Chesswood Group Ltd T.CHW

Rough road ahead....

[shawshank2]

Usa economic future is bleak at the moment. 1 step forward 2 steps back. Gdp seen worst contraction ever and jobless #s are gaining no positive traction. Almost 16 mil unemployed americans right now. And if you think there will not be a prolonged refecession or worse i want some of your pills. I bet we see massive chargeoffs in the next 12 months. From mda:.... "As of today, Canada and the U.S. are only approximately five months into the COVID-19 pandemic. Financial markets and businesses across many industries are already experiencing significant challenges and it will likely be some time before the duration and ultimate severity of the impact will be known. Chesswood expects that, at a minimum, there will be a further period of decreased originations and increased delinquencies/charge-offs, perhaps significant. Chesswoods subsidiaries have already granted deferrals on payments on material portions of their portfolios of leases and loans."

[Paddy902]

Thanks for the posts everyone, my biggest concern is that management felt the need to release at 6pm on a Friday....kinda tells you what they were thinking. We will likely open down and stabilize quickly, but short term not so much my concern.

[shawshank2]

Paddy good point my thoughts exactly. No pre release date just snuck it in on a friday afternoon. The eps were brutal and i wouldnt be suprised to float at the 4$ level for a while. If we touch that area again i will certainly purchase more but i dont see the risk/ reward being to good at this point. Ironically enough the sp has gone up 30% the two weeks before q2...

[Capharnaum]

Considering that Q2 was pretty strong, and that the underlying metrics have improved, I wouldn't be surprised to see the share price trend back towards $6. Net income from operations (operating income minus income taxes) was about $5.3M, or $0.33 per share. That's $1.1M more than last year, $0.07 more per share. Provision for credit losses was $5.4M compared to $6.2M last year. On the

[shawshank2]

Key there is originations are down significantly and will remain so for a year if not more imo. So if economy goes in the toilet it will be holding a ton of bad debt and no new income originations = breach of covenants on secured credit= equity to zero. This of course is worse case scenario but not a huge stretch in a continued recession

[Capharnaum]

You understand that debt is lower than loans that are currently out, including a very large bad debt provision that's above current and historical levels? Including $41M of credit provision, the net "minimum" loan outstanding value (which has been reduced by $162M for unearned revenues) was $812M compared to borrowings of $719M. So even if they didn't originate anything else

[shawshank2]

That article is funny just like the coverage of jobless#s. Emoloyment increased by 1.7 mil while 1.1 filed for new just under 17 mil currently unemployed. By most measures usa is in a depression and equity markets have not collapsed further (yet) because the fed is making corporate debt public. There may or may not be a further crash in the market but either way gov stimulus will eventually be cut

[Capharnaum]

We'll have to agree to disagree there. While I think the economy is going to be bad for a year or two, I also think that the government is already all-in. A high unemployment rate will result in one stimulus package after the other, they don't have much choice. They'll try everything (including negative interest rates) to keep the economy at least "afloat".

[shawshank2]

Economy bad= massive charge offs. Glta