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.
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 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.
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
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?
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.
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.
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?
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?
"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.
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 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.
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