Cash Converters (CCV) Speculative Buy @ 15c

In my opinion now is the time to start striking at CCV.

30 June 2018: share price was approx 30c, NTA around 30c, shares on issue 616 million. Market Cap around $184m.

Since then underlying business has remained profitable, the class action for $16m has been settled. Internal legals cost $2.5 Remaining potential exposure is on the Queensland disputed class action around $30m if lost.

Underlying NPAT around $17m p.a.
(From half year underlying EBITDA ex adoption of AASB9: $21m D&A: $3.9m Finance $5.1 Tax 30% = $8.4m)

NTA: 30c x 616 = $184m
-$16m class action 1
-$30m class action 2 (assuming lost)
-$5m legals ($2.5m legals times two)
+$17m NPAT

=$150m NTA at 30/6/2018
/616
= 0.24c

Against current share price of 15c

Importantly as mentioned the underlying business is profitable to $17m pa. or roughly 2.7c EPS
On 24c NTA thats 11% ROE on the NTA which is ok.
So this is better than a pure asset liquidation play their is an underlying profitable business. My assumptions above are conservative and haven't adjusted for tax effect of losses (which would provide tax loss benefit).

Current share price weakness could because Adam Smith Asset Management is exiting their position. They ceased to become a substantial shareholder on 1/3/2019. However that still means they have 5% that they still need to liquidate.
Shorts are not up significantly so share price weakness can't be because of this factor.

Buy is still speculative because this stock has been a serial disappointment over the last few years, and we also don't know what is the game plan of the major controlling shareholder EZCORP.

I went in heavily today with 160k shares. First time I topped up since the capital raise last year.