was convinced that I had definitely missed out throughout this year as report after report provided positive news and upgraded results. Then September showed a turn around in sentiment in this industry. Also two major US holders off loading their shares. As the price drifted down, I kept asking myself when will it bounce up again?? Finally I made my purchase Wed 28 Oct.

I had no ability to tell if CCP would fall further but I had no patience to wait for confirmation of an upward trend. I missed out last Dec. I suffer from FOMO. I believe good quality stocks such as CCP will always bounce up hard at the nearest opportunity. I didn't expect it today. My urgency was thinking "quick! Get in before it bounces beyond your reach!"

Maybe CCP will drift down more tomorrow? Next week? Next month?

I have emotions and why I let my emotions drive me silly??? I want to hold CCP for the long term. So why am I looking at small hourly movements when I know I am not trading this stock in the short term. Did FOMO get the better of me?? I guess today's news should settle my emotions down.

I have so much to learn. My emotions nearly robbed me of this opportunity. I think CCP achieved this years' high on my birthday 4 August. Thinking that this should have been my birthday present. Well, I hope I got it three months later.

If you believe that this post contributed nothing, you can always ask Joe to delete it. I won't mind.


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## craft (6 November 2015)

Faramir said:


> The best thing about this thread is that it has so many people.






Faramir said:


> If you believe that this post contributed nothing, you can always ask Joe to delete it. I won't mind.




Faramir - your posts add heaps. No one here knows the future. Everybody has to deal with their emotions in investing (unless they're a psychopath) and everybody is (or at least should be) on a learning path. - no different to you.  I value your posts and I'm sure others do as well, keep them up.


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## VSntchr (6 November 2015)

craft said:


> I value your posts and I'm sure others do as well, keep them up.



+1.

As for CCP, anyone interested would do well to listen to the AGM presentation:
LINK

It gets to the meaty stuff around the 25min mark...

This most recent update is the first time CCP have provided any sort of good news with regard to the US. Potential to get to break even - without the environment improving. One of the slides also makes reference to their global peers - and how CCP crushes them on all relevant metrics. 
Admittedly there may be other metrics not shown that the likes of Encore etc, will perform better on than CCP - however with Thomas Beregi openly stating that "We are not afraid of any giant peers"...."Size isn't everything, it's how you use it that matters" says alot to me.


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## ROE (6 November 2015)

craft said:


> Faramir - your posts add heaps. No one here knows the future. Everybody has to deal with their emotions in investing (unless they're a psychopath) and everybody is (or at least should be) on a learning path. - no different to you.  I value your posts and I'm sure others do as well, keep them up.




The more the merrier , I always try to learn and engage doesnt matter how trivial things are
I always manage to find something useful when someone speak.

like craft said everyone has to deal with their emotion when it comes to money and investing so dont make it any harder on yourself, just try to learn and engage so you you can make an informed decision. 

I dont post much these days I pop in every so often as I spend more of my time out side the internet doing other healthier things


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## Knobby22 (6 November 2015)

I have had to sell as I am building a house but am going to set up a geared portfolio.

The big concern with this company has always been the USA. If that starts to work well as it appears to be slowly starting to- then look out!  

Still interested.


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## Value Hunter (6 November 2015)

I have so much of my own and my parents wealth invested in CCP if it stuffs up it will be a big blow. I have confidence in the continued strong performance of the company.

As for CCP vs CLH, Credit Corp is able to increase purcahses despite the increased PDL prices and maintain returns because it has better productivity and is improving its productivity at a faster rate than Collection House.


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## galumay (6 November 2015)

The recent volatility in CCP is really a reflection of how thinly traded it is relative to its cap. What a roller coaster ride! A decent test of investor intestinal fortitude, and a good example of why not to look at the price very often when you hold part ownership is good businesses!

I picked up a couple of parcels plus the DRP so the SMSF has had a nice little kick along this week.


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## JTLP (14 January 2016)

Anybody still holding these?

Due to announce their FY results end of the month, they upgraded guidance in November, so hopefully another little surprise soon 

I did notice that the DRP is back in action now, anyone know why?


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## VSntchr (14 January 2016)

JTLP said:


> Anybody still holding these?
> 
> Due to announce their FY results end of the month, they upgraded guidance in November, so hopefully another little surprise soon
> 
> I did notice that the DRP is back in action now, anyone know why?



Holding. 
Looking forward to the result. Hopefully the strong business momentum continues. 
IMO the DRP has been reactivated as the company has good options to deploy growth capital.


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## tinhat (14 January 2016)

JTLP said:


> Anybody still holding these?
> 
> Due to announce their FY results end of the month, they upgraded guidance in November, so hopefully another little surprise soon
> 
> I did notice that the DRP is back in action now, anyone know why?




I just checked and I've been holding CCP for two years now. Bought in at an average price of $8.99 in December 2013. I haven't paid them much attention because they just tick all the boxes based on fundamentals - solid ROE, solid EPS growth (a healthy internal rate of return on retained profits) with a fully franked dividend (yielding me 7% grossed up), and yet, look at the share price. It got over $13.50 last year.


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## Muschu (14 January 2016)

This is a very small hold in my SMSF... Pension phase.

I am frequently surprised at the volatility of the SP on the back of no news.  Down 2.65% today - more than market average.


Are there external forces (manipulative) at play here?  I have no idea.  

Holding for now.


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## galumay (15 January 2016)

Muschu said:


> This is a very small hold in my SMSF... Pension phase.
> 
> I am frequently surprised at the volatility of the SP on the back of no news.  Down 2.65% today - more than market average.
> 
> ...




Its always been a volatile stock, its tightly held and thinly traded. CCP form a significant part of my SMSF, have learnt to ignore the volatility.


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## JTLP (28 January 2016)

Money for jam and just a fantastic deliverer for me. Set and forget


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## ROE (28 January 2016)

JTLP said:


> Money for jam and just a fantastic deliverer for me. Set and forget




Nice I am still holding


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## Faramir (28 January 2016)

Faramir said:


> I brought 228 shares @ $8.86 plus $14.95 brokerage. Being watching for a while. Over the last 14 or more months, I was wondering if I ever get an opportunity to get in. Finally I decided now is the time. Recent sentiment around these companies will turn around.




My 1st regret: not buying more! 2015 was a tough year for me. I only brought two stocks. SRX and CCP. 
2nd regret: not knowing anything about investing 5-7 years ago. That would have been a better opportunity to buy CCP.

To all long term holders: I worship your faith and wisdom in buying CCP all those years ago when things looked grim. How you all develop that insight into CCP? I have yet to learn.

I wonder how I can get involved with DRP since I am a very tiny share holder.


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## Muschu (28 January 2016)

JTLP said:


> Money for jam and just a fantastic deliverer for me. Set and forget




Kept these but foolishly sold TCL and SYD... Can't win em all...


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## galumay (28 January 2016)

JTLP said:


> Money for jam and just a fantastic deliverer for me. Set and forget




Indeed, topped up a couple times this year. Very happy.


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## Value Hunter (1 June 2016)

I last spoke to Thomas Beregi over the phone on 16th May 2016. He generally answers his own phone (unless he is busy or not around) and is very forthcoming and happy to answer questions from shareholders or prospective shareholders as is the CFO. I speak to him a few times a year and find him to be honest, trustworthy, conservative and able. Here are my notes from the conversation based on *my interpretation of what he said* (I have added my understanding based on previous conversations into the notes):

Productivity (in terms of average collections per FTE of collection employees)  improving across board in Phillipines, U.S. and Aus. Headcount in Philippines is around 220. 

They are not currently expanding at the moment in the Philippines as the site pretty much at full capacity physically so they would either have to move premises or open a second site. Also small balance debt purchases (e.g. Telco debt, etc) have not increased. The Philippines are primarily there to do certain tasks such as collect low balance debt, etc which is uneconomical to do with Australian collectors. However due to the language and cultural differences they are somewhat less effective at collecting higher value debts than Australian collectors (can expand on the reasoning behind this if anyone is interested). Credit Corp will reconsider expansion in the Philippines in future should low balance debt purchases increase or productivity in the Philippines increase sufficiently (it is still rising incrementally). Although this presentation (not on the ASX website) http://www.slideshare.net/informaoz/matt-angell-credit-corp is a few years old it does show that the expansion in the U.S. and Philippines workforce has been to some extent masking the strongly rising productivity of the Australian workforce. Refer to slide ten in the presentation. 

Consumer Lending: 90%+ of volume is for loans in excess of $2000. Car loan volume static at $10 million. Looking at ways to grow Car Loans. Cash loans also hitting growth limits. Google announced they will not accept adwords for payday lending (which they define as loans that are less than 60 days). However google may not actually enforce the announcement. Harder for Credit Corp to obtain new customers as they must be taken from existing micro and payday lenders (as they have to a large extent monetized there existing debtor database and also the micro-lending segment total growth has slowed). Thomas said that the TV ads surprisingly did implant Wallet Wizard in consumer minds, and that even now months after the TV ads have stopped a lot of people are still doing searches on google for "Wallet Wizard" specifically. 

Because they withdrew from shorter-term loans and the net returns on longer term products (due to a lower rate/fee being charged) are lower, as a result they are not advertising on TV anymore for now (hence the disappearance of the Wallet Wizard ads). They may revisit TV advertising in future. Customer acquisition strategy is focused on google search and general online advertising and from existing collections database. Also prime lender (large non bank financial plus peer to peer lending referring to them) referral service for declined (application for a loan was not approved) customers which is a relatively new development. 

A small pilot product for unsecured business loans up to 6 months is currently being tested. Showing promise so far but it is a risky business and Thomas is not convinced it will become a viable product. Disorganized and risky entrepreneurs tend to take these loans. Wait and see how it goes. Endeck from the U.S. has been operating for 10 years in the unsecured business lending segment in the U.S. and is not profitable yet but has entered Australia. Scottish Pacific which do mainly invoice factoring and discounting may possibly be looking to IPO in Australia. 

U.S. business will only expand marginally from current levels (and will be marginally profitable in 12-18 months) unless prices drop 10 – 15%. A 15% drop in U.S. PDL prices would allow a 20% return on equity in that business.

The business will get a further increased bank debt facility (U.S. debt for U.S. business and Australian debt for Australian business to manage currency risk) if growth is strong in all business segments and more capital is needed. Potentially once that is done more equity could be raised from the Australian share-market in a few years if necessary (i.e. growth is strong and bank debt has already increased to its prudent limits). Also if U.S. business becomes big enough in the future a dual/second U.S. listing could be considered. 

They currently pay around 1% (variable) interest rate for U.S. debt and 3-4% interest rate for Australian debt (variable).

In 3-5 years if they *may consider* consumer lending and PDL purchases in some countries in Europe depending on the growth in the Australian and U.S. businesses.


----------



## Value Hunter (1 June 2016)

I am very bullish on the company and stock in the long term and believe they can keep compounding e.p.s. at double digit rates over the long-term while paying good dividends. 

What is clear from conversations with people from Credit Corp (the chairman, multiple other directors, Thomas, the CFO, etc) over the years is the company:
-Has an unspoken philosophy of under-promising and over-delivering. 
-Is always piloting (in a tiny and measured way) new products and looking at new ways to expand long before informing the market of such. They are not complacently relying on favourable market conditions in existing operations to enable future growth. Rest assured they are always 2-3 years ahead in developing a plan b and c for growth opportunities should they not be available in their existing lines of business. 
-New growth opportunities are always tested in a small and measured way for an extensive incubation period (at least a few years) before they officially announce a move into a new product or market segment to the market. They were researching the U.S. 2-3 years before they officially moved into that market. They genuinely take a cautious and measured approach to expansion and risk management is front of mind.
-In terms of the quality of the management team compared to other ASX listed companies in my subjective opinion they would be in the top 2%. A major reason for CCP being my largest holding.


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## galumay (1 June 2016)

Thanks VH for the detailed info, they form a significant part of my SMSF and I have taken advantage of the volatility to top up at opportune times. They strike me as a well managed company who understand their business well. Happy to hold and have enjoyed the recent run!


----------



## Knobby22 (2 August 2016)

Good result.


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## bigdog (2 August 2016)

fantastic result

CCP  $15.400  +$2.000 +14.93% @ Tue 02 Aug 2016 10:40 AM 


*Media Release FY2016 Results Tuesday 2 August 2016
Highlights*

The directors of Credit Corp Group Limited (Credit Corp) are pleased to report a strong performance for the year to 30 June 2016. Key highlights are as follows:
● 20 per cent increase in Net Profit After Tax (NPAT) to $45.9 million
● Strong consumer lending segment NPAT of $6.1 million
● Record investment of $287.0 million to sustain growth
● Positive outlook across all businesses with FY2017 NPAT growth guidance of 13 to 18 per cent

1943


----------



## galumay (2 August 2016)

Thank you CCP, pass go, pick up another cheque, rinse and repeat. Great year.


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## ROE (2 August 2016)

Thanks CCP for another year of goodness, back to sleep


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## Faramir (2 August 2016)

Faramir said:


> My 1st regret: not buying more! 2015 was a tough year for me. I only brought two stocks. SRX and CCP.
> 2nd regret: not knowing anything about investing 5-7 years ago. That would have been a better opportunity to buy CCP.




On the bright side, CCP is one of my best performing stock. Thank you. Patience is a virtue. I hope I find another company like CCP (in terms of quality, management and original purchase price).

I look up to all of you wise people. I see the insights that you all have and I wish to learn.

Fear or caution is what stops me from spending more than 10% of my capital on a single stock. Even if I could read the future, I still would doubt if I would have brought more. Even if an angel or demi-God 100% guarantee a multi-bagger, I would hesitate to commit more funds. So I have no idea why I said I regretted saying "not buying more", when my instinct prevents me from doing so.

I organised to be part of DRP a few months ago. This should help me relax.


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## ROE (2 August 2016)

Faramir said:


> Fear or caution is what stops me from spending more than 10% of my capital on a single stock. Even if I could read the future, I still would doubt if I would have brought more. Even if an angel or demi-God 100% guarantee a multi-bagger, I would hesitate to commit more funds. So I have no idea why I said I regretted saying "not buying more", when my instinct prevents me from doing so.
> 
> I organised to be part of DRP a few months ago. This should help me relax.




10% in a single stock is a sensible risk management, protection of capital is just as important as getting a good return.


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## Value Hunter (2 August 2016)

I'm still holding the shares after many years and will be quite happy to hold on for many more years to come. The company has a history of beating its initial guidance.

For FY2017 the company guided:
-Basic EPS of between 109.7 - 114 cents.
-DPS 55-57 cents.

I think the company in FY2017 will generate at least 115 cents in fully diluted EPS and a dividend of at least 58 cents fully franked.

Today's closing share price was $15.15. Based on my above minimum estimates (I actually think earnings and dividends may even be higher than that) based on today's closing share price I project the forward dividend yield will be at least 3.8% fully franked and the forward p.e. ratio will be around 13 - 13.5 times. For a well managed company which is a market leader in its sector and has a strong growth trajectory, able and proven management team and a strong balance sheet this is still an inexpensive price.

If I had spare money today (I don't currently) I would certainly be happy to buy even more shares. I think the shares will be much, much higher in 6 or 7 years time.

