RE:feb buybackyup. since buyback was initiating jan 20, bought back 84,000 shares, 17% of the 495,000 issued on rifco now been bought back. did same thing when vault deal done. hope they continue to buyback.
this company is getting lot bigger without much dilution to teh shareholders. implications for future dividend growth positive, but at current time, if chw can make accretive deals to get bigger, while it diversify end markets and funding sources, rather they bought back stock to prevent much dilution.
at end of quarter 3, press release said $100 million/month run rate in gross originating (originated $262 million in the full quarter). gross receivables at $1.4 billion at end of september. think avg term is 48 months, so collecting ~$30 million per month, so book growing at net $70 million per month. means maybe gross receivables end year at $1.6 billion ($1.4 billion + $70 million*3 months). adding rifco $326 million in gross gets chw over $2 billion in gross receivables by end of quarter 1 2022.
so chw will have more than doubled lending book with just mid-teens dilution in share count over past 18 months. chw has also lowered funding costs (1.98% on the ABS and saved 100 bps on revolver renegotiation) and is now looking to expand funding thru Chesswood Capital Management (CCM), hard to see how big jumps in earnings and free cash don't appear (even use modest assumptions).
from 2017-2019, this was a $9-10 stock price when didn't have treasury flexibility and gross book $750-950 million and paid out most of the free cash flow in form of dividends. w/new management, now has better treasury management and gross book will have more than doubled by end of q1/22. better diversified book by end market/geography and more prime customers. no wonder still buying back stock...
+$20 by end of 2022 imo.