buying CCP at $9.62, page-88

Crazypunter

IF CCP has set up a line of credit to exploit opportunistic occasions when PDLs can be bought at attractive prices, and uses that line of credit for that purpose in that setting, then in my view an intelligent investor (not a short-term trader) should see the use of that line of credit as a positive. The less-than-astute investor might see it as a negative. Purchasing PDLs relates to future years profits, but a share-dabbling population that grew up since instant coffee became ubiquitous struggles to think a few years ahead.

CCP has been making an ROE in excess of 20% for years, and its retained-earnings is just below 50%, so its EPS should in theory grow by 10% while those two metrics hold. Now whatever the SP is, it should in theory grow by a similar percentage, other things being equal. The main other thing is Mr Market's PER, which is now low. We all know that Mr Market has his mood swings, and when he becomes exuberant, the PER will increase, so with the EPS increasing, the market will push the SP to $14, and above, but not tomorrow. As a rule of thumb, if Uncle Don is buying, that is the time to buy.

I should not be writing positive things about CCP, because I have not bought as many as I would like to hold as a long-term investment. My best interest is that the SP remain depressed until I can get my hands on funds to buy more.

Time for a mug of instant coffee.