Note: last time I spoke to Thomas Beregi some months ago he said the default rates on the consumer lending business were averaging 8 or 9% per annum. If you look at the notes to the annual reports you will realize not only are they upfront provisioning but they are arguably provisioning for a higher expected loss rate than what they are actually experiencing.  

Disclosure: Held


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## Value Hunter (13 September 2016)

The recent anouncement that CCP will purchase NCML from Thorn Group in my opinion will result in a profit upgrade at the AGM. I think  there will be some small synergies, but more importantly Credit Corp has much higher levels of productivity than NCML and they will be able to boost the productivity of NCML post acquisition. Also they paid a sensible price (book value) for the acquisition. I think it was a smart acquisition.


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## Value Hunter (7 February 2017)

After the latest half year result I had a phone conversation with the company CEO Thomas Beregi. Since Credit Corp has no investor relations department the CEO and CFO generally answer shareholder questions. They usually answer their own phones and are happy to answer questions and are honest and knowledgeable. Their contact details are at the bottom of the recent 2 page media release:

For more information, please contact:
Mr Thomas Beregi
Chief Executive Officer
Tel: +612 8651 5777
Email: tberegi@creditcorp.com.au

Mr Michael Eadie
Chief Financial Officer
Tel: +612 8651 5542
Email: meadie@creditcorp.com.au

Here are my notes from my recent phone conversation with the CEO Thomas Beregi

-Weighted average consumer loan duration (for consumer lending book) is around 20 months possibly shorter

-The U.S. PDL prices are already low enough for them to purchase and achieve their minimum return hurdle. They are waiting for their existing staff to become more experienced so they can promote more staff to management positions and then hire new entry level employees. It will therefore take up to 2 years to significantly grow the employee base to a size that will allow for large purchasing volumes (assuming U.S. PDL prices do not rise in the meantime).

-Staff productivity in the U.S., Australia and the Phillipines is still increasing. This increased productivity is primarily being used to dig deeper into the ledger books to collect older debts (hence a higher proportion of collections coming from older debts) rather increasing collections rate per hour.

-The consumer lending book on the back of Wallet Wizard and Clear Cash can grow to around $230 million AUD (eventually in the medium to longer-term) in the current environment. This would additionally supplemented somewhat by New Zealand where they are just getting started more or less. The other lending divisions e.g. Car-start, Credit2U, Trove Capital, etc are in pilot stage and may or may not add significantly to lending volume in the future. Trove Capital has experienced low default rates so far due to strict lending criteria and short lending duration. Carstart and Credit2U are not doing well so far and they are still trying to tweak the business model.

-The commission/contingency based collections (the bulk of which came with the NCML acquisition) will continue to be small and only grow incrementally as it is not a huge addressable market. At best under an ideal scenario, this segment could generate $5 million a year in NPAT in 5 years time. Hence they will not focus a huge amount of management attention on it.


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## galumay (8 February 2017)

Hi VC, thanks for the detailed summary of your phone call, interesting background to the report.

They have certainly been one of my better performers.


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## Boggo (10 February 2017)

It popped up on a weekly scan tonight, still another day to go. (I don't hold)

(weekly chart - click to expand)


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## Knobby22 (10 February 2017)

As a short? I really don't think it will fall much further. Bargain hunters will jump in. I have the share value as around $17 so a drop to $14 is possible I suppose.


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## Boggo (10 February 2017)

Knobby22 said:


> As a short? ...




No, comes up in a scan as a stop out.

Haven't tested it to see how it would fare as a short entry as that too would need a stop.


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## waverider100 (26 February 2017)

on support ready to move back up


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## galumay (26 February 2017)

Maybe, CCP is quite a volatile share, I just ignore the lumps and bumps, its close to another multibagger for me now and management just continue to under promise and over deliver. A very well run business that has some significant competitive advantage. I love owning businesses where I just have to check in twice a year and read the good news, pick up some more divvies and then rinse and repeat!


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## Knobby22 (27 February 2017)

Agree, one of my biggest holdings.
It took a while for the analysts to understand the business. I think it is reasonably fair value now, not super cheap as it has been for years.


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## Value Hunter (1 March 2017)

Its been my and my parents largest shareholding for many, many years now 

Not many companies in Australia that can increase earnings year in, year out the way Credit Corp does.


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## Triathlete (9 May 2017)

Now that CCP has broken through $18.50 we might get a run up in price....any other views on this stock?

*Weekly chart:*


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## Rypieee (9 May 2017)

Triathlete said:


> Now that CCP has broken through $18.50 we might get a run up in price....any other views on this stock?
> 
> *Weekly chart:*
> 
> View attachment 71032



Same thoughts on CCP triathlete Maybe tomorrow would be entry day. I know you're a SD Member as well so my other thoughts are SSM which i will be watching closely tomorrow, potential breakout for SSM on an ascending triangle/Horizontal Res.


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## Triathlete (9 May 2017)

Rypieee said:


> Same thoughts on CCP triathlete Maybe tomorrow would be entry day. I know you're a SD Member as well so my other thoughts are SSM which i will be watching closely tomorrow, potential breakout for SSM on an ascending triangle/Horizontal Res.




Yes I had SSM in my alerts as well for a break and close above $1.28......let us see what happens......


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## galumay (9 May 2017)

Triathlete said:


> any other views on this stock?




CCP has some very strong tailwinds, it seems to always under promise and over deliver, it has fantastic data algos that gives it a competitive advantage in the sector and CCP have avoided the payday lending end of the market. Good management, consistent growth and conservative capital management. Given the history it took the market quite a while to wake up to the real value in this business, I have held since they were sub $10 and accumulated steadily until they started running up.

It has entered the range of fair value I calculate for the business, but I wont be surprised to see that adjusted upwards next reporting season.


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## Triathlete (9 May 2017)

galumay said:


> CCP has some very strong tailwinds, it seems to always under promise and over deliver, it has fantastic data algos that gives it a competitive advantage in the sector and CCP have avoided the payday lending end of the market. Good management, consistent growth and conservative capital management. Given the history it took the market quite a while to wake up to the real value in this business, I have held since they were sub $10 and accumulated steadily until they started running up.
> 
> It has entered the range of fair value I calculate for the business, but I wont be surprised to see that adjusted upwards next reporting season.




Looks like you found a winner with this one.....from what I can see its returned 32% P/A last 5 years.


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## galumay (9 May 2017)

Triathlete said:


> Looks like you found a winner with this one.....from what I can see its returned 32% P/A last 5 years.




Yes, I bought in nearly 3 years ago, am up 100% plus 25% in dividends over the 3 years. (gross) 

If I can avoid anymore SGH's then I dont need many CCP's to make my returns look very healthy!!


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## pinkboy (10 May 2017)

galumay said:


> CCP have avoided the payday lending end of the market.....




.......Wallet Wizard......

pinkboy


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## galumay (10 May 2017)

pinkboy said:


> .......Wallet Wizard......




...is not a payday lender, nor is it in the realm of lending being investigated by ASIC in other similar businesses.


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## pinkboy (10 May 2017)

galumay said:


> ...is not a payday lender, nor is it in the realm of lending being investigated by ASIC in other similar businesses.




You're right and I do agree.

I do feel however a lender who will lend $500 @ 48% interest plus fees is still lightly predatory.

Personally like CCP as a business myself.

pinkboy


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## Tightwad (10 May 2017)

Great business, will be even better when the US starts firing, things have improved with pdl pricing there so will be interesting.

Have held since around $6, almost 10% of my folio


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## galumay (10 May 2017)

pinkboy said:


> ...is still lightly predatory.




Oh so elegantly put!


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## Klogg (10 May 2017)

pinkboy said:


> I do feel however a lender who will lend $500 @ 48% interest plus fees is still lightly predatory.




I couldn't disagree more. Find me a finance company that can perform adequare checks on the borrower, write loans, follow up on payments, and still make a sufficient return on capital employed.

The unfortunate reality of it is that such small loans require a much higher interest rate for the business to be viable. And if the business is not viable, it's not sustainable long term.
It's either loans @ those rates, or no loans at all really... I'm not sure which is worse.


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## pinkboy (10 May 2017)

galumay said:


> Oh so elegantly put!



Was meant to be 'slightly'. Went to edit later and locked out.



Klogg said:


> I couldn't disagree more. Find me a finance company that can perform adequare checks on the borrower, write loans, follow up on payments, and still make a sufficient return on capital employed.
> 
> The unfortunate reality of it is that such small loans require a much higher interest rate for the business to be viable. And if the business is not viable, it's not sustainable long term.
> It's either loans @ those rates, or no loans at all really... I'm not sure which is worse.




Could be worse. www.nimble.com.au is potentially 66%! 

Don't worry, I understand fully time and costs involved with fees for service and lending.  It's a lot of legwork to make a few points off a $500 loan.  ....but where there is a market, there will be a supplier.....

pinkboy


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## tinhat (10 May 2017)

I got out of CCP when I started seeing those Wallet Wizard ads on TV. I've missed out on quite a bit of upside since then. I also used to own TGA too but got out of that some while ago too. I'm steering my portfolio away from businesses that I find more questionable on ethical grounds. These are personal value judgements. I've been very long the big four banks for years now, more so the last year or so and their ethics are not without question.


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## Knobby22 (11 May 2017)

tinhat said:


> I've been very long the big four banks for years now, more so the last year or so and their ethics are not without question.



I stopped owning the four big banks for a few years now as I expected their behaviour to bite them through government action due to their poor behaviour. This latest tax vindicates my action and I am glad to own Bendigo and bank with CUA. I think CCP has more ethics than the big banks had a few years ago (but maybe the returns are colouring my thinking).


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## JTLP (30 June 2017)

What next for CCP? Pays a healthy dividend, however seems to hover between 17 and 19 and not really going anywhere. Will there be a catalyst for movement?

Collection House has been on the nose but Pioneer Credit are moving up lately.


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## galumay (1 July 2017)

CCP has had a pretty strong rerating over the last couple of years, I bought most of mine at around $9 not that long ago. I think the run up from there has brought CCP much closer to a price that reflects it's value. 

Given that CCP has a long history of under promising and over delivering, the next catalyst is likely the reporting for the FY.


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## JTLP (2 July 2017)

galumay said:


> CCP has had a pretty strong rerating over the last couple of years, I bought most of mine at around $9 not that long ago. I think the run up from there has brought CCP much closer to a price that reflects it's value.
> 
> Given that CCP has a long history of under promising and over delivering, the next catalyst is likely the reporting for the FY.




It seems to run up to that point but then results come, add some decent news then chops between the $16 and $19 mark. Feel like we need something bigger to happen...


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## hiddencow (6 July 2017)

There is plenty happening with CCP if you look beyond the chart.
Profits from the lending business are starting to flow through strongly and this will continue into FY18 providing the basis for further strong profit growth.
Domestic PDL market is looking good, probably helped along with CLH's demise.
The US PDL is the biggest opportunity for further strong growth. Should be at break even point now and if CCP can succeed there then you will see it reflected in the share price.


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## Muschu (21 July 2017)

Any thoughts on what is behind the 4.5%+ drop today on the back of no announcements?  I know the price of CCP does fluctuate but not by this much usually..... 

Opinions welcome.


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## JTLP (21 July 2017)

Muschu said:


> Any thoughts on what is behind the 4.5%+ drop today on the back of no announcements?  I know the price of CCP does fluctuate but not by this much usually.....
> 
> Opinions welcome.




Morningstar cut their recommendation to hold with a price target of $19.35. Seems a little strange when the SP is under shooting their target but eh, market does what it does. I'll be looking to add if it drops to the low 16s. Good divvie and consistent growth.


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## Muschu (21 July 2017)

Thanks JTLP.... somehow that new recommendation is having a whopping impact... Now down over 6%.... Very tempting!


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## Muschu (21 July 2017)

Succumbed and added at $16.76....


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## JTLP (1 August 2017)

Muschu well timed entry. These guys surprise year in year out, which shouldn't really be a surprise anymore.


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## skc (1 August 2017)

JTLP said:


> Muschu well timed entry. These guys surprise year in year out, which shouldn't really be a surprise anymore.




The numbers this year appear solid and the forecast for FY18 also in line. But the PDL budget for next year is pretty low. I think the market has partly assumed that this will be revised upwards through the year, other wise CCP could be looking at a lean FY19?


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## JTLP (1 August 2017)

skc said:


> The numbers this year appear solid and the forecast for FY18 also in line. But the PDL budget for next year is pretty low. I think the market has partly assumed that this will be revised upwards through the year, other wise CCP could be looking at a lean FY19?




Good pick up. If you look back at their results, they talk about not purchasing PDLs when they come expensive etc, but always seem to pull a rabbit out of the hat come results and have made in roads in this regard. They're also an efficient bunch, so maybe they're also squeezing more out of the current?


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## galumay (1 August 2017)

For me part of the attraction of CCP was not just the discount to value when I built most of my position in the low $9's, but the quality of management, their communications are clear and always conservative. The old saying under promise and over deliver has become their motto. 

Of course the real test of management mettle is when it looks like things will not be so positive, if they are still under promising then we will now just how good they are!

I took some profit off the table this year, but still hold a core position.


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## Tightwad (1 August 2017)

i've held since about $6, itching to take some profit off the table if we get back to previous highs.  hopefully there's still some growth to come, bit concerned it may be cyclical.


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## Value Hunter (6 August 2017)

The latest result was pretty good. Given the U.S. is now profitable (and PDl prices there are reasonable) and they can ramp it up there is no way that they will only purchase $170 million in PDLs. If anything I am expecting a record year of PDL purchases. I think they are just being very conservative.

Also the consumer lending business should put in very strong growth numbers again. Overall I am expecting them to revise up their guidance during the financial year.

I would expect fully diluted e.p.s. of at least $1.35 per share, maybe more.


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## Value Hunter (5 November 2017)

The recent AGM announcement was food and as expected they announced a profit upgrade.


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## Knobby22 (6 November 2017)

Value Hunter said:


> The recent AGM announcement was food and as expected they announced a profit upgrade.



Yes, very happy. Radio Rentals are in trouble and getting their loan folio at a good price as a great opportunity.


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## Faramir (2 February 2018)

From the Momentum Thread Part 2. I have never quoted from another thread, let alone from a completely different section and topic before. I hope this works.



peter2 said:


> Update:  Notice to remind all short term traders that the reporting season has started again.
> Here's a current example. CCP chart shows a great looking BO, buy it at 23.5, iSL at 22.5. Easy.
> 
> View attachment 86074
> ...






peter2 said:


> We avoided that break-out trap.
> 
> View attachment 86091




There was a drop of 5% on that day. Yet the news was an increase in profit.

@peter2 , even though I did not comment on your thread. I must thank you for your hard work. Since I am a completely different person from your main audience and have completely different objectives. I still enjoy your Part 2 over the past 3 years.

I really want to top up. I only made a small purchase with limited funds at around $8.97 I think. What is a break out trap to many people, is a dip I am looking for to top up. The 12 month low is around $16 but I didn't have much funds back then OR I was busy helping my partner with her health stuff.

CCP is a great company to me and my second 100% plus gain. I still believe that they will make it big in US. I guess I am waiting for my SRX funds to come in before I top up but the decision is when????

