Crazypunter The words I posted stated that both CCP and the PDL...

Crazypunter

The words I posted stated that both CCP and the PDL market would grow slower than in the recent past, but not decline as you suggested. As for Baycorp, I think it is a bogeyman of little substance

At the current SP, CCP is still worth buying, in my opinion, provided one believes CCP can grow EPS at 10%, and keep its dividend payout ratio at about 53%, both of which I think will be the case. Those who believe a worse performance is likely, would think differently, of course. A typical company making a positive NPAT on the ASX has a PER of 15, and it has a payout ratio of 50%, which gives a Price/DPS ratio of 30, or in other words a yield of 3.33%. At an SP of about $9.00 and a DPS of say 45c, CCP has a dividend yield of 5%. I do not know with preciseness what the typical dividend-paying stock's DPS yield and growth are, but they would be less than 5% and 10% respectively, so on the basis of DPS yield and growth, CCP is ahead of the pack, and hence a viable investment.

There are about 2,400 ASX listed companies, and of those about 50 have fully franked dividend yield of 5% or more, and grow by 10% or more, so on a DPS yield and trajectory basis, CCP is in the top 2 or 3% of ASX stocks – good enough for me. It would take a lot of watering down of my admittedly loose numbers to reduce CCP to being in the top 10% of ASX stocks on a yield and yield trajectory basis, and even being in the top 10% is a good pass mark in my book.

The sector is not in decline – it will grow at the speed of the GNP, plus a smidgeon. Baycorp is, I think, not a huge threat to CCP, because it is not going to hurl money at PDL's like a drunken sailor, because it has not got much, and its major shareholder, Encore, is selective when it comes to deploying its investment in PDLs, and Encore has choices to invest in other geographies where it can do better than in Australia and New Zealand. If Encore is serious about this market, it should consider buying CCP, and that would likely enhance the SP. Encore is busy expanding in other geographies, so it is not going to give Australia and New Zealand focused attention.

Don McLay, CCP's chairman, would not have acquired 50,000 CCP via Torres Industries Pty Ltd for $468,737.31 ($9.375 each) in early October if he thought CCP was on the skids, and he should know. Investors sell for many reasons, so their selling does not reliably reflect a negative sentiment, but insider buying, is a often fairly reliable indication that all is well. The current stock of collectibles (Loan Book and PDLs) bodes well for the immediate future, say the next two years. It takes time for low investments in collectibles to manifest itself in metrics like ROE and EPS, and this can be strung out via share buybacks if there is a problem.