CCV - Cash Converters

Hello all!

CCV has dropped around 10% since the start of the week.

Are you expecting it to fall further or do you think now would be a good time to buy in and ride the recovery?

And does anyone know the reason for the big drop, it seems to be worse then standard market fluctuations.

Thanks

peterlegg said:

Hello all!

CCV has dropped around 10% since the start of the week.

Are you expecting it to fall further or do you think now would be a good time to buy in and ride the recovery?

And does anyone know the reason for the big drop, it seems to be worse then standard market fluctuations.

Thanks

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Nobody can answer your questions because we cannot forecast price.

In my view the company is not expensive at current levels. If you look only a few posts up, you will see that this same situation occurred only a few weeks ago. Whether or not it will rebound again is up for your individual interpretation based on your analysis.

It continues to be bought on down days, with high volume persistently getting it up off its lows.

does anyone know whats up with ccv their volume is high more sellers than buyers (unusuall for them) and they flutuate heaps and are dropping rapidly. A few weeks ago 1.52 can anyone enlighted me. Whos the big seller

buffet said:

does anyone know whats up with ccv their volume is high more sellers than buyers (unusuall for them) and they flutuate heaps and are dropping rapidly. A few weeks ago 1.52 can anyone enlighted me. Whos the big seller

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Maybe its Buffet selling

All jokes aside, the price has been falling and volumes are high.
CCV has a history of this occuring before bad news is released. So this must be kept in mind.

It really is pointless trying to answer your question though, because if you are a long termer - the answer to who is selling is largely irrelevant. Whereas if your a short term trader - the potential of a bad news item causing a short term plunge is extremely relevant.

One technical view of CCV. If its an ABC correction then it has come within 1.5 cents of the typical (ideal) Wave C today.
We shall see .

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I think CCV has good chance to go up from here, though today's volume is a bit concern.It has been up from recent low of $1.22. If it can go over 1.275 tomorrow, then the recovery will be in play.

Here is the today's Research Report from BuySellSignals:

Cash Converters International
increases 1.2% - outperforming 84% of
stocks
Cash Converters International Limited, Australia's 13th
largest retailing company by market capitalisation,
increased 1.50c (or 1.2%) to close at $1.25. In the
Australian market of 1,223 stocks and 51 units traded
today, the stock has a 6-month relative price strength of 84
which means it is outperforming 84% of the market. A
price rise combined with a high relative strength is a
bullish signal. The stock rose for a third day on Tuesday
bringing its three-day rise to 3.0c or 2.4%. Compared with
the All Ordinaries Index, which fell 34.8 points (or 0.7%) on the day, this was a relative price change of 1.9%.

Analysis
© Copyright BuySellSignals Financial Research. Please refer to Disclaimer on back page.
Cash Converters International ( CCV )
Bullish Signals
- The price increased 1.6% in the last week.
- In the Australian market of 1,223 stocks and 51 units traded
today, the stock has a 6-month relative strength of 84 which
means it is beating 84% of the market.
- A price rise combined with a high relative strength is a
bullish signal.
- The Price/MAP of 1.17 for CCV is higher than the Price/MAP
for the All Ordinaries Index of 1.1.
- In the last three months the stock has hit a new 52-week
high six times, pointing to an uptrend.
- The price to 200-day MAP ratio is 1.17, a bullish indicator.
In the past 200 days this ratio has exceeded 1.17, 187 times
suggesting further upside. The 50-day MAP of $1.38 is higher
than the 200-day MAP of $1.07, another bullish indicator.
Undervaluation
- Price/Earnings of 18.1 versus sector average of 31.0 and
market average of 22.6. We estimate the shares are trading at
a current year P/E of 15.4 and a forward year P/E of 13.2.
- The earnings yield of 5.5% is 1.8 times the 10-year bond
yield of 3.08%.
- Return on Equity of 15.8% versus sector average of 6.9%
and market average of 8.3%.
- Return on Assets of 11.2% versus sector average of 3.6% and
market average of 1.5%.
- Return on Capital Employed of 20.1% versus sector average
of 10.2% and market average of 8.5%.
- Interest cover defined by EBIT/I is 18.3 times. This indicates
it is less leveraged.
Also, the following criteria set by Benjamin Graham:


-"A dividend yield of at least two-thirds the triple-A bond
yield"; the stock's dividend yield is 1 times the tripe-A bond
yield of 3.1%.
-"Total debt less than tangible book value"; total debt of
$A42.6 Million is less than tangible book value of $A93.9
Million.
-"Current ratio of two or more"; current assets are 3 times
current liabilities.
-"Total debt equal or less than twice the net quick liquidation
value"; total debt of $A42.6 Million is 0.5 times the net
liquidation value of $A92.84 Million.
- Market Capitalization has increased by $429.4 million from
$102.5 million to $531.9 million in the last 5 years. This
increase comprises cumulative retained earnings of $55.3
million and Created Market Value of $374.1 million. The
Created Market Value multiple, defined by the change in
MCap for every $1 of retained earnings is exemplary at $7.76.
PRICE PERFORMANCE RANK IN INDICES AND
SECTORS:
The stock is in 5 indices and 2 sectors.
The stock's rise went against the trend set by the
following index and sectors:
Retailing sector of 32 stocks traded today, which was down
52.5 points or 1.0% to 5,041.
All Ordinaries Index of 417 stocks and 34 units traded today,
which was down 34.8 points or 0.7% to 5,153.
The Total Australian Market of 1223 stocks and 51 units
traded today, which was down 25.7 points or 0.5% to 5,243.
Percentile
Rank 1-day 1-month 6-months
CCV 80 33 84
Retailing 34 48 79
All Ordinaries
Index
38 67 70
Note
Volatility
The stock traded between an intraday low of $1.24 and fiveday
high of $1.26, suggesting a trading opportunity between
peaks and troughs. The average daily volatility of 3.3% places
the stock in the 3rd quartile in the market meaning it is
mildly volatile.
Volume and turnover period
There were 456,300 shares worth $567,960 traded. The
volume was 0.6 times average trading of 816,364 shares. The
turnover rate in the 12 months to date was 48.2% (or a
turnover period of 2 years 29 days). This average length of
ownership of the stock at 0.9 times the average holding
period of 2 years 3 months for stocks in the All Ordinaries
Index suggests a larger number of speculators on the shareregister, making it less safe for long term.

Stopped out on the close below 1.25, still have it on a priority watchlist though just in case.

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Boggo said:

Stopped out on the close below 1.25, still have it on a priority watchlist though just in case.

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Boggo,

Where do you see this one bouncing to on the charts at this stage?

It's been pushed down over the last few weeks - tested $1.01 on 2 occasions now and seems to be hanging in there.

Thoughts?

Will be back in Adelaide late this arvo, will have a look then.

JTLP said:

It's been pushed down over the last few weeks - tested $1.01 on 2 occasions now and seems to be hanging in there.

Thoughts?

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Its in an area of interest if we just look back at the last three legs, ie W.4 and Fib retracement of last leg.
Based on that approach it should be in an area of support but this is probably looking for positives just to find an area where it could turn up.

If it does start to turn up around the current levels I would like to see it re-establish itself with support above 1.17.

That is what may be happening in theory, in reality I think there will be plenty of time to get back on when it does turn back up.

Just my

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Earnings downgrade released after the market tonight. Pretty sluggish of management IMO to do it in an ASX price query, and trying their best to spin it with a false positive "2013 NPAT will be slightly higher than 2012 NPAT." I would say EPS will probably be about 8c per share vs over 10.5c per share broker forecast. Entirely possible that this will end up somewhere in the lower area that Boggo highlights on his chart below.

Disclosure: not holding, worried that this company has unforeseen earnings risk (outside of legislation).

That's very poor form. Insiders clearly knew as it was being sold down in the days before.

Will continue to watch from the sidelines!

JTLP said:

That's very poor form. Insiders clearly knew as it was being sold down in the days before.

Will continue to watch from the sidelines!

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The legislation was known public knowledge. You don't need to be an insider to know that there's a chance that earning will be impacted. Coupled with the market's jittery about high PE stocks (CCV at $1.50 was trading at >16.5x last year's EPS of 8.95c), the risk-reward equation may not justify holding for many.

The impact may be one-off, as the cash advance seems to be picking up after dipping for 2 months. The chart offers good support at 80c. If NPAT was slightly higher than last year's $29.4m, EPS will probably be ~7cps. 80c would make the risk-reward much more favourable esp if the decline in cash advance is indeed temporary.

Will be an interesting open tomorrow morning.

Ves said:

Earnings downgrade released after the market tonight. Pretty sluggish of management IMO to do it in an ASX price query, and trying their best to spin it with a false positive "2013 NPAT will be slightly higher than 2012 NPAT."

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JTLP said:

That's very poor form. Insiders clearly knew as it was being sold down in the days before.

Will continue to watch from the sidelines!

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skc said:

The legislation was known public knowledge. You don't need to be an insider to know that there's a chance that earning will be impacted.

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From a charting perspective I would tend to think that something spooked it mid April.
Based on that approach to it I would lean towards thinking that the worst was over, ie, the money in the know are gone and its only those who are still holding and were wondering if it was going to much lower that may now decide to panic sell.

I see all of this as a possible opportunity for a confirmed turnaround re-entry with a potential to profit for a second time over the same price range.