Most stocks Peter2 mentioned are ones I have never heard of nor would think about. So the way you scan for them must be fantastic. So I was stoked that you mentioned CCP. Anyway, thanks for the mention. I am not a trader (yet), nor am I active as I struggle with other aspects of life. I hope it's OK that I say thanks even though I am from the dark side of ASF.


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## peter2 (2 February 2018)

@Faramir  Thanks I enjoyed reading your post. I really admire long term investors. You've all the patience that I haven't. "Dark side" not to me. We're all trying to growth our capital and using different styles. To be successful we have to do the same things, control our risk and let the winners get big enough to pay for all our losers. 

I will admit to trying to be a longer term trader but it doesn't feel right for me. I feel OK trading ETF's over the medium term (4 - 12 mths) and I buy GEAR when there's a solid market dip as I know the index will always bounce. 

As for CCP, that was a scary little break-out failure for a short term trader but a great dip for others. I even read the report and thought it wasn't bad also. Price dumped hard, so what do I know about FA.


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## galumay (2 February 2018)

I think what the fall in CCP showed is just how used the market is to CCP under promising and over delivering. It was a good half yearly, just didnt exceed expectations sufficiently. Like you, @Faramir I have held since the low $9, i have sold down a couple of times to free up some capital for other positions - in all cases I would have done better just leaving all the capital in CCP!

I thought it was a good opportunity to top up if someone was trying to build a position.


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## Knobby22 (2 February 2018)

I'm been in these ages also. Now my third largest holding.
What I saw was that competition in Australia is increasing so it will be hard to increase profits as massively. the US operations are now profitable. their retail credit stuff seems to be working well and they feel they have an advantage over competitors.
Not concerned.


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## Value Hunter (4 February 2018)

To me the good thing in the result is that it shows their continued discipline. Australian ledger prices went up so they reduced there purchasing levels in response. You should be worried if a company fails to show this kind of discipline.

Besides now that the U.S. is profitable and ramping up and the consumer lending division still has lots of headroom for growth they don't need all three divisions to be firing at once to show growth. In any given year even if only 1 out of 3 divisions shows strong growth and the other 2 flat line they can still produce a solid result.

Also I like how they are always trying stuff and developing new lines of business and new technology/back end improvements (but without making projections or over-hyping the situation). I think we will start to see results from some of the pilot stage businesses (car loans, small business lending, etc) within the consumer lending division over the next 18-24 months.

Its still my largest stock position by far.


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## Value Hunter (4 February 2018)

The thing that nobody has talked about is that in 5 years time once the U.S. business hits sufficient scale they could start up a consumer lending business in the U.S. as the first customers would come from cross selling to the database of existing debtors (after they have repaid their defaulted loans) from the U.S. debt collection division.


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## galumay (21 June 2018)

CCP in a trading halt today, apparently as a result of an "anonymous report." This seems to be the report in question, 



looks like someone with a big axe to grind, (37 pages, you would have to HATE CCP to make that much effort!), there appears to be no such organisation as Checkmate Research, but if they havent hidden their tracks really well I suspect they will have a very expensive law suit on their hands!

Could be short sellers trying to create action? Not sure how CCP got to it so quickly, before any damage to the SP, maybe they were tipped off?


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## omac (21 June 2018)

So you want the shorts to make an argument with fewer pages and based on less evidence? Kind of catch-22 reasoning there.

They make some interesting arguments, some of the evidence appears a little flimsy (internet opinions - can always find dissenters on the internet) but kind of hard to mis-represent the overly smooth margins and the wallet wizard stuff is a potential grey area. Will be interesting to see the CCP reponse.


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## McLovin (21 June 2018)

galumay said:


> looks like someone with a big axe to grind, (37 pages, you would have to HATE CCP to make that much effort!),




...Or just have a big short on CCP. I only skimmed the report but they raise some valid/interesting points around payday lending and the CCP accounting (which has been discussed here ad nauseum).


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## Faramir (21 June 2018)

I hope they get sued!

I got lost after a few pages. Maybe I can’t read anymore but it sounded like dribble to me.

Will this be a buying opportunity? I regretted not buying more in my original purchase.

Maybe I am reacting too emotionally. Maybe the saying “this will soon pass” is definitely appropriate here.


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## omac (21 June 2018)

Faramir said:


> I got lost after a few pages. Maybe I can’t read anymore but it sounded like dribble to me.






Try harder, your capital is at risk.


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## JTLP (21 June 2018)

McLovin said:


> ...Or just have a big short on CCP. I only skimmed the report but they raise some valid/interesting points around payday lending and the CCP accounting (which has been discussed here ad nauseum).




I thought CCP had shaken the dark days of their bad management which took them down to 60 cents? Anyway this is an interesting one, can’t find anything on checkmate (not to say they don’t exist) but will definitely hurt the SP once relisted. People don’t like uncertainty and clouds hanging over a stock (factual or not). Hopefully management have a strong response.


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## McLovin (21 June 2018)

JTLP said:


> I thought CCP had shaken the dark days of their bad management which took them down to 60 cents?




Sure, they're totally different. But the reported earnings of CCP and any debt collection is business is at best an educated guess by management based on the, undisclosed, amortisation profile of the PDLs. It's pretty easy to play around with the amortisation to smooth out earnings. (I'm not saying CCP are doing that)


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## Klogg (21 June 2018)

McLovin said:


> ...Or just have a big short on CCP. I only skimmed the report but they raise some valid/interesting points around payday lending and the CCP accounting (which has been discussed here ad nauseum).




Any debt purchaser will have some very difficult accounting choices - I can't really see a good way of structuring it that allows for shareholder confidence, unless you go super conservative and only show revenue when cash is received (just follow cash flows essentially). To me, the accounting standards aren't really an issue.

The real problem is Wallet Wizard. They're correct in pointing out that they are essentially a Payday lender, with the only point of differentiation being that they define the loan as a 'continuing credit contract'. Seems like a loohope that ASIC would love to jump on.
Furthermore, FSA have recently been fined for 'potentially misleading advertising'. If you read the fine, it's a bit of a joke. CCP on the other hand have been using payday loans as a Google adword, but are technically not providing payday loans, at least not according to them. Seems a great place for the regulator to earn back some of the trust that was lost during the RC.

Finally, as for the constants defined in the client side code, that's a bit of a joke. Just because a few strings have descriptions assigned to them, it doesn't mean that's the business logic applied underneath. It's possible, but it's also possible these rules have changed hundreds of times and nobody bothered to change the constants defined because it's essentially unused. Sloppy coding at worst IMO.


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## JTLP (21 June 2018)

Nick Fabrio (@longhorncapital) in Twitter makes an interesting observation. The gist of it is Checkmate twitter handle created in May 2018. 20 followers. Why is a near 1b company responding to this? He thinks it’s a red flag...


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## galumay (21 June 2018)

JTLP said:


> Why is a near 1b company responding to this?




I dont think they had any choice but to respod to it, if as it looks its a anonymous vendetta of some kind, it would still have a material effect on share price once it was in the public arena, CCP are obliged to respond. If it were actual research and the content was factual, they would still be obliged to respond. 

I cant imagine a scenario in which they could just ignore it.

Personally I dont think the Wallet Wizard business is a problem - but thats just based on my knowledge of the extent CCP went to get clarity on this with the regulators. They genuinley believe they have been given the all clear on the stucture of this part of their business. 

It will be interesting to see what is exposed about the motivation of these anonymous 'activists'


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## JTLP (21 June 2018)

galumay said:


> I dont think they had any choice but to respod to it, if as it looks its a anonymous vendetta of some kind, it would still have a material effect on share price once it was in the public arena, CCP are obliged to respond. If it were actual research and the content was factual, they would still be obliged to respond.
> 
> I cant imagine a scenario in which they could just ignore it.
> 
> ...




I’m not so sure to be honest. Imagine how many times people have hashed together a “BHP did this” or “CBA did that” report / website; it’d happen more often than not. 

I hold CCP (have done for a long time) but I think there may be a little more to it then is what’s been led on.


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## galumay (21 June 2018)

JTLP said:


> Imagine how many times people have hashed together a “BHP did this” or “CBA did that” report / website; it’d happen more often than not.




Maybe, I cant remember seeing a hatchet job like this done on BHP or CBA though, especially from a non existent research company! 37 pages, a target price of $10 down from nearly $20, calls for banks to withdraw support, some pretty wild speculation - thats new ground to me. 

As I say, the most interesting aspect may be if the motivations for such devious effort is uncovered.


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## galumay (21 June 2018)

Reading further the two things that stand out for me that suggest this is the work of a slightly deranged and obviously malicious party are the call for WBC to withdraw their support - thats not a normal part of analysis, and the crazy DCF calculation which seems calculated "on the basis of the company being wound up (effectively) over 6 years and making no new loans nor purchasing any more ledgers?"
(thanks to @Saintly96 on twitter for picking that anomaly up.)


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## JTLP (21 June 2018)

galumay said:


> Reading further the two things that stand out for me that suggest this is the work of a slightly deranged and obviously malicious party are the call for WBC to withdraw their support - thats not a normal part of analysis, and the crazy DCF calculation which seems calculated "on the basis of the company being wound up (effectively) over 6 years and making no new loans nor purchasing any more ledgers?"
> (thanks to @Saintly96 on twitter for picking that anomaly up.)




I’m playing devils advocate here. You need to sometimes to back your investment judgement =)


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## galumay (21 June 2018)

I appreciate it @JTLP, its easy to not critically think about businesses you are invested in. 

For me the downside is not great here, most of the 'report' is obvious nonsense, but even if there were some ramifications for CCP its hard to see them being more than fairly short term. I have held since $9 odd and sold quite a lot along the way so a short to medium term drop in price wouldnt concern me too much. CCP have been particularly good at under promising and over delivering over a long time frame. 

Even if this reports thesis was 100% accurate, his target price is $10 - so I would still be in profit on my remaining holdings in the business. 

My interest is much more in what motivated the aggrieved party to go to so much effort to discredit a very large and successful business! Thats a serious obsession.


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## Faramir (22 June 2018)

@omac I did read the report again. Highly emotive and its shorting agenda just simply stands out. I actually think the report is deformatory. Sorry that I can't add more as others have already commented. I actually think the management will shoot this down in flames. Can't see how anyone would believe this dribble.


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## Faramir (22 June 2018)

I just thought of something so simple: think of the top 20 or so holders, think of all of the research that goes into a mid-cap. If a tiny bit of this report is true, wouldn’t someone raise these issues quietly first. Wouldn’t this be addressed over a period of time and some holders withdrawing slowly.

Issuing a slam dunk report so that their short positions can benefit deserves the full wrath of lawyers chasing those author/s.

I know there are many cases where black swan events can knock down the share price but a “report” like this doesn’t deserve any attention.


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## Faramir (22 June 2018)

Response came out half an hour ago.

This response is much easier to read than that b#}{##}{ report. Trouble is: perception of the general masses, not of those who thoroughly read both “report” and response.  Not of those who follow CCP but the impatient and reactive punters. The report had already achieved its aims unfortunately: put CCP into the spotlight poorly. Even though I congratulate CCP for such an excellent response, the ‘punting public’ would of read the first page of the report with the sheep/wolf picture and a caption $10 target and no more. Made up their minds and not give this response a chance.

Someone in CCP should find the author and sue for defamation. Imagine if every decent stock was attacked like this and all of the bad ones were left alone.

Short term voting machine in action today. This is not a black swan event. This is a defamatory report. Every other person puts their name on any buy or sell recommendations. Why remain anonymous? You, the author, have achieved your aims, you seriously a deserve punch in your face or at least deserve to be sued. If we shut down this type of lending in this industry sector - just tell desparate people to borrow money from the mafia instead. You singled out CCP but you means as well say they are all just as bad as each other. No, just single out CCP so that your shorts can profit. Real numbers will burn your shorts soon.

That response included a profit upgrade.


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## galumay (22 June 2018)

CCP response out, pretty clear there is no basis for any of the claims in the anonymous and defamatory 'report'. A great opportunity to add to my position at a healthy discount due to the investors who decided to sell. 

Will be interesting to see if anything can be proved, potentially the writers of the nonsense have made a significant windfall from very illegal action. They will need to have covered their tracks very carefully.


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## galumay (22 June 2018)

Faramir said:


> the ‘punting public’ would of read the first page of the report with the sheep/wolf picture and a caption $10 target and no more. Made up their minds and not give this response a chance.




To be fair Faramir, there will be a range of reasons for selling today, given the strong rise in CCP over the last few years, many selling today would still be banking a huge profit, and they may simply have decided the risk associated with the business model was not worth continuing to hold. Others will for the view that there is still a possibility of more bad press and its better to book a profit now rather than have the SP fall further later.

I am sure there are also some like you describe who simply panicked and sold without any real understanding - and they probably buy with the same mindset!


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## luutzu (22 June 2018)

galumay said:


> To be fair Faramir, there will be a range of reasons for selling today, given the strong rise in CCP over the last few years, many selling today would still be banking a huge profit, and they may simply have decided the risk associated with the business model was not worth continuing to hold. Others will for the view that there is still a possibility of more bad press and its better to book a profit now rather than have the SP fall further later.
> 
> I am sure there are also some like you describe who simply panicked and sold without any real understanding - and they probably buy with the same mindset!




Maybe they sold off because they read CCP's report saying it is "ethical", honest. 

Not a "pay day lender" at all your honour. We're just competing against payday lenders. And our loan repayment cycle just happen to coincide with their pay. 

And our rates are nowhere near those blood suckers'... why it's only 12.99%p.a (excludes other fees and other charges)

See, we could make a lot more money, just we're nice and ethical so it's a measly 13%.


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## notting (22 June 2018)

luutzu said:


> Maybe they sold off because they read CCP's report saying it is "ethical", honest.
> View attachment 87920



I don't think the ethics is the focus.  Most people are in business to make money hence it's the numbers which are all in place.
A rather spectacular way to  test the weekly $16 support however.
Unfortunately I wasn't paying attention and would have loved to get some at that 14 ish coiled spring!
Anonymous slurs are usually great buying opportunities. So called credible news outlets that peddle them however should be held to account!


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## Value Hunter (24 June 2018)

The report which was obviously from a short seller lacked credibility. It referred to a few twitter posts made by customers/nobodies! Also it made far too many assumptions without actually proving anything. I've never heard of an anonymous short seller report that was credible. Short sellers that are actually good at what they do (e.g. Glaucus, Jim Chanos, etc) actually put their name to the reports and stand by them. There is a reason why the report was anonymous.


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## Knobby22 (25 June 2018)

Hoping to buy some cheap shares today. Not to be.


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## JTLP (31 July 2018)

Another solid result by these guys. Fell sharply now doing well, up 6%. Good divvie maintained too.


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## galumay (31 July 2018)

Good result and as usual a conservative outlook. Wont be surprised to see CCP hit $25 later this year. I wll update my IV calculations tonite and see what my range of value is going forward.


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## galumay (31 July 2018)

Just crunched the numbers, its not an easy business to value IMO, but my mid range of valuation is around $22-24, so I am comfortable continuing to hold.


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## Value Hunter (17 October 2018)

The share price today fell 9.2% to close at $18.85 on seemingly no news when the All ordinaries was up today. Rather curious.


