CCP - Credit Corp Group

[rub92me]

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]

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]

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]

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]

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

 

[rub92me]

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+

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]

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]

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]

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]

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]

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]

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.

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]

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]

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]

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]

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]

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]

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

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]

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]

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.