Wheres the CCP growth coming from?, page-12

There is a six-month-old article at http://www.copyright link/markets/equity-markets/how-to-make-money-from-debt-20141204-12026. What was written is basically correct, but some points merit deeper commentary.

Accounting in this business (debt collecting) is fraught with subjectivity, hence making it easy to exaggerate profits for a few years, or understate them. One can take comfort from the fact that CCP tends to do the latter; at least under the management that replaced the cowboys after CCP's near-death experience in 2008. This is why I do not have the same level of confidence in CLH and PCN as I have in the reborn CCP, and in its helmsman since 2008, Thomas Beregi. Mr Berigi's only flaw is his proclivity to under promise and over perform – a flaw that I can live with.

PCN does not have sufficient history to allow one to derive reliable metrics like ROE, which makes investing in it more an act of faith than financial analysis. CLH has a significantly lower ROE than CCP does, and higher debt, which is not a good combination – a high-leveraged company should have a higher ROE.

My reluctance to flag CCP as a “buy” stems mainly from the fact that I would like to update my dated study of CCP before opining on the matter, but I definitely like it as a poverty stock investment. The gap between the PER of CCP and the other two stocks mentioned should be greater in my opinion. I do not share the view of the author of the above article that CCP's PER of 12 at the time of writing was too high.