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## peter2 (17 October 2018)

When informed about the possible inquiry into "debt vultures". After noting the price drop on APT I checked Z1P, then CCP.


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## Value Hunter (18 October 2018)

https://www.smh.com.au/business/ban...s-to-face-senate-inquiry-20181016-p50a1b.html

This appears to be the culprit for the share price decline. I think if regulation does tighten it will benefit Credit Corp in the long term as they will take market share from other companies that are less consumer friendly.


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## Klogg (18 October 2018)

Does anyone know where I can find the terms of reference, on the senate website?

Struggling to find it.

On CCP: They've always claimed to not be payday loans, as the line of credit is persistent (I think that's the argument). As such, they may escape this completely.


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## galumay (18 October 2018)

I am not sure they have released a detailed terms of reference yet. CCP are not a payday lender under the current definitions, but such an enquiry might broaden the definition so I think the risk is real for CCP. 

It presents an interesting dilemma, its a great opportunity to increase position size if one has conviction that they will escape any punative legislative impact, but very difficult to work out a valuation if they are impacted.


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## Knobby22 (29 January 2019)

Credit Corp results were better than expected up 13%. Every parameter looks better.
The Wallet Wizard product which is way cheaper than the heavily advertised Nimble is also going very well. Another competitor to the banks who will rip off the consumer much more for a small loan. Once again its the savvy millennials who take advantage of the lower rates.

I own only a few Bendigo Bank shares and wonder if I should be selling these.

My second largest holding these days.


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## galumay (29 January 2019)

Yep, consistent operators on the principle of under promise and over deliver.


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## Knobby22 (21 February 2019)

Gee, market is jumpy.
Director with 5 million shares sells 5 thousand and the price drops $1.


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## JTLP (21 February 2019)

I think it’s to do with the senate enquiry in to payday loans. Look at APT.


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## Value Hunter (2 April 2019)

Who is going to participate in the Share Purchase Plan? I will be taking up my full entitlement.


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## galumay (2 April 2019)

I am still thinking about it, its not a huge discount, and I wasn't looking to build my position any further - but I am tempted!


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## Knobby22 (2 April 2019)

Yea, I own a lot already, not sure how many more I want.


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## Faramir (2 April 2019)

I don't have enough shares but also limited funds. As @galumay said, there's not enough discount. Plus is there a chance we could get a better price on the Open Market if there's a sudden dip for any reason???? I do want more shares. I can't regret not buying more in my initial purchase because I didn't have any more funds. I can only regret not doing my research properly.


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## JTLP (4 April 2019)

Will definitely be buying more. If they’re at $20.50 or so you’re already up a good chunk. Market reaction has also been very positive. 

However they’re only raising $10m from shareholders (tokenistic as they don’t really need it) so you’ll probably end up with an extra 10 shares.


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## Knobby22 (10 April 2019)

JTLP said:


> Will definitely be buying more. If they’re at $20.50 or so you’re already up a good chunk. Market reaction has also been very positive.
> 
> However they’re only raising $10m from shareholders (tokenistic as they don’t really need it) so you’ll probably end up with an extra 10 shares.




$20.45 a share. hard to resist, unfortunately I am fully bought at present, have to sell something. Decisions, decisions...  maybe scrape together $500 as after as you say we are unlikely to get many.


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## galumay (16 April 2019)

mmm...its getting more compelling, on todays close the SPP represents a 14% discount, thats not to be sneezed at, assuming the SP holds around this level.


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## Value Hunter (20 April 2019)

Personally I think the way the board of directors has run the capital management of the company has been suboptimal:

1) Firstly they have been frequently issuing stock options to management and thus diluting shareholders. A quality growth company like this should be paying its management bonuses in cash or buying shares on market and escrowing them as rewards for executive options plans rather than diluting shareholders by issuing new shares.

2) From time to time they have done Dividend Reinvestment Plans (DRPs) which were not necessary and diluted shareholders.

3) The dividend payout ratio has generally been around 50% which is far too high for a growth company like this. If they had a lower payout ratio from the start they would have less debt (and more equity) on the balance sheet now and would have been able to fully fund the current investment program without a capital raising.

4) Even with the current balance sheet given how much headroom the company still had under existing debt facilities and how much they were able to increase the debt facilities recently they would have been able to fund their investment program without the capital raising by taking on more debt (in the short term) and permanently lowering the dividend payout ratio to something like 20%

5) The capital raising was done in an unfair manner. Instead of allocating so much to institutions they could have issued less to institutions and had a renounce-able fair pro-rata rights issue for retail shareholders. Instead the retail shareholders got a share purchase plan capped at $15,000. What if you are a retail shareholder who owns $500,000 of shares in Credit Corp? You get diluted is what happens.

6) The board and management should stick their hands in the pocket and buy more shares in the company. Insider ownership of the stock is low.

When you are a dog company like Telstra or Qantas, issuing shares for various reasons is not a big deal, but when you are one of the great growth stocks like Credit Corp, Seek, CSL, Cochlear, ARB Corporation, etc you should be keeping a lid on shares outstanding as any shares issued today will prove costly in the long run to shareholders.

All of the above being said overall CCP is still a well managed company and its capital management and track record is still better than 95% of companies listed on the ASX. They invest money wisely, they keep the balance sheet strong, they don't make dumb overpriced acquisitions, etc. But I am just pointing out their is still a lot of things that could be better.

And for what it is worth even if the retail share purchase plan exceeds their $10 million target I think they will accept the extra money rather than scale it back.


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## galumay (22 April 2019)

Dont disagree with you assessment Value Hunter, but as you say, capital allocation/management is generally at an appalling standard in ASX businesses. Very rarely are the incentives for management aligned with share holder interests (options being an obvious example), capital raisings notoriously favour institiutional investors with almost no consideration of retail investors, dividends are far too often paid ahead of value adding share buybacks and too few directors have real skin in the game.

As you pointed out, plenty of room for improvement.


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## Value Hunter (23 April 2019)

Here is a good article written a while back about Credit Corp for those who are not too familiar with the company it gives a good overview.
https://wholesaleinvestor.com.au/creditcorp-consistently-under-promising-and-over-delivering/

Although there are some figures in the article which are arguably disputable. For example in the article it says "They operate by purchasing overdue ledgers mainly from the banks; they pay close to 20 cents in the dollar on the face value of the loans and generally collect 60 cents over the next four to five years." While the 20 cents on the dollar figure is somewhere in the ballpark the 60 cents worth of collection is arguable. if you go back and look at some of their older presentations the company talks about an approximate 2.3 times revenue return multiple over the life of the loan (albeit their is a little bit of residual still collected after the debt has been fully amortized). 

You are looking at something maybe around 46 cents plus a little bit of residual so perhaps something around 50 cents or slightly higher in total. Not quite at the 60 cent level. 

From my understanding of speaking to management a while back no way the "residual" would be enough to push you up from a 2.3 times revenue return multiple to a 3 times revenue return multiple. As fro the 40% market share figure that fluctuates substantially from year to year due to the nature of the business.


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## Knobby22 (23 April 2019)

Value Hunter said:


> Personally I think the way the board of directors has run the capital management of the company has been suboptimal:
> 
> 1) Firstly they have been frequently issuing stock options to management and thus diluting shareholders. A quality growth company like this should be paying its management bonuses in cash or buying shares on market and escrowing them as rewards for executive options plans rather than diluting shareholders by issuing new shares.
> 
> ...



I hope you are right and they won't scale it back. 

I note in the offer document that they state they may scale back based on the size of your shareholding.
This suggests that if you only own say $10,000 worth you may be unlikely to get another $15,000 worth.

We will see.


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## rnr (24 April 2019)

Value Hunter said:


> Here is a good article written a while back about Credit Corp for those who are not too familiar with the company it gives a good overview.
> https://wholesaleinvestor.com.au/creditcorp-consistently-under-promising-and-over-delivering/
> 
> Although there are some figures in the article which are arguably disputable. For example in the article it says "They operate by purchasing overdue ledgers mainly from the banks; they pay close to 20 cents in the dollar on the face value of the loans and generally collect 60 cents over the next four to five years." While the 20 cents on the dollar figure is somewhere in the ballpark the 60 cents worth of collection is arguable. if you go back and look at some of their older presentations the company talks about an approximate 2.3 times revenue return multiple over the life of the loan (albeit their is a little bit of residual still collected after the debt has been fully amortized).
> ...




Hi Value Hunter,

The collection of 60 cents includes the 20 cent cost of the loan leaving a profit of 40 cents plus a little bit of residual, say 6 cents, which brings you to a 2.3 times revenue return.

Cheers,
Rob


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## Value Hunter (25 April 2019)

rnr I think you are mistaken. My understanding is that the 2.3 times revenue return multiple is inclusive of original capital invested.


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## rnr (25 April 2019)

Value Hunter said:


> rnr I think you are mistaken. My understanding is that the 2.3 times revenue return multiple is inclusive of original capital invested.




It would help if you put up some calculations to show how you arrive at up your conclusion.

As per the quote provided the cost base is around the $0.20 mark. I will leave the rest up to you.


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## JTLP (26 April 2019)

Anyone got their papers yet?

What’s the BPAY number? I haven’t got anything and the website is skint.


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## Knobby22 (26 April 2019)

JTLP said:


> Anyone got their papers yet?
> 
> What’s the BPAY number? I haven’t got anything and the website is skint.



Didn't get it in the mail or electronically? Got it long ago. You better follow up.


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## rnr (29 April 2019)

Looks to me like a symmetrical triangle is forming/has formed which would possibly indicate that a breakout is imminent.


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## galumay (30 April 2019)

Well I bit the bullet and put in my SPP, the discount was too good to ignore. Will be interesting to see how much of a scale back there is.


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## Knobby22 (2 May 2019)

I have never seen an SPP so far below the current share price like this (about $17%).

The SPP price is $20.45 while the present price is about $24. I think the scale back may be massive unfortunately.


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## Knobby22 (7 May 2019)

SPP amount to be increased to $15 million from $10 million.
Scale back will be pro rata. I have a feeling we won't get many.


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## galumay (7 May 2019)

Yes, its only around 700k shares, hopefully there are lots of lazy people that forgot to put in, didnt have the spare cash, or didnt bother to work out the arbitrage between SPP price and current price.

Have to think the price will come under some pressure then the new shares start trading!


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## Knobby22 (7 May 2019)

0.391 scale back.

As I had only $5000 spare I will get 95 shares at $20.45. $1942 worth.

Those who managed to find $15,000 will received 286 shares (assuming they scale down). $5865 worth.


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## galumay (7 May 2019)

I put in $12k, so will end up with, 229 extra shares. Oh, well some capital to find a new home for!


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## JTLP (7 May 2019)

I didn’t get any. Stupidly made a keystroke error and didn’t meet the threshold for application. They only told me after it closed.


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## Knobby22 (16 May 2019)

When are they going to give the remainder of the money back? It's been a week.


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## galumay (16 May 2019)

I have had mine back since last Friday, already re-invested elsewhere!


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## Knobby22 (16 May 2019)

That's a worry


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## JTLP (21 June 2019)

This has been an absolute juggernaut lately, up to $27 which is an ATH I believe? Still can’t believe I also didn’t get my shares in the SPP, holders are up 35% already. 

Anyway, is it the low interest rate environment driving this? More credit uptake? Or are people expecting a big result / market update? This has been a bit the rumour, sell the fact on many an occasion. 

And finally, this today became a 10 bagger from the days of $2.72 when I purchased. Wonderful stuff.


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## galumay (22 June 2019)

Yes, its certainly been swept along by the general market euphoria since the SPP, pity we were not able to get more of the allocation!


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## Knobby22 (24 July 2019)

Closed at $27.56, a new high.
Perfect company to own, good dividends, expanding market, overseas income, good management, good growth and also some blue sky.


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## galumay (24 July 2019)

Its been a nice week for a few of my bigger holdings! CCP & DDR doing very well.


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## bigdog (29 July 2019)

ASX announcements today





Motley Fool reported
The *Credit Corp Group Limited* (ASX: CCP) share price has dropped 6% to $24.88 following the release of the debt collector and receivables company’s full year results. Those results appeared to fall well short of expectations and led to many investors hitting the sell button today. Credit Corp posted a 9% increase in net profit after tax (NPAT) to $70.3 million in FY 2019 and provided guidance for NPAT of $75 million to $77 million in FY 2020.


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## galumay (29 July 2019)

Bigdog, do you ever have an opinion on anything? All you ever seem to do is post the whole transcript of online articles that are freely available to anyone who cares to read them! Perhaps you could reflect on whether that actually adds anything to ASF? 

If I wanted to read the waffle Motley Fool write, I would go to their site, I come here to read what the members of ASF have to say.

Mr Market presented a great opportunity for anyone building a position in CCP, with a solid fall of about 7% after releasing their financials for 2019. I suspect it was the guidance of fairly soft numbers for 2020 that scared the irrational Mr Market. Anyone familiar with CCP would know their history of underpromising and overdelivering. (2019 being a classic example, guidance was about half of actual result.) 

Also a measure of the quality of management was that the costs of the capital raising were not broken out, nor deduscted from 'normalised' earnings or any of the other chicanery so many businesses engage in.


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## peter2 (29 July 2019)

Thanks @galumay for your comments on CCP. I thought you might be licking your lips over the discounted price. 

I've taken a few minutes to look over the price movements after the yearly results were released in previous years. I've gone back to 2014 and marked the news day with an arrow. The thin violet line is the XAO so you can see what was happening in the general market at the time. In the top panel I've shown the relative strength of CCP to the XAO. 

In every year (except 2014) the price of CCP acts stronger than the XAO after the yearly update is released. In 2014 the market fell and CCP followed. 

I should mention that CCP is quite a volatile stock and short term traders should manage their risk carefully. eg. The recent BO-HR failed but we wouldn't start a short term trade three days before earnings would we.


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## galumay (29 July 2019)

Hey Peter2, the drop wasnt enough to tempt me to add to my position, CCP trades a fair way above my calculated range of value, so even down 7% its still above its IV range. 

The management team continue to execute so well that I am comfortable continuing to hold, and if there was a really significant drawdown I would happily add more to my position. 

I sold half some years ago to reduce the position size and deploy the capital elsewhere, in hindsight I would have done better to leave it all in CCP!


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## JTLP (29 July 2019)

Their EPS was below analyst consensus but their profit beat [emoji2369]. Anyway won’t be selling, they continue to provide a solid dividend so can’t complain.


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## tinhat (30 July 2019)

I think this is a sad business. Debt collecting and pay-day lending. It may be good money but it's not for me. Not the way disadvantage and disenfranchisement is being peddled around the place currently.


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## JTLP (30 July 2019)

tinhat said:


> I think this is a sad business. Debt collecting and pay-day lending. It may be good money but it's not for me. Not the way disadvantage and disenfranchisement is being peddled around the place currently.




I’m not a fan of pay-day lending either, but how can you dispute debt collecting? Are companies meant to let people walk away from their obligations?


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## galumay (30 July 2019)

tinhat said:


> I think this is a sad business.




I totally respect that view, I guess its the point of ethical investing, we all have things we would choose not to invest in based on our ethics. 

