My words, “... the SP is currently within a reasonable price...

My words, “... the SP is currently within a reasonable price range of $30 to $40.” should have been “... the SP is currently within a reasonable price range of $30 to $34, but $40 a year or two down the track is achievable”. To which I would add, “and necessary for CCP to get into the ASX Top 100.”

According to Medallion Financial Group, CCP is a buy. See https://thebull.com.au/18-share-tips-23-january-2022/ , although the opinion given is shallow, to wit, “CCP purchases debt ledgers in Australia, New Zealand and the US. It also provides online consumer finance. CCP has generated consistent revenue growth in the past decade. CCP has lifted earnings and investment guidance for fiscal year 2022 following the recent acquisition of Radio Rentals. The acquisition could continue to provide significant upside moving forward.”

I like CCP, and I have a relatively large holding for a retail investor. I have 16,308 shares in my SNSF portfolio that I have had for a long time (average purchase price $9.008), and which I am inclined to hold. Needless to say, they have delivered a good dividend too. Relatively recently (over the last two years), I have bought and sold CCP speculating in my personal share portfolio, and I had 3000 CCP shares until last week, which I sold at $35.52. These cost me $11.815 a share, so that punt turned out well. I had bought the latter shares as a high-conviction purchase using funds borrowed with my flat as collateral. As I am in my dotage, I want to simplify my estate by reducing that mortgage to a very small value, which I did yesterday. I have lost money on other stocks, mainly BYL and TGA, and they lost me approximately as much as I have made on CCP, so don't labour under the illusion that I know what I am doing, but I do spend a lot of time focusing on CCP.

I like conservatively leveraged stocks, but there is a point when leverage can be too low, and that is where CCP is now, IMO. The worst aspect of that low leverage is that Management chose to get there via a capital raising (CR) at an absurdly low SP, so we retail shareholders suffered share dilution, and the institution who got 90% of the CR action at $12.50 a share were handed a bonanza. I have often remarked that the likes of Encore Capital and Intrum, two overseas giants in the sector, did the opposite – they bought back shares. Encore does not appear to pay dividends, so one has to consider its buy-backs with that in mind. In contrast, Intrum pays a dividend, and its payout ratio is high. From memory, I think Intrum only buys back shares to compensate for shares it issues as a component of its executive remuneration – a laudable practice, IMO.

When CCP issues its H1 results ending December 2021, and Encore and Intrum issue their FY21-ending-December results, I'll have much more to say on CCP's ROE, ROIC and debt leverage compared to Encore and Intrum. To provide a sniff of what I'll write, Encore reported the following for the last twelve months (LTM) ending 30 September 2021 (Q3 2021):

1. Debt/Equity ratio 1.8x, down from circa 8x in FY2018 when it was patently too high.
2. Pre-tax ROIC 15.2%, up from 10.1% for twelve months ending December 2018.
3. Return on average equity 18.9%, up from 16.6% for twelve months ending December 2018.

I do not know the facts, but Encore is a turned-around stock, and the the improvement since 2018 may reflect the competence of Ashish Masih, who was appointed CEO in 2017.

The silver lining to CCP's sub-optimal capital management is that there is room for improvement.