In calendar year 2014, when I first got into CCP, I assumed that...

In calendar year 2014, when I first got into CCP, I assumed that it would grow EPS by 10% for FY2015, and another 10% for FY2016. When the FY2015 results were published, I held to the 10% growth for 2016, and I now see this as in the bag - probably a bit better, because the rounding down to 10% in my 23% x 47% (ROE x Retained Earnings) is probably not warranted. 23% x 47% = 10.83%. Of course, if ROE improves, which is on the cards, then the EPS growth will be a bit higher.

The increased debt expected to fund PDL acquisitions and Loan Book growth is fine by me, provided the profit hurdle rates are not compromised, which is unlikely in the case of CCP. If the PDL market gets expensive in future, or growing the Loan Book compromises the expected profit of making loans, that would be when CCP can ease off, and reduce debt.

I found it strange that in the FY2015 Annual Reports of CLH and CCP, CLH painted a gloomy picture for PDL availability in future, and CCP painted a rosy picture, which it has now reiterated. I admit to being biased in favour of CCP's opinion.