I have no problem with CCP, debt collecting doesnt offend my ethics, and they are not a payday lender. 

In my case I wont buy shares in APT for ethical reasons, I believe the business model is debt by stealth for young people and I hate the business model that makes people that don't use a service, share in the cost of it. I go so far as boycotting any store that uses APT unless they give me a discount of 4%.


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## omac (30 July 2019)

Seemed to be getting expensive anyway. Steady as she goes, as usual. Good to see scale being reached in the US and is now profitable, has been a measured approach to that market and good to see the progress. could be a good contributor to profits over the next 5-10 yrs. 

@galumay I did a similar thing and halved my holdings, its good to diversify. On the other hand, when you find these compounders, you should hold for as long as possible, it's a catch-22, haha. Plus being late credit cycle this might be cheaper in 12 months.


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## galumay (30 July 2019)

Well you had to be quick to take advantage of Mr Market's irrationality! Straight back up again today.


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## JTLP (16 August 2019)

CCP in a trading halt pending an acquisition. Collection House and Pioneer are trading, so perhaps it’s a US company?


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## Faramir (16 August 2019)

Credit Corp acquires Baycorp
447k0xkbr6fpxg.pdf

What you think of this Guidance Update?





I know what I think! I didn't buy enough shares back in Oct 2015 and I definitely didn't apply for enough shares in this year's Capital Raising PLUS last year, I didn't buy anything when that stupid report as published!!!! I feel like a non-holder that missed the boat. My holding is small, I may as well have those feelings.

Why do I hesitate on stocks like CCP but go in guns blazing on my poorer decisions???


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## galumay (16 August 2019)

So it was Baycorp, great buy, nice fit and an immediate flow through to the bottom line and increased guidance for the year ahead. CCP executing with expertise again. Boom, up 13% on the ann. Makes that CR look even sweeter in


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## galumay (16 August 2019)

Faramir said:


> Why do I hesitate on stocks like CCP but go in guns blazing on my poorer decisions???




I guess thats the learning curve mate, I have made similar poor decisions, including when I sold half my CCP a couple of years back, and the returns where I put the capital have been significantly lower than if I had just left the money in CCP. 

Psychologically I find it harder to pay more as a business executes, I now try to keep reminding myself that if the business is executing, and its getting more expensive, the averaging effect means I am still increasing my position at a lower overall price than the current market price. (i did that today, I had been resisting adding to a strong conviction position because my initial buy was at 13c and it had been hovering around 14-16c and I had an order in at 13c that was never going to get filled! So i let go of the anchoring bias, bought a second parcel at 16c and my average is 14.5c - suddenly 16c looks like good buying!) 

Averaging down into falling prices has always been easier for me, and while it can be one of the most powerful accelerators of capital when you get it right, its also very destructive when you are wrong!

I found that writing a decision journal is one of the things that really helped my discipline and overcoming my biases. In the case of CCP my initial reaction had been not to participate in the CR, but by writing about it I came to realise that it was silly not to apply for as many as possible, and although I got many less than I applied for, it was well worth it in hindsight.


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## JTLP (16 August 2019)

How bloody great is CCP. Such astute purchasers. It’s straight to the bottom line. I was thinking they may have run out of steam but [emoji1362]


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## Knobby22 (17 August 2019)

JTLP said:


> How bloody great is CCP. Such astute purchasers. It’s straight to the bottom line. I was thinking they may have run out of steam but [emoji1362]



Yes, they manage the company to a very high level.


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## Value Hunter (18 August 2019)

My feeling is even the upgraded guidance will turn out to be conservative. I think there is a reasonable chance of seeing a profit upgrade at the AGM.

The implied price to earnings multiple on the Baycorp acquisition seems to be around 11 times as they paid $65 million for Baycorp and the earnings guidance increase was $6 million (from top end of guidance to top end of new guidance).

But keep in mind that is based on existing Baycorp earnings. It does not take into account any synergy/scale benefits or the fact that Baycorp is an inferior company with inferior management and Credit Corp will no doubt be able to improve the productivity and performance of Baycorp. Also I think in general conditions are strong for the consumer lending and U.S. businesses and the earnings guidance is definitely conservative.


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## rnr (25 August 2019)

CCP is currently sitting just below the ATH of $28.90 and given the recent comments by (I assume) some shareholders it is obvious they are exceedingly happy with the acquisition of Baycorp.
There are also two (perhaps three) interesting gaps over the last month accompanied by higher volume that I thought tech/a may be interested in making a comment.


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## JTLP (16 October 2019)

Nothing hurts more than not getting the SPP right. FML


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## Knobby22 (16 October 2019)

I read the annual report, or at least the Chairmans and CEO reports and they were losing market share in Australia due to irrational pricing and poor behaviour which they refused to match. One of those companies is now in legal trouble and another (or the same?)has become weak with poor returns. Taking over Baycorp also removed a competitor. So Australia should be better in the future.

They said some companies prefer to sell them their books at a slightly lower price due to their morals dealing with customers and reputation.

The USA business is going from strength to strength.

No wonder the SP keeps rising. Should have put them and Polynovo into the yearly comp. CCP has gone up 50% since the start of the year. Thankfully it was and is still my second largest holding. $31.56 - who would have thought.


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## galumay (16 October 2019)

JTLP said:


> Nothing hurts more than not getting the SPP right. FML




*Hold my beer

I sold half my holding in the low $20s


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## JTLP (16 October 2019)

galumay said:


> *Hold my beer
> 
> I sold half my holding in the low $20s




Can’t go broke making a profit [emoji1360]


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## JTLP (16 October 2019)

Wouldn’t be surprised to get a market update early Nov. Seems to be a pattern with these guys.


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## Klogg (17 October 2019)

galumay said:


> *Hold my beer
> 
> I sold half my holding in the low $20s



Hahaha gold

With PNC encountering serious issues with their creditor, and CLH wasting their efforts fighting Lev Mizikovsky, CCP are very well placed. In fact, they might be able to buy part of PNCs book, as they're having a fire sale at the moment.

CLH won't be too far behind... Poorly managed.

P.S. I don't hold at all, so I guess I have you all beaten


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## Knobby22 (17 October 2019)

Klogg said:


> Hahaha gold
> 
> With PNC encountering serious issues with their creditor, and CLH wasting their efforts fighting Lev Mizikovsky, CCP are very well placed. In fact, they might be able to buy part of PNCs book, as they're having a fire sale at the moment.
> 
> ...




Thanks for the names to the unnamed companies mentioned previously by the Chairman.
Collection House actions make me understand why Lev is upset as a shareholder.
PNC is the company previously mentioned that is practically insolvent due to paying too much. They have been suspended since the 2nd September.


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## Value Hunter (21 October 2019)

I still hold all of my shares in Credit Corp and its still my largest share position. Indeed its my single largest investment.

I want to highlight a few things about the company culture of Credit Corp that do not get talked about much. 

Firstly its a very lean company with very few deadwood staff on the payroll. The CEO and CFO double a company secretaries. All the senior managers including the CEO answer their own phone most of the time and have no personal assistants. From what I have observed on a company visit and based on phone calls there seems to be one woman who wears multiple hats doing some kind of admin work, reception (she does not man the reception desk and comes to the desk when you buzz her from the reception desk), and supports the senior management team. No personal assistants for senior managers in this company. Nor are there any investor relations people as management and directors front up to investors and respond to phone calls and emails. The senior managers have very modest offices (I observed it on a company visit some years ago). While these are relatively minor details it speaks to the lean no waste culture of the company. And if you look previous annual reports showing support staff make up something around only 10% (varies from year to year though) of the total employee base. 

According to the latest annual report over 95% of management positions are filled via internal promotion. Almost unheard of in a day age where hiring managers from outside the company seems common place. Having been a shareholder for a long time I have observed many faces on both the board of directors and senior management and even mid level management who have been with the company for many years. 

Management and directors are conservative and under-promise and over deliver. They always use conservative accounting (for example upfront loss provisioning on consumer loans at a higher rate than actual losses experienced), maintain a strong balance sheet and routinely outperform their earnings guidance. They grow the business in a conservative fashion never overpaying for acquisitions, expanding into new markets slowly and cautiously by doing pilots first (there are still some pilot products in the pipeline in the consumer lending business). They try to grow in a steady and incremental manner.  

Over the past 3 - 5 years earnings growth has been more moderate due to a number of factors. Starting up the consumer lending and U.S. business because during the early phase they were not yet profitable as well as the reduction of debt purchasing in the core Australian debt purchasing business coupled with a recent capital raising which short term impacts earnings per share. The short terms impact of the capital raising will fully work its way through this financial year and in due to this and other factors I expect the earnings outlook for the next 3-5 years I expect to see an acceleration of earnings per share growth. 

The consumer lending business continues to power ahead. The U.S. business is rapidly approaching scale and critical mass and market conditions are very favorable for expansion and given that its growing rapidly off a higher base it will now contribute more meaningfully to earnings growth. This coupled with the fact that there is still plenty of room for productivity growth. Finally the core Australian debt purchasing business has returned to growth coupled with the fact there is a strong chance they will buy some of Pioneer Credits PDLs. Collection House does not have the balance sheet (or the market support for a capital raising) to support a major purchase of Pioneer Credits Assets and there are no other meaningful players left aside from Credit Corp to buy it in Australia unless private equity jumps into the fray but that looks unlikely as they previously looked at a transaction with Pioneer Credit and walked away. 

The fact that in the Australian PDL business profit only declined 4% from the peak despite a 30% step down in purchasing and despite having to wear the start up costs of the U.S. division and consumer lending and despite the impact of the capital raising that Credit Corp was able to generate reasonable earnings growth over the past 5 years speaks volumes about the quality of the business and the management team. The company is now very well positioned to witness an acceleration in earnings growth over the next 5 years. 

I will continue to hold my Credit Corp shares for a long time to come. There is no reason why it cannot eventually go to $100 per share in the long-term.


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## JTLP (4 November 2019)

JTLP said:


> Wouldn’t be surprised to get a market update early Nov. Seems to be a pattern with these guys.




On the money. Nice little boost with an increase in numbers. Was considering selling but every time I do they just get better. Like an ex gf [emoji28]


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## galumay (5 November 2019)

The recipe is simple hey @JTLP, just under promise and over deliver, again and again and again....


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## Value Hunter (6 November 2019)

Value Hunter said:


> My feeling is even the upgraded guidance will turn out to be conservative. I think there is a reasonable chance of seeing a profit upgrade at the AGM.
> 
> The implied price to earnings multiple on the Baycorp acquisition seems to be around 11 times as they paid $65 million for Baycorp and the earnings guidance increase was $6 million (from top end of guidance to top end of new guidance).
> 
> But keep in mind that is based on existing Baycorp earnings. It does not take into account any synergy/scale benefits or the fact that Baycorp is an inferior company with inferior management and Credit Corp will no doubt be able to improve the productivity and performance of Baycorp. Also I think in general conditions are strong for the consumer lending and U.S. businesses and the earnings guidance is definitely conservative.




Even though I expected good synergies from the Baycorp acquisition, I was truly surprised at the massive level of cost savings they were able to generate in just 3 months! To buy business for $65 million dollars and find a way to take out $11 million in annual costs (according to the AGM presentation) without damaging the business is a rather spectacular result!! It just goes to show how Credit Corp run a truly lean operation and are light years ahead of their competitors in terms of productivity!

Although I must say I was not impressed by the two new directors the company appointed recently. Two more of the same old grey haired ex banker types. If you look at their track records as executives and directors they both were at companies which at best produced rather mediocre performance for shareholders.

John Nesbit was previously non executive chairman of AMP capital which is a large and serially under performing fund manager. He had senior positions at Perpetual and SunCorp both of which have been under performing for shareholders for many years.

As for Trudy Vonhoff she was previously a non-executive director of AMP (and at one point its chief financial officer) which has been a dog company for decades, Cab Charge which has done poorly even since ride sharing companies arrived on the scene. Rural Co which under-performed and oscillated between profitability and losses until it got taken over.

The company has a lot of directors who have had serial involvement with under performing companies. It shows in relation to poor decisions directors (as opposed to managers) have made over the years with regards to dividen payout ratios, DRPs, capital raisings, structure of executive remuneration on and on. To be honest Credit Corp has an outstanding management team but a rather mediocre board of directors.

This is aside from the fact that there is a gaping skills shortage on the board of directors. For a company so heavily reliant on data there should be a least one director who specializes in technology e.g. databases, can write code, has a background in data analytics, AI, etc. Also many years ago the board had Carlos Toda on the board who was a businessman and practicing lawyer. For a debt collection company having a lawyer on the board is hugely valuable. And another previous Simon Calleia was managing director of Credit Corp in its earlier days and had first had experience of its IT systems and collecting debts first hand, etc. The lack of debt collection industry experience on the board is also a concern.

The management team of Credit Corp is world class but the quality of the board of directors has slowly deteriorated over time.


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## galumay (7 November 2019)

Interesting points about the board VH, what did Buffett say about great companies needing to be able to be run by an idiot - because one day they probably will be! 

I wonder why the BoD is such a sorry collective of deadbeats, is it just the old boys club?


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## Faramir (8 November 2019)

What was the silliest decision Credit Corp made in the last 5-8 years? Actually I should be asking what will the next silly decision? Looking into Pioneer Credit??

Credit Corp is one of the four suitors looking at acquiring Pioneer Credit. I can't explain it but I hope Credit Corp says No. I hope these deadbeats Directors do not think "what a great idea to buy out our competitor?" Maybe I am very wrong. I see a clash of cultures. I feel very uncomfortable. Hopefully someone inside CCP with common sense will tell the Directors some of the traps and pitfalls.

Am I wrong about my thoughts? Is looking into Pioneer Credit a good idea?? I really can not tell???


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## Knobby22 (27 November 2019)

Sold a few (1/4). Just getting to be fair priced in my view.


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## galumay (27 November 2019)

Knobby22 said:


> Sold a few (1/4). Just getting to be fair priced in my view.




I did the same a while back, thought the same then too. Doubled since then!! At least I only sold some.


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## Knobby22 (27 November 2019)

galumay said:


> I did the same a while back, thought the same then too. Doubled since then!! At least I only sold some.



Yes, I know the next profit report will be very good and there is a good chance we may have a Santa rally. I may regret this.


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## JTLP (27 November 2019)

Knobby22 said:


> Yes, I know the next profit report will be very good and there is a good chance we may have a Santa rally. I may regret this.




I’m always tempted to sell a few but then it pops again. No reason for me when they maintain the dividend.


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## Knobby22 (27 November 2019)

JTLP said:


> I’m always tempted to sell a few but then it pops again. No reason for me when they maintain the dividend.



All my shares were paid through a large loan. So as I make profit I pay it down otherwise I would hold for dividend also.


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## JTLP (4 December 2019)

Knobby22 said:


> All my shares were paid through a large loan. So as I make profit I pay it down otherwise I would hold for dividend also.




Best loan ever!


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## JTLP (13 December 2019)

On the nose recently with some pretty heavy selling, even on up days for financials and the like. Maybe some people taking cream off the top? It’s been a pretty stellar run.


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## galumay (29 January 2020)

Steady as she goes, Baycorp bedded down and performing well, US really starting to spin the wheels.


