RE:DCI on BNN James Hodgins Curvature-Short $9 targethttps://www.bnn.ca/News/2014/2/26/James-Hodgins-Market-Call-top-picks-Feb-25-2014.aspx
Yikes! This guy, James Hodgins, just embarrassed himself.....Although I am not necessarily a fan of DCI right now, if one is going to recommend a short in a public forum, at least understand the business model.....
Hodgins stated that DCI was going to lose revenue from the Cash Store's demise in Ontario due to the fact that Cash Store's customers won't use DCI ATMs that are co-located in the Cash Stores.....
The primary business model for DCI in regards to the Cash Store is the provision of the pre-paid cards that the 'loans' are loaded on, and the issuing and usage fees charged therein......the usage of the ATMs physically within the Cash Stores are inconsequential revenue.
Regardless, DCI has already taken it's major hit from the prepaid card business. What once comprised over 50% of net revenue just a few years back has already decreased substantially, and as of last quarter, represented less than 20% of Gross Revenue.
The Cash Store hit will hurt somewhat, but I would still keep my eyes on Australia....if we see year-over-year declines there, then it might be time to jump ship before an announcement of a dividend cut.