I am a high conviction investor in CCP but have to admit that it is difficult to get your head around. Frustratingly, sentiment is sometimes also impacted by adverse news from other market participants who offer either "payday loans" (CCP doesn't do this) or companies with less conservative provision policies.
The flow of well priced PDLs is very lumpy. The company has been very clever in maintaining cash flows and profit in this context. When purchases are low, they concentrate on collections (e.g. last year) so profits are improved. There are also less provisions which helps as well. However, long term, for future growth, we need them to average out a good level of acquisitions. Pioupiou has some great posts on this.
Their recent increase in debt facility (note, not debt until/if they use it) is a clear positive to maintain ROE and dividends.
My only complaint is that we don't hear much between upgrades ! I hope they will give a market update soon...
CCP Price at posting:
$10.89 Sentiment: Buy Disclosure: Held
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