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## JTLP (4 February 2020)

It’s funny - reading the latest report they didn’t really surprise to the upside for me and got a bit whacked because of it. But then the broker notes came out and onwards we go! Can never really tell [emoji2369]


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## JTLP (6 March 2020)

Ok. When the dust finally settles I fundamentally believe this is a great business to buy. 

Rock solid growth year in, year out. When this inevitable credit crunch comes and bad debts rise, they’ll be primed to take advantage in Aus and the US. 

One of the top picks for me. Down nearly 35% from the peak already [emoji33]


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## tinhat (7 March 2020)

What I love about stocks like CCP is that they are basically part of the system that grinds the poor into profit. Grind the poor into money. Yeah yeah, what a great way to make a buck.


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## JTLP (8 March 2020)

tinhat said:


> What I love about stocks like CCP is that they are basically part of the system that grinds the poor into profit. Grind the poor into money. Yeah yeah, what a great way to make a buck.




Not sure I understand? They actually seem like a pretty ethical mob. Would you prefer people rack up debt with no consequences? Somebody gotta do it.


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## qldfrog (8 March 2020)

JTLP said:


> Not sure I understand? They actually seem like a pretty ethical mob. Would you prefer people rack up debt with no consequences? Somebody gotta do it.



You need to understand:
Any landlord is a racketter, any lender a robber, any wage a steal from the poor who do not work and are entitled to their fair chair of society, and nothing is fairer until everyone got the same some people still believe in the miracle of socialism.watching too much ABC...
Do not ever entertain the idea of any self control or self reliance, the fact a lender can allow you the extra bucks out of default on a bill or to bridge toward a next pay cheque.
And do not ever mention the bloody self funded retirees who do not want to die.
There are trace of clinical issues but a full denial of the problem


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## Miner (9 March 2020)

qldfrog said:


> You need to understand:
> Any landlord is a racketter, any lender a robber, any wage a steal from the poor who do not work and are entitled to their fair chair of society, and nothing is fairer until everyone got the same some people still believe in the miracle of socialism.watching too much ABC...
> Do not ever entertain the idea of any self control or self reliance, the fact a lender can allow you the extra bucks out of default on a bill or to bridge toward a next pay cheque.
> And do not ever mention the bloody self funded retirees who do not want to die.
> There are the trace of clinical issues but a full denial of the problem



You got a point but not necessarily I understand the comparison or agree.
It is like (sorry) saying all kinds of an intimate relationship is one form of rape- extreme comparison. Yes, just like say any lender is a robber and any landlord is a racketer.
By the way, this director has been unloading over three weeks its stocks to pay off own mortgages !!!!!!!!!!!
https://www.asx.com.au/asxpdf/20200226/pdf/44fgg0yd2r2nd5.pdf
https://www.asx.com.au/asxpdf/20200218/pdf/44f5dpwwn7b4gn.pdf
https://www.asx.com.au/asxpdf/20200212/pdf/44f0r7zwwm0fsx.pdf


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## Value Hunter (9 March 2020)

Miner all of those director share sales you list took place in February at prices between $36 and $38 per share. No directors are currently unloading at today's prices.


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## Value Hunter (9 March 2020)

If the Credit Corp share price drops a few more dollars it will be worth buying.


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## qldfrog (9 March 2020)

Miner said:


> You got a point but not necessarily I understand the comparison or agree.
> It is like (sorry) saying all kinds of an intimate relationship is one form of rape- extreme comparison. Yes, just like say any lender is a robber and any landlord is a racketer.
> By the way, this director has been unloading over three weeks its stocks to pay off own mortgages !!!!!!!!!!!
> https://www.asx.com.au/asxpdf/20200226/pdf/44fgg0yd2r2nd5.pdf
> ...



Was having a go at views of some of ASF members.Until all companies are coop reusing second hand goods and only have transgender non white employees, nothing is good enough.
There are crooks every where, but making a profit aka capitalism is what makes the world go round .
CCP is a decent company


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## Miner (9 March 2020)

qldfrog said:


> Was having a go at views of some of ASF members.Until all companies are coop reusing second hand goods and only have transgender non white employees, nothing is good enough.
> There are crooks every where, but making a profit aka capitalism is what makes the world go round .
> CCP is a decent company



Great views - similar to having walls to stop Mexicans. Don Trump will kiss you  LOL
On a different note how was the blood pressure today and what will be tomorrow ?


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## qldfrog (10 March 2020)

Miner said:


> Great views - similar to having walls to stop Mexicans. Don Trump will kiss you  LOL
> On a different note how was the blood pressure today and what will be tomorrow ?



I lost on paper less than 3k yesterday and have had dozen of worse days in the last 6 months so on  portfolios a non event.
On individual trend systems was a bloodbath loosing all the gains of the last yeat plus more
Was able to cash on qantas and fmg shorts, sold bboz and pmgold bonds acting as they were supposed to.
Disappointed by gold miners loses..that was unexpected
US market down even more.
another bad day ahead?


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## Miner (10 March 2020)

qldfrog said:


> I lost on paper less than 3k yesterday and have had dozen of worse days in the last 6 months so on  portfolios a non event.
> On individual trend systems was a bloodbath loosing all the gains of the last yeat plus more
> Was able to cash on qantas and fmg shorts, sold bboz and pmgold bonds acting as they were supposed to.
> Disappointed by gold miners loses..that was unexpected
> ...



Bad is an understatement for FTSE, DJ and today ASX. 
Dont know where the paper losses will stop . It is so tempting to lose patience and making mistake. Bottomless prices.


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## qldfrog (10 March 2020)

there 


Miner said:


> Bad is an understatement for FTSE, DJ and today ASX.
> Dont know where the paper losses will stop . It is so tempting to lose patience and making mistake. Bottomless prices.



is a bottom: $0.....;-)


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## JTLP (18 March 2020)

I’m actually perplexed at how much this is getting trashed. Any rationale other than broader market hammering? 

The dividend yield is quite decent and I have no qualms that they couldn’t maintain it.


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## finicky (18 March 2020)

Well to state the obvious, where I'm always most at home, their debt ledgers were purchased before the Chinese 'pandemic' when everyone could go to work and businesses could operate and make money. Therefore wouldn't the market perceive those ledgers as worth less today? If they were purchasing those same ledgers today wouldn't they cost less? The debtors on the other side of the ledgers were already distressed, or at least recalcitrant before this happened. 

Also, the expansion into the US - will that now be looked at more sceptically?

Also, the chairman, McLay, selling wads at the market top would I guess persist as a negative signal. It would for me anyway.


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## JTLP (18 March 2020)

finicky said:


> Well to state the obvious, where I'm always most at home, their debt ledgers were purchased before the Chinese 'pandemic' when everyone could go to work and businesses could operate and make money. Therefore wouldn't the market perceive those ledgers as worth less today? If they were purchasing those same ledgers today wouldn't they cost less? The debtors on the other side of the ledgers were already distressed, or at least recalcitrant before this happened.
> 
> Also, the expansion into the US - will that now be looked at more sceptically?
> 
> Also, the chairman, McLay, selling wads at the market top would I guess persist as a negative signal. It would for me anyway.




Thanks for the contrarian viewpoints. Last one RE McLay I guess is more luck than anything else. 

For the debt ledgers I’m not sure, will need to take a look under the hood to understand but my assumption would be that you’re no further in debt now just because the world has gone whacko - if you’re on one of their books nobody else is giving you a loan. 

The US expansion could be sticky now with corona.


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## galumay (18 March 2020)

I was wondering the same this morning, still higher than I paid for most of mine, but getting to the point of topping up. The big question is how hard it will be to recover debts in a severe depression, I dont have anyway to quantify that, but its got to have a material impact on profits. People will simply not have any means to pay back the debts CCP have bought, so a proportion of the purchased ledgers become worthless.


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## peter2 (18 March 2020)

CCP fell 95% during the GFC. What's the probability that CCP will fall 95% again (to 1.90) during this crisis? 






I thought that CCP would have bounced by now and have paid for that idea.


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## JTLP (18 March 2020)

peter2 said:


> CCP fell 95% during the GFC. What's the probability that CCP will fall 95% again (to 1.90) during this crisis?
> View attachment 101442
> 
> 
> I thought that CCP would have bounced by now and have paid for that idea.




If they fall that much I’m backing the truck up. Looks to be closing around $12 today. Absolute madness IMO. I know people factored in a decent profit growth but from $40 to $12 is 70% decline in SP. Is the company 70% less of what it was a few weeks ago? Have earnings been impacted by 70%? I may be a little biased but I’d say no and it’s either a distressed seller or people not thinking rationally.


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## peter2 (18 March 2020)

I don't know enough about the business of debt recovery. I'll accept that when times are difficult people aren't able or will refuse to pay their debts. This crisis will cause many many companies to the brink of bankruptcy. Many will choose to go bankrupt and restart when conditions improve. 

CCP should have the experience to buy the debt books with a higher probable payback. This is unlikely to be known until after the crisis has passed and business activity starts to recover. 

Like many other companies CCP may have a massive drop of revenue (creating a loss) during the crisis and must wait it out. What is the estimated price of this company if it doesn't earn anything for the next six months? 

A company to consider once the crisis is over and business starts to recover.


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## galumay (18 March 2020)

Good points Peter2, its probably useful to go back and see how they fared in 2007/08. 

If the business can stay solvent, then 6 months on no earnings or even losses really make no difference to the long term value of the business. The question is how long does the market take to recognise that value and what sort of discount will you end up being able to buy CCP for?


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## galumay (18 March 2020)

EDIT - EDIT - CCP fell a lot in 2007, from about $12 to $1 - in 2008 FY they announced falls in profit of about 50%, share price had already doubled and basically continued on its steady rise all the way up to $35 12 years later.


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## finicky (18 March 2020)

Current CEO, Thomas Beregi CPA, explaining the business back in Aug 2016. Sounds very clear and reasonable.

Too many imponderables for me, such as the business implications of a Plague, so I will be mindlessly resorting to a chart when contemplating a buy - which I only could if my gold stocks come in or I score the Endeavour Foundation lottery anyway - and it is not a chart buy yet


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## galumay (19 March 2020)

galumay said:


> EDIT - EDIT - CCP fell a lot in 2007, from about $12 to $1 - in 2008 FY they announced falls in profit of about 50%, share price had already doubled and basically continued on its steady rise all the way up to $35 12 years later.




I seem to remember thats how Dodgy Roger burnt all his clients money, loaded up in the $12's and then got wiped out when it crashed to less than a dollar.


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## JTLP (19 March 2020)

galumay said:


> I seem to remember thats how Dodgy Roger burnt all his clients money, loaded up in the $12's and then got wiped out when it crashed to less than a dollar.




CCP absolutely crunched. Dropping 40% this morning. Is this off the back of anything? I can’t see an announcement...


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## sptrawler (19 March 2020)

Value Hunter said:


> I still hold all of my shares in Credit Corp and its still my largest share position. Indeed its my single largest investment.
> .



Good write up VH, on reading their announcements, Donald Mclay the chairman is obviously no muppet he sold quite a few in Jan/Feb.


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## Value Hunter (19 March 2020)

I do not have any more cash left but if I did I would be buying more Credit Corp shares. Its a rock solid company (unless you think we are heading into another great depression and unemployment goes to over 20% and therefore people cannot pay back their debts).


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## JTLP (19 March 2020)

Value Hunter said:


> I do not have any more cash left but if I did I would be buying more Credit Corp shares. Its a rock solid company (unless you think we are heading into another great depression and unemployment goes to over 20% and therefore people cannot pay back their debts).




From a low of $7.23 today to back to $11 as I type...somebody thinks so as well. 

I’m in the same boat, and I think I will deploy more capital when the ship steadies.


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## finicky (19 March 2020)

I would be sacrificing something off the bottom and waiting for a monthly or at least weekly chart signal on this, whatever your personal chart signal might be, intraday reversals count for a lot less in a plunge like this, imo. Last time I experienced a bar like March CCP was my first visit to Crazy Horse in the 70's,


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## galumay (19 March 2020)

JTLP said:


> From a low of $7.23 today to back to $11 as I type...somebody thinks so as well.
> 
> I’m in the same boat, and I think I will deploy more capital when the ship steadies.




Yep, I got itchy finger when it dropped to $8 today. I held off as I think its too early to start buying yet, but anyone who knows this company and has followed it for a decent time would be pretty confident buying at anything below $15. 

Its probably one of the first things I will buy when I move into the market.


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## JTLP (20 March 2020)

CCP have withdrawn their guidance - fair enough. Although they’ve said thus far they’ve seen no material impact to their bottom line. 

Let’s see how this opens up - I honestly feel this was in the know from yesterday with the capitulation we had.


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## peter2 (23 March 2020)

No demand for CCP yet. Looks like the investors are distancing themselves from CCP.


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## kid hustlr (23 March 2020)

I find this chart incredible, not because of the rise and fall but more so in the context of member's who's opinion I value seeing it as such a strong company.

Hoping all the best


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## InsvestoBoy (23 March 2020)

kid hustlr said:


> I find this chart incredible, not because of the rise and fall but more so in the context of member's who's opinion I value seeing it as such a strong company.
> 
> Hoping all the best




But how strong a company is has nothing to do with the price over the short term, only average prices over the long term.

Imagine CCP has a huge shareholder and they decide to get out at any price on a complete whim, they can offer shares all the way down until they are flat, nothing about the companies fundamentals has changed.


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## InsvestoBoy (23 March 2020)

Also imagine this hypothetical shareholder is trying to sell their shares at a time when liquidity is low, they can burn through a huge number of levels in the bid book, very easily.


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## Knobby22 (23 March 2020)

InsvestoBoy said:


> But how strong a company is has nothing to do with the price over the short term, only average prices over the long term.
> 
> Imagine CCP has a huge shareholder and they decide to get out at any price on a complete whim, they can offer shares all the way down until they are flat, nothing about the companies fundamentals has changed.



The company fundamentals have changed.
A lot of the loan book is unrecoverable.
The world had gone to ****, that's the problem.


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## Triathlete (23 March 2020)

One current valuation I have looked at has it at $5.70.....


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## InsvestoBoy (23 March 2020)

Knobby22 said:


> The company fundamentals have changed.
> A lot of the loan book is unrecoverable.
> The world had gone to ****, that's the problem.




Sure.

I'm not saying the company is strong, or not.

I'm just saying share price declines like this can occur for strong companies, that there is no rule about how far a companies shares can fall (or rise) in the short term relative to fundamentals.


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## galumay (23 March 2020)

It could have further to go yet, remember it fell from $12 to under $1 in the GFC, it recovered very quickly because the business was much more resilient that what was priced in. The long term fundamentals of the business are basically unchanged, as an investor you have to decide what short term impact there will be on the business and how the market will perceive that. 

I think its now at a compelling price for a long term investor, with a large margin of safety,but that doesnt mean Mr Market won't price it lower in coming months.


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## finicky (23 March 2020)

It'll take time to find its legs again imo, sentiment counts. The chart took almost a year to base in the GFC - tiny bodied candles is what I'll look for myself. If it's to be a V shaped  share price recovery, which I strongly doubt, I am willing to miss out. This is a different management since GFC admittedly but s.p lost more than this back then percentage wise.
We know the chair guy was ok for selling near the top, are directors buying yet - no.


