CCP has had a good run and has finally got back to pre-GFC highs. Please someone help me out here.....I like the company, management, and business model. It isn't the most glamorous of businesses to be in, but in investing that doesn't matter; its the underlying financial metrics that matter and historically they have been pretty good. My problem is how they are going to maintain the growth into the future. The only way they can increase revenues is by buying more ledgers (at the right price), which they say they are not going to do domestically, increase the size of the domestic lending book (but its still relatively small), and crank up the new ledger purchase business in the US (which has yet to turn a profit and has regulatory issues). With flat ledger purchase growth and 15% lending I put CCP at about $9.50-$10.00 intrinsic value versus yesterday's close at $11.41 which implicitly reflects significantly higher growth consistently into the future.
They have affirmed previous guidance for 2H, but what then??
I want a reason to buy, so can anyone help me out about what I am missing?.....otherwise I will have to wait until they disappoint, and see it down possibly 25% from here.
Thoughts?
CCP Price at posting:
$11.41 Sentiment: None Disclosure: Not Held
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