Then again if I am wrong then there are another 2000 stocks out there of which at least 5% of them are capable of being replacements at any time - finding them is the key

skc said:

The legislation was known public knowledge. You don't need to be an insider to know that there's a chance that earning will be impacted. Coupled with the market's jittery about high PE stocks (CCV at $1.50 was trading at >16.5x last year's EPS of 8.95c), the risk-reward equation may not justify holding for many.

The impact may be one-off, as the cash advance seems to be picking up after dipping for 2 months. The chart offers good support at 80c. If NPAT was slightly higher than last year's $29.4m, EPS will probably be ~7cps. 80c would make the risk-reward much more favourable esp if the decline in cash advance is indeed temporary.

Will be an interesting open tomorrow morning.

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Correct - the information was public knowledge about the legislation but by HOW much it was affecting the business wasn't known until tonight.

I don't hold so it doesn't affect me; just think that something else might have been afoot here. You're absolutely correct about risk-reward though and I enjoy following your posts/commentary

http://au.news.yahoo.com/thewest/a/-/wa/17501486/cash-converters-takes-hit-on-new-laws/

Understand why the SP is crashing

Cash Converters takes hit on new laws
The West Australian June 6, 2013, 10:04 am

Shares in Cash Converters have slumped after the company warned it would take a hit on new laws that make its cash advance product more complicated and time consuming for customers and staff.

The micro-lender warned the additional requirements of the new consumer credit legislation laws, which came into effect on March 1, had hit its loan volumes by 2.36 per cent in March, 26.3 per cent in April and 12.56 per cent in May 12.56 per cent.

"This (the new legislation) has had a significant short term impact on the volume of loans written as both staff and customers become familiar with the new requirements," the company said in a statement.

However Cash Converters said May was a record month for its personal loan product with many cash advance customers move over to a longer duration, higher value loan.

"We expect to see profitability to pick up over the next six months," the company said.

Managing director Peter Cumins said the regulatory change and the system adjustments the company had put in place was always going to result in a transition period for customers.

"We believe the demand for short term loans continues to grow and the impact we are experiencing in our cash advance product will not impact the overall demand for our financial products over the longer term," he said.

Mr Cumins said he still expected full-year 2013 profit to be slightly higher than in 2012.

The new consumer credit laws are designed to protect vulnerable, cash-poor consumers from being exploited by short-term lenders.
Cash Converters shares were off 14.3 cents, or 14.02 per cent, to 87.7 cents after touching an earlier low of 82 cents.

So cash advances will be more complicated and time consuming to obtain. I am assuming a person who seeks a cash advance from CCV is already at some stage of desperation, so will this really deter them in the long run?

Tyler Durden said:

So cash advances will be more complicated and time consuming to obtain. I am assuming a person who seeks a cash advance from CCV is already at some stage of desperation, so will this really deter them in the long run?

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I think you'd be surprised how un-desprate some of the regular cash advance customers are.

Just look at the CCV ads... some guy gets a personal loan just so he could buy new clothes and date some girl he just met.

CCV publication today - lets hope they have their act together so setup new loans quicker!!!

Personal loans at Cash Converters is a simple process, we're here to help explain the details of a personal loan.
http://cashloans.cashconverters.com.au/loans/personal-loans.html

Personal loans explained

We're here to help customers make the right loan choice. There are many different and confusing loan names used by different lenders, so we'd like to help by clearing up the confusion.
What is a personal loan?

Personal loans are generally larger loans paid back over a longer period of time than our cash loans. Personal loans are used for all sorts of things like car repairs, or if the car is beyond repair, its replacement, for general household bills, for education expenses; generally those bigger bills that can stop people in their tracks. As personal loans involve borrowing larger sums of money, a longer repayment period allows the loan to be repaid with smaller repayment amounts.

Some personal loan providers don't perform credit checks to assess whether the borrower is eligible for this type of loan and their financial capacity to pay back the amount they have requested. At Cash Converters, as part of our responsible lending policies, we perform checks on every loan to ensure the loan is suitable for our customers and helps them with their finances.
How do Cash Converters personal loans work?

Getting a personal loan from Cash Converters is a simple process. The customer specifies the amount they would like to borrow, Cash Converters determines if the personal loan amount suits the customer based on their requirements, income and expenses. Personal loans are typically paid back anywhere between 6 to 24 months and the cash will be in the customer's bank account within 24 to 48 hours. All customers are required to provide 100 points of ID and bank statements dating back at least 3 months.
Personal loan, how much can you borrow?

The amount borrowed for a personal loan varies based on what the customer earns, and other financial commitments. At Cash Converters, a personal loan typically consists of a loan anywhere from $600 to $2000.
Different Loan Types

Confused about all the different types of short-term loans? We're here to help. Select from the list of loan types below and we'll explain each loan type in the easiest terms possible:

Cash Loans Personal Loans Bad Credit Loans
Payday Loans Unsecured Loans Cash Advance Loans

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