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## finicky (23 March 2020)

Whoops sorry, announced today:
Donald Evan McLay
DOC 16th 17th Mar
25,000 shares bought on market
$514,034

I should think so


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## JTLP (23 March 2020)

Hearing the scale of job losses now (AFL etc) it’s probably dawned on me that CCP will be in 2 minds:
- unable to recover existing repayments from debtors as they’ve gone too fat underwater 
- ability to generate new business through the unfortunate circumstance of people losing their jobs. 

It’s all a bit messy and sad atm.


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## JTLP (23 March 2020)

finicky said:


> Whoops sorry, announced today:
> Donald Evan McLay
> DOC 16th 17th Mar
> 25,000 shares bought on market
> ...




He paid $20 a share basically. That’s bad juju. 

Would be a huge vote of confidence if he doubled down now.


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## JTLP (24 March 2020)

The fact that you could have made 50% off this in a day (full range) is mind boggling. The massive movements across several stocks is quite frankly, unsettling.


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## JTLP (25 March 2020)

JTLP said:


> The fact that you could have made 50% off this in a day (full range) is mind boggling. The massive movements across several stocks is quite frankly, unsettling.




Make that 100% over 2 days. And Don has bought more, albeit at still a high average compared to the last few days ($12.40). 

To be honest, still think we’ve got a down period once stage 2 affects life.


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## galumay (25 March 2020)

I agree JTLP plenty of hurt to come yet.


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## finicky (25 March 2020)

Yes pretty weird market, "may you live in interesting times"

On a short term daily scale that appears as a very bullish reversal day to me. Don't know what the exact pattern is named but I'm calling it close enough to a bulliish engulfing pair. The positive day was the strongest volume of a year or more. Can't know whether we'll get a weekly or monthly reversal signal yet.
Hope my comments aren't distasteful to holders of CCP. A bit tactless really, I like market drama. Fundamentals trump charts but I can only use what I got.

Um, I wrote that yesterday and my post disappeared when I was on another site looking at the chart. Now the post was there ready to be posted today!
Gap up so far today, very strong 3 candle combo. Chairman been buying big. Waiting for a monthly reversal signal in April/May and sacrificing upside is the only safe way to go for a chart follower, fundamental analysts have the edge here.

CCP 6 MTH DLY


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## Knobby22 (25 March 2020)

The bots are so quick, in both directions.
Who knows what the price will be in a week.


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## peter2 (25 March 2020)

Latest candidate for the day traders. Plenty of range and depth.


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## Leilastarpass (30 March 2020)

JTLP said:


> CCP have withdrawn their guidance - fair enough. Although they’ve said thus far they’ve seen no material impact to their bottom line.
> 
> Let’s see how this opens up - I honestly feel this was in the know from yesterday with the capitulation we had.




The problem with this announcement is that they seem to be playing with words rather than being frank and honest. Telstra was reporting serious issues with staff being able to attend their Philippines call centre as early as the 17th of March. CCP has a very large call centre in the center of Manila I find it hard to believe that they weren't facing the same issues at the time of this release. 

Re work from home arrangements. Most call centres would never allow their staff to access their systems without physical supervision. Yes the technology for WFH exists but usually call centres don't want to use it. If they do want to use it, the transition is something that would take up to 12 months for a large organisation to figure out. The problem with the "business as usual" approach however is that it only take one government restriction, or one confirmed NCOV case in the building to shut down the operation overnight. 

I think this is what is mean when CCP refers to "increased restrictions on the availability of Credit Corps workforce". I wont be buying until they provide more transparency on the matter. It's disappointing that the update was so vague and it makes me think they not telling the full story.  

Source on telstra: https://www.9news.com.au/national/c...arantine/63c43bba-932a-4dc7-8f15-0747a77fc4f5


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## Leilastarpass (5 April 2020)

Came across more (old) information on the Philippines call centers. 

_Telstra and Optus have had to close most of their call centres in the Philippines, as Manila went into lockdown on Monday night to prevent the spread of COVID-19.

It is understood the new containment rules will force call centre operators in Manila to provide employees with special accommodation and transport. They will also have to rearrange the layout of the centres to increase the physical distance between workers.
_
Looks like the Philippines call center may already be closed. Really needs to be announced to the market if it has been.

https://www.afr.com/companies/telec...s-as-telcos-form-crisis-group-20200317-p54asy

Also Senators in the US are starting to push for Debt Collectors to cease all collections activity. So it could also mean strong headwinds for the US operation.

https://www.brown.senate.gov/newsro...ing-americans-during-the-coronavirus-pandemic


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## JTLP (6 April 2020)

Thanks for the info. Always handy to have this at hand when assessing investments. 

Whilst the US may be a headwind, it’s not a huge part of their operation and whilst it would dent earnings, so long as Australia is ok then I’m comfortable.


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## galumay (6 April 2020)

Nothing has changed with the long term prospects of CCP & while anything is possible, the past experience in 2007 etc gives us confidence that CCP is well managed to ride out the short term effects.


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## JTLP (29 April 2020)

CCP tapping investors for funds. What better time than the present? I’m a little perplexed (haven’t read the announcement / update in great detail) so will need to have a good read and decide what’s par for the course.


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## JTLP (29 April 2020)

JTLP said:


> CCP tapping investors for funds. What better time than the present? I’m a little perplexed (haven’t read the announcement / update in great detail) so will need to have a good read and decide what’s par for the course.




It’s very hard to make sense of the future. There’s a few “may” “ifs” and “buts” scattered throughout the doc. Key things for me:
- Collection rates have dropped as people can’t obviously service their ability to repay
- Once government stimulus finishes they may be in a worse predicament to collect funds
- Lending function is basically dead IMO
- US still seems hazy. Not sure what to expect. 

Will the SPP be a great buying opp? It seems the world has irreversiblely changed with businesses closing and job losses, so not sure how much can be made in a crisis. Bottom of the human pyramid is survival; I’m not paying a debt obligation if it means missing a meal. I’ll sit and think for now.


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## galumay (29 April 2020)

JTLP said:


> I’ll sit and think for now.




Feel much the same. Especially as we had the chance to add to our positions at a lot less than the SPP price in the last 6 weeks or so. Didn't buy then, so why pay more now?


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## JTLP (30 April 2020)

Price actually gapped up more than I thought. May potentially buy in the SPP if it sits a fair margin above the price.


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## galumay (30 April 2020)

Gapped up?!  Yes, got me reconsidering too. what a crazy market.


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## Value Hunter (4 May 2020)

It is unfortunate the directors of Credit Corp have chosen such nonsensical dividend policies.

The company since listing on the ASX in 2000 with around 28.4 million shares on issue (including outstanding options, etc) and has had multiple capital raisings. They did an IPO in 2000 a capital raising in 2002, one in 2003, one in 2006, one in 2019 and now in 2020 they are doing another one.

In total I estimate its around $320 - $330 million in capital raised from shareholders if you include the IPO and the estimates of the current capital raising. Since they listed they paid approximately $229 million in fully franked dividends. So whatever money they have paid in dividends they have more than taken that money back from shareholders. If you include the benefit of franking credits on the $229 million the gross dividends received by shareholders is around $327 million. Pretty much bang on what they have raised from shareholders since listing...... Basically paying dividends and then asking for all the money back.

Therefore clearly the dividend policy of the company has always been nonsensical and does not take into account that its a capital intensive business with a long growth runway and all the earnings of the business should have been retained.

When the company did its IPO in 2000 the fully diluted (including options) number of shares outstanding was around 28.4 million. After this capital raising the total number of shares on issue will be around 61 million. If the company had paid no dividends since listing and had also paid all management bonuses in cash (rather than using options) and had an extra $100 - $120 million in debt on its balance sheet (remember gearing would come down quickly if there are no dividends being paid so the extra debt would be more manageable) they could still have the original share count of around 28.4 million. Since listing Credit Corp shareholders have received a little under $5.5 of fully franked dividends per share which is a bit less than $8 of grossed up dividends. If no dividends were paid the share count would be less than half and the share price theoretically would be around $31.90 instead of $14.85. 

So the roughly $8 of grossed up dividends shareholders have received cost them around $17 of share price gain. So in effect every dollar of dividends shareholders received cost them around $2 of foregone capital gains. It sounds like a terrible deal to me. Despite strong management the directors have collectively cost shareholders many hundreds of millions of dollars due to poor decision making.


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## galumay (4 May 2020)

Great post, VH, and a reminder why looking at capital allocation is so important for the long term investor. Thats something that had gone under my radar with CCP. I cant complain considering how much I have made over the years, but as you point out it could have been a lot more.


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## galumay (5 May 2020)

Thinking further about your point last night, part of the blame probably falls on AUstralia's unique dividend tax treatment. The wealthfare program of rebating dividend franking credits and the general dividend imputation rules have been a hugely powerful incentive for businesses to pay dividends rather than looking at alternative capital allocation strategies. 

A timely reminder of the power of incentives and the harm they can cause!


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## sptrawler (5 May 2020)

galumay said:


> Thinking further about your point last night, part of the blame probably falls on AUstralia's unique dividend tax treatment. The wealthfare program of rebating dividend franking credits and the general dividend imputation rules have been a hugely powerful incentive for businesses to pay dividends rather than looking at alternative capital allocation strategies.
> 
> A timely reminder of the power of incentives and the harm they can cause!



I agree with your sentiment, but from a personal perspective and having lived off my invested capital for nearly 10 years, at the moment without the franking credits people will have to have a hell of a lot of savings to stay off the pension.
Having a comfortable retirement if you own a house, takes about $50- 60k if you are still active and want to do holidays, well with interest rates at 1.5% if dividends/ franking credits are reduced it will take a lot of capital to go 20 -30 years. Or else capital would have to be deployed into some other investment with greater returns, which in all likelyhood would be property, which in turn brings about more problems.


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## InsvestoBoy (5 May 2020)

Value Hunter said:


> Therefore clearly the dividend policy of the company has always been nonsensical and does not take into account that its a capital intensive business with a long growth runway and all the earnings of the business should have been retained.




CCP may or may not be an outlier in this respect (I don't know) and it is easy to say what they should have done in hindsight.

But FWIW there is plenty of academic research which shows that, on average, companies that have higher dividend payout ratios do better (measured by future earnings growth) than those that retain their earnings. It seems the underlying root cause of this is that again, on average, management teams are not great at allocating retained earnings and tend to destroy value rather than creating it.

Here's one famous paper about the topic from Asness/Arnott https://papers.ssrn.com/sol3/papers.cfm?abstract_id=295974


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## Value Hunter (5 May 2020)

Galumay the U.S.A. is actually no better than Australia in that regards except that share buybacks to some extent replace dividends in the equation.

When U.S. based companies have record corporate earnings and are flush with cash they do multi billion dollar share buybacks at record high share prices. Then when there is a recession, earnings drop and their balance sheets need to be shored up due to being over-leveraged (partly due to all the borrowed money used for stock buybacks) they then do capital raisings (share issues) and issue shares at much lower prices than they previously bought back shares thus destroying billions of value in the process. This happens like clock work.  Share buybacks should be done only when the shares are undervalued not because a company has excess cash. Unfortunately corporate share buyback volumes tend to hit record highs as share prices make new record highs. Since the global financial crises in the U.S. something like half of all share purchases in the U.S.A. have been companies buying back their own stock.

Sptrawler as Berkshire Hathaway has proved you do not need to pay dividends. You can retain all earnings and shareholders can sell some shares if they need cash flow. There can admittedly be problems with this approach when there is a market downturn but overall it can be a worthwhile (and in some cases superior) strategy on a through the cycle basis.

Investoboy I have seen all the type of research you are speaking of but I think it confuses cause and effect. Companies that pay large and increasing dividends often are able to do so because they are highly profitable and mature cash cows which generate vast excess cash flow, whereas often the earlier stage and more speculative companies are the ones that retain more earnings. Therefore I would make the assertion that the research has it back to front and that higher quality businesses generally are able to pay increasing dividends rather than increasing dividends causing a company to generate higher returns through more stringent capital allocation. That topic is potentially a long and complicated discussion which could warrant its own thread though. Also I would say CCP is not an outlier and a large percentage of ASX listed companies have a similar story to tell if you delve into the numbers. And its not about hindsight I was questioning Credit Corps directors years ago about their irrational dividend policy.


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## sptrawler (5 May 2020)

Value Hunter said:


> Sptrawler as Berkshire Hathaway has proved you do not need to pay dividends. You can retain all earnings and shareholders can sell some shares if they need cash flow. There can admittedly be problems with this approach when there is a market downturn but overall it can be a worthwhile (and in some cases superior) strategy on a through the cycle basis.



That is true, but constantly relying on capital gains and selling the underlying asset to live on, I feel would be a much more stressful way to run your retirement portfolio.

At the moment having to sell shares for income would be quite stressfull, but in retirement for some there will be no other option, that is untill they become eligible for Government assistance.
With a dividend flow of say 4%, it gives a degree of certainty in planning, hoping for a 4%  compounding growth in a share price is nice but hard to imagine with the hickups in the market.
Dividend is a function of earnings and payout ratio, price growth even with retained earnings, is a function of earnings being deployed into growth vehicles and prevailing market sentiment at the time. If no growth opportunities present it sits on the books as a taxable liability and the share price stays stagnant. Well that's my basic understanding.

How much retained earnings, has been lost over the years, trying to buy further growth overseas in the past? Apart from a couple of ventures, all that has happened in my memory, has been billions of shareholder value gone up in smoke.
Nab(U.S and U.K foray), Telstra(Asia), Westfarmers (U.K), ANZ (Asia) AMP(everywhere) to mention a few.

That might be fine while you are earning an income and investing for future needs, you have the income and time to recover, but when you are solely dependent on investment earnings for your lively hood, breaking the profits into dividends and growth is appealing.
Just my opinion.


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## galumay (5 May 2020)

I tend to the view that dividends should be the last resort of capital allocation, in the first instance the greatest value is created by the business that can compound returns on incrementally invested capital, so ideally you want all the FCF to be used to grow the business. If they cant compound the returns at an attractive rate then the next best value is likely share buybacks - as VH points out, these need to be done when price is below intrinsic value. Finally if there are no better options, then paying it as a dividend is last resort.


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## sptrawler (5 May 2020)

galumay said:


> I tend to the view that dividends should be the last resort of capital allocation, in the first instance the greatest value is created by the business that can compound returns on incrementally invested capital, so ideally you want all the FCF to be used to grow the business. If they cant compound the returns at an attractive rate then the next best value is likely share buybacks - as VH points out, these need to be done when price is below intrinsic value. Finally if there are no better options, then paying it as a dividend is last resort.



I understand the sentiment, but as I've said with Australia being such a small market place growth opportunities are somewhat limited, that usually means companies have to look further afield for growth opportunities. As I said, that hasn't been very successful in the past, but the idea is great IMO.
Westfarmers is sitting on a war chest ATM, it will be interesting to see how they deploy it.
Anyway just my opinion and I am talking from a subjective point of view, so I will obviously be biased.


