RE:RE:RE:Let’s see where this goesThanks Dunworkin2 for pointing out their presentation -a very informative read.
I've been doing a bit of research here.
Rev Or DR Adj ear. (Mil)
2017 6.8 18.9 8.8%. 0.9
2018 15.8 30.3 7.2% 2.8
2019. 31.9. 67.2. -0.5
2020. 37.2. 78.7. 4.1%. 2.6
Q121. 9.4. 28.3. 3.7. 1.6
Q221. 9.6. 30.3. 3.4. 1.5
Q321. 9.5. 26.6. 3.4. 1.4
or = originations
dr = delinquency rate
Two significant acquisitions in 2018 explain the large revenue jump, but led to losses in 2019. The losses may have cast a negative light on the stock during that timeframe, leading to the slow drain to the 25 cts range. COVID did the rest in 2020-2021 capping any rebound.
New tech platform in 2020 led to 12% drop in operating expenses. They kept reducing expenses in 2021 through system enhancements.
Portfolio balance keeps going up at rapid rate q/q and sequentially. Senior credit facility is being renewed on better terms and increased in size.
The Canadian used auto business has stagnated at around 40 billions the last two years. There must be significant pent up demand which will return in the latter part of 2021 and beyond as the economy reopens and people need to start moving around again.
Company plays in the B,C,D (subprime) credit markets, covering a wider range of less-than-perfect credit clients. D sector is highly fragmented. They screen their clients so well, however, that their delinquency rate is not much worse than if they were lending to prime credit clients.
30% insider ownership with continued insider purchases.
Price to sales around 0.75. Price to adjusted earnings around 5!! Partnership with U.S. giant Westlake says it all.
The analyst covering this stock (Yahoo estimates) has revenues stagnating in 2022. That’s great... he will be raising estimates all through 2022. My experience brings me to believe that the low estimate posted right now is for manipulative reasons... wants retail to think future is gloomy and bail. But people anticipate... and I think we wont’t be staying much longer 27-30 ct range.
I see downside risk around 22-25 cts if some large holder/institution tries to bail. Or if the next quarter is unusually bleak due to May-June Covid lockdowns.
However, I think it is more likely that we double going into 2022. This stock could well be up 4-6 times in a 2 year time frame.
Cheers,
Hen
p.s. Today, I took out the 130 000 share block that was sitting at the ask -bought it near the close. I saw it as an to add significantly to my position without having to chase it 10k shares at a time. Let's see if I have luck with this one.