Wheres the CCP growth coming from?, page-10

ROE
I am happy to hold the 13,000 CCP that I own, but the current share price ($11.85 at COB today) represents a fair-value price, rather than being a no-brainer that would compel me to buy more. I bought 13,000 last year in three bites at an average price of $9.607, and I would expect to hold them for years. In future, I may sell some more TGA shares, of which I have many, and replace them with CCP shares. This could be justified to improve the balance of my portfolio, even if both stocks were in fair-value territory. I like owning stocks in pairs, and TGA and CCP are a good match, in my view – what one learns from one, often applies to the other.

I would value CCP in the range of $11.50 to $13.00 using a crude PER-based calculation. If the current EPS forecast is 80c – 83c, then I would use 82c, and multiply it by 14, 15 and 16 to get a range of values, rounded so as not to give an illusion of precision.

PER .. EPS .. Valuation
14 .... 0.82 .... $11.48
15 .... 0.82 .... $12.30
16 .... 0.82 .... $13.12

The USA operation may burst into significance once USA politicians realise that the overzealous prudential-policing of professional debt collectors is reducing credit access, and increasing litigation, to the detriment of the demographic that prudential regulation was intended to benefit. As long as CCP's USA operation pays its way while in sleeper mode, CCP may as well retain it.

One reason why CCP can grow its Loan Book faster than TGA can, is that CCP has more information on applicants. CCP has information on a million people, whereas TGA has information on 100,000+, and therefore TGA has a high application rejection rate.