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## galumay (5 May 2020)

Agreed, its tougher here, which presumably is one of the reasons divvies are more popular. Also right about many companies attempts to expand offshore, few have cracked it. 

I dont really think you situation makes you biased, you have articulated why divvies are preferable for you. Many investors would share the sentiment. I still think VH raises a valid point with CCP, that also applies to some others, if the divvies have effectively been financed with equity raising, thats poor capital allocation. Any increase in share holder value has probably only come from multiple expansion - which might be part of the reason it has been so hard hit.

Interesting discussion, both about CCP and the wider issues.


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## sptrawler (5 May 2020)

galumay said:


> Interesting discussion, both about CCP and the wider issues.



Very much so, it is great we can all canvas the issues from many angles, it makes the discussion helpful to readers at all stages of their financial journey.
IB, VH and yourself give a great deal of insight, that I hadn't considered and I certainly appreciate it.
Wish ASF had been around when I was a young bloke, starting the journey, rather than finding it when I have entered the departure lounge.


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## InsvestoBoy (6 May 2020)

galumay said:


> I tend to the view that dividends should be the last resort of capital allocation, in the first instance the greatest value is created by the business that can compound returns on incrementally invested capital, so ideally you want all the FCF to be used to grow the business. If they cant compound the returns at an attractive rate then the next best value is likely share buybacks - as VH points out, these need to be done when price is below intrinsic value. Finally if there are no better options, then paying it as a dividend is last resort.




If there is one thing that management teams as a cohort are worse at than allocating retained earnings to growth, it's timing share buybacks.

If there is contention about what an "ideal" management team should do, it's one thing, but I am just talking about the reality of the situation given decades of data globally. Most management teams are far from ideal, and I don't necessarily blame them, it's much harder to run a business than prognosticate about it.

I don't agree that growing the business should be the number one goal of every business and I personally think this is usually the downfall of many businesses that would otherwise have been sustainable and ongoing outfits.

Question for @galumay and @Value Hunter, let's say you are the owner of a successful suburban kebab shop. You're happy with the customer base of punters from the pub next door and it throws off about 5% a year in net profits. What do you do with those profits? Do you sit on those profits for 5 years, knowing that running a kebab shop is capital intensive and that you'll need a new fryer and updated fittings? Do you use the profits to buy a new fryer so you can run 24/7 and service truckies as they drive by?

Is there literally no scenario where you simply take those profits and spend them on your home mortgage and family expenses, go to the bank every 5 years for a new loan for the fryer and just sit and stay happy with the business as is without feeling some primordial capitalist urge to become a nationwide chain of kebab shops?


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## sptrawler (6 May 2020)

InsvestoBoy said:


> If there is one thing that management teams as a cohort are worse at than allocating retained earnings to growth, it's timing share buybacks.
> 
> If there is contention about what an "ideal" management team should do, it's one thing, but I am just talking about the reality of the situation given decades of data globally. Most management teams are far from ideal, and I don't necessarily blame them, it's much harder to run a business than prognosticate about it.
> 
> ...



On that very issue IB, I was talking to a friend of mine who with a partner run a small building company, he said they make the same money when they turn over $1m as they did when they turn over $3m, it is just a lot less work and stress turning over $1m.
Don't know how accurate his figures were, but he had no reason to BS and I had no reason not to believe him.


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## galumay (6 May 2020)

InsvestoBoy said:


> Question for @galumay and @Value Hunter, let's say you are the owner of a successful suburban kebab shop....




Its a terrible analogy. If I wanted that sort of return I would buy a kebab shop. In fact the company I run takes that to the next step, the entire purpose of the companies operations are to provide me with the lifestyle I want to live, currently that means working very few hours a week, creating no financial return other than the advantages of running a company for a lot of expenses and tax benefits. I specifically dont try to grow the business.

I also have an IP that returns over 5% net rental returns, I am also happy to sit on that and collect the income without it growing.

Investing in public companies is an entirely different pursuit, my search is for businesses that can compound returns on incrementally invested capital and thereby deliver much higher returns than the other activities I practice. I have no interest in investing in a public company with 0% growth and paying out a 5% dividend, i can do that elsewhere with less risk.


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## Knobby22 (6 May 2020)

I get the analogy though, even if it is a bit rough. So many companies retain a lot of cash to enable growth and just blow it.


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## Value Hunter (6 May 2020)

Knobby what you are saying is true a lot of companies blow the cash. 

All I am saying is that certain types of companies like Telstra, Wesfarmers, etc should pay generous dividends and certain other types of companies like Credit Corp, CSL, Seek, Cochlear, etc should not pay dividends. Companies should pay dividends either because they have a low return on equity or because growth opportunities are limited due to them operating in a mature market, etc. 

Companies should not pay dividends merely for the sake of paying dividends or because it is the default option.


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## Knobby22 (6 May 2020)

Value Hunter said:


> Knobby what you are saying is true a lot of companies blow the cash.
> 
> All I am saying is that certain types of companies like Telstra, Wesfarmers, etc should pay generous dividends and certain other types of companies like Credit Corp, CSL, Seek, Cochlear, etc should not pay dividends. Companies should pay dividends either because they have a low return on equity or because growth opportunities are limited due to them operating in a mature market, etc.
> 
> Companies should not pay dividends merely for the sake of paying dividends or because it is the default option.



I half agree Value Hunter.

Companies like CSL as you mention should pay a dividend that is small percentage of profits and ideally it should rise each year with growth.  It concentrates management minds and sets targets such as cash flow. It also is good to give some reward to long term holders.

I do agree CCP has been paying a too high percentage of profits. Getting the balance right can be difficult.

Another company Transurban has been paying dividends but is likely to now stop to take advantage of the present crisis to gain bargains.

FMG could spend all the massive dividend on new mines but this is risky. Investors like getting rewarded with less risk.


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## JTLP (27 May 2020)

Price is currently 34% above offer price of $12.50. Looking very attractive now. Will be tipping in a few K to get the new shares. Anticipating it’ll get scaled back massively.


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## TDinvestor (14 June 2020)

Hi Guys, I am a new investor. Is CCP a good buy now @16.5?
Can it be a growing stock?


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## galumay (15 June 2020)

Welcome to ASF, TDInvestor.

We can't tell you whether its a good buy at $16.50 for 2 reasons, its illegal to give investment advice on a public forum and no one knows the answer to your question anyway.

It can be a growing business, its been one for the last 10 years at a CCGR of over 10%, so I would think its quite possible it will continue to be.

As to working out the value of CCP and deciding whether the current price represents a discount to its value, thats something you need to work out for yourself - its important to work things like valuations out for yourself, otherwise you will just be gambling and have no conviction in your investment decisions.


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## Knobby22 (15 June 2020)

galumay said:


> Welcome to ASF, TDInvestor.
> 
> We can't tell you whether its a good buy at $16.50 for 2 reasons, its illegal to give investment advice on a public forum and no one knows the answer to your question anyway.
> 
> ...



Yes, I don't know as I am unsure how deep the recession will be and how that will affect the buying of the loans and returns. Also what the losses will be short term. Management is good though. Don't own at present.


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## JTLP (16 June 2020)

TDinvestor said:


> Hi Guys, I am a new investor. Is CCP a good buy now @16.5?
> Can it be a growing stock?




It’s been answered by 2 respected members, so hope that helps. 

IMO apart from that glitch where they got crushed, they’ve been very conservative in their profit announcements and seem to be a well oiled machine.


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## peter2 (5 January 2021)

This is a strongly bullish chart. IMHO price looks like going back to the pre-COVID high ($38) as an initial target. 

The chart failed to upload "_because the file could not be written to the server. The site administrator will need to resolve this before any files can be uploaded. "_

I'll post the chart later.


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## Miner (5 January 2021)

peter2 said:


> This is a strongly bullish chart. IMHO price looks like going back to the pre-COVID high ($38) as an initial target.
> 
> The chart failed to upload "_because the file could not be written to the server. The site administrator will need to resolve this before any files can be uploaded. "_
> 
> I'll post the chart later.



Greetings Pete
Watching the trade history and chart for CCP I noticed during COVID - March 2020 the price of CCP was around $5.7 compared today's closing price of $30.8. 
If your analysis says  the price looks like going back to pre COVID high $38 (about) is good for today's buyer but also shows the  people who bought March - June are in box seat.

.


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## galumay (5 January 2021)

It was a great opportunity to top up when it got smashed in March. Anyone with more than a passing knowledge of the fundamentals of the business and the quality of management would have been very comfortable adding at that time. I was distracted by my search for great opportunities outside of my portfolio in March - and missed one of the biggest right in front of me!


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## Faramir (5 January 2021)

I took part in their April Capital Raise. Last year, CCP was the only stock I spent money (unfortunately). I literally just froze up due to my desperate financial situation but I still managed to summon what little I had to take part in their Capital Raise. I didn’t buy in the lows of sub-$7. It didn’t stay there very long.
So the Capital Raise was an opportunity for me to increase my holdings by roughly 80-90%%?? Maybe more??? It was obviously very over subscribed.


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## peter2 (5 January 2021)

As we gain experience and hold/trade through significant market falls we come to appreciate the magnificent opportunity these falls present to the prepared trader/investor.


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## galumay (2 February 2021)

Another typical solid H1 result for CCP, guidance for the full year adjusted upwards, given their record for under promising and over delivering, thats a positive sign IMO.


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## peter2 (16 March 2021)

IMO price is itching to go higher. When it breaks-out it should get to the pre-covid high of $38. 
The MD is a bit thin so you won't be able to use a tight exit stop.


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## peter2 (3 May 2021)

Since my last post the price of CCP has fallen from $33 to $28. It had some support at $30 but has fallen after the latest market update. It seems some investors didn't like the update. 

I thought it was OK with a reasonable expectation of improved trading conditions in 2021. Perhaps they didn't like that the sales volume was 50% below pre-Covid levels. Surely that would have been anticipated during the pandemic economy. 

Looks like I'll have to wait longer for a buy setup.


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## galumay (3 May 2021)

Maybe there was some profit taking from those that bought in along the run back up from March 2020? I doubt many long term holders have much desire to sell.


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## divs4ever (1 February 2022)

Credit Corp reports first half profit growth of 8%
 Credit Corp Group Limited (Credit Corp or the Company) reports the following highlights for the first half of the 2022 fiscal year:  8% increase in net profit after tax (NPAT) to $45.7 million1 
 9% growth in the consumer loan book over the half to $200 million
  Record half-year investment driven by:
  Step up in US purchased debt ledger (PDL) investment to $150 million+ per annum 
 Radio Rentals acquisition
  On track for strong earnings growth across all segments over the full year Secondary purchases of the Collection House and Radio Rentals books grew Aus/NZ PDL segment collections by 6% and NPAT by 5% over the prior corresponding period.
 While market volume remains subdued, organic purchasing continues to recover, reaching its highest level since the start of the pandemic. Mr. Thomas Beregi, CEO of Credit Corp, said that the recently completed Radio Rentals acquisition would sustain collections over the second half in advance of a recovery in organic purchasing. “Credit Corp enjoys strong purchasing relationships and is well-positioned as unsecured credit balances recover and charge-offs normalise,” he said.
 In the US, Credit Corp has grown its market share to offset a contraction in PDL supply arising from the pandemic. 
The Company has secured a full year pipeline of more than $150 million. The outlook is for a strong recovery in PDL supply over the medium term as US consumers rapidly increase their use of unsecured credit. Aus/NZ consumer lending demand accelerated over the December quarter as key markets emerged from COVID lockdown.
 Record monthly originations were recorded in December. High settlement volumes suppressed first-half segment earnings due to up-front expected life-of-loan loss provision expense but produced a $200 million loan book at the close of the period. Higher interest revenue derived from the increased book will produce an improved second-half NPAT. 1 Excluding $4.5 million after-tax US Paycheck Protection Program (PPP) loan forgiveness during H1 FY2022. 
Several lending pilots commenced during the period including the Wizpay Buy Now, Pay Later product, the auto loan re-launch and the US instalment loan pilot. Mr. Beregi noted that the expansion of lending operations will ensure sustained segment earnings growth over the medium and long term. “Acquisition of the Radio Rentals business assets has accelerated our plans to enter the sale of goods by instalment market and adds to the suite of lending pilots already underway.
 All pilots utilise Credit Corp’s leading technology platform including fast online decisioning and superior collections,” he said. Outlook and guidance The Company is on track to grow earnings in all segments after record first-half investment. 
Credit Corp remains debt free with undrawn credit lines intact for any one-off opportunities and continued investment growth as market conditions allow. Investment guidance for FY2022 has been upgraded in accordance with the following ranges:

Guidance issued Nov-21 Guidance upgraded Feb-22 PDL 
acquisitions $280 - $300m ... $300 - $320m
Net lending volumes $45 - $55m ...$45 - $55m
NPAT $92 - $97m... $92 - $97m2
EPS 137 - 144 cents ... 137 - 144 cents2
This media release should be read in conjunction with the Appendix 4D and Consolidated Interim Financial Statements and the results presentation.

     2022 Interim dividend (declared, not yet provided at 31 December 2021)     38.0 cents     100%

DYOR



 i hold CCP ( 'free-carried' ) ( bought @ $6.20  in August 2012 )

 bought as a 'safe-haven'  for the 'crash' i thought was coming in mid-2013 

sometimes  getting it totally wrong  .. is not a bad thing


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## peter2 (1 February 2022)

peter2 said:


> *CCP*: Looks likely to break $35 soon. I've been buying the dips and selling near highs but now I'm willing to hold for more.




Nice report but was expected. *CCP* has been one of the strongest acting companies lately as it quickly attracts buyers whenever price falls.  A little tricky to trade as the MD is very thin. Still happy to hold for more.


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## galumay (1 February 2022)

Nice HY report from CCP this morning continuing the quiet achievement, as usual under promise, over deliver. The business does have some operational risk as a fellow investor pointed out but I have held for many years and the potential capital gains helps reduce any concerns on my part.


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## divs4ever (1 February 2022)

i bought into  this as a business liable to leverage  a popping credit bubble ( credit crunch )

 now IF i believed the Government ( and mainstream economists ) the economy is plodding along just  fine 

but here i am hold CCP  up around 500% ( in 10 years ) , wondering who is being deceptive .. economy pundits or whoever is massaging the books at CCP

 take care  

 but am happy to hold at MY buying price  ( $6.20 )


DIVIDEND TYPEDIVIDEND AMOUNT ($)FRANKEDEX-DIV DATEPAY DATE*Final*0.360100.00%30/08/202110/09/2021*Interim*0.360100.00%01/03/202112/03/2021*Interim*0.360100.00%02/03/202013/03/2020*Final*0.360100.00%19/08/201930/08/2019*Interim*0.360100.00%04/03/201915/03/2019*Final*0.360100.00%01/10/201812/10/2018*Interim*0.310100.00%05/03/201816/03/2018*Final*0.310100.00%07/11/201717/11/2017*Interim*0.270100.00%14/03/201724/03/2017*Final*0.270100.00%18/10/201628/10/2016*Interim*0.230100.00%11/03/201624/03/2016

 what i find interesting here   is how few LICs mention this   in their top 10 ( or 20 or 25 ) holdings  , ( surely i wasn't the only one buying this below $7 .. which gives 10% div. yield plus franking )


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