CCP - Credit Corp Group

[galumay]

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.

 

[Tightwad]

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.

 

[Value Hunter]

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.

 

[Value Hunter]

The recent AGM announcement was food and as expected they announced a profit upgrade.

 

[Knobby22]

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.

 

[Faramir]

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.

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

Earnings are scheduled to be announced tomorrow 30/1/18. Do you want to take on the risk? The earnings might be poor and the price dumps, the earnings may be good but the insto's take the opportunity to sell to the retail buyers (opens high, ends low). Who knows what will happen.

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.

 

[peter2]

@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.

 

[galumay]

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.

 

[Knobby22]

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.

 

[Value Hunter]

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.

 

[Value Hunter]

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.

 

[galumay]

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?

 

[omac]

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.

 

[McLovin]

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).

 

[Faramir]

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.

 

[omac]

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.

 

[JTLP]

...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.

 

[McLovin]

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)

 

[Klogg]

...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.

 

[JTLP]

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...