The key words I think apply to CCP are "discipline" and "conservative". The "discpline" means that they understand the valuation metrics of PDLs and only invest when there is value. Sometimes they don't invest as much as they would like in PDLs (which recently they have begun to offset with the consumer debt business). They seem to be "conservative" in their provisions. They routinely outperform their projected collections (this is always a key slide in their presentations).
In this context, the debt facility is an unambiguously good thing (in my opinion). It is there for good opportunities, which may or may not present themselves. But in the current climate, markets are spooked by a change of wind. This is amplified by the relatively low liquidity of CCP shares.
The issue with CLH is relevant. If you believe that CCP has a better business model than CLH (like I do), then CLH troubles are an opportunity. I benefited greatly when shorters went after JBH when DSH faltered. It allowed investors who saw that the JBH business model was nothing like DSH were able to buy cheaply (I think this short term trade is now finished and have exited). Those shorters who thought there was a link got hurt.
For those who are confident of the fundamentals of CPP, it is possible to accrue a good stake in periods of SP softness. But I can see why the SP unsettles many holders at times and it may take the next announcement to break the cycle. I continue to buy buy small parcels on bad days.
CCP Price at posting:
$9.45 Sentiment: Buy Disclosure: Held
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