Old CCRT Notes Q3 2007 Conference Call and Analysis
Q3 2007 Earnings
These are my notes as posted on TMF in 2007. CCRT was trading at around $15 and I considered it could value, but did disclose my relative ignorance of financial companies.
Transcript http://seekingalpha.com/article/52923-compucredit-corp-q3-2007-earnings-call-transcrip
Release http://us.biz.yahoo.com/iw/071105/0324164.html
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- I have no clear idea what is going to happen with CCRT over the next year, but things seem more certain further out. That is the reverse of my normal thinking with companies’ prospects.
- Will they go bankrupt? So unlikely I am happy to give that a 1% chance. [What a difference a year makes. What's the chance of bankruptcy now?]
- Will CCRT struggle to build earnings again after a couple more poor quarters? Possible.
- Will earning grow after the current credit market issues resolve? Likely.
Who owns CCRT?
- Major holders can been seen on yahoo or similar financial site.
The quick place to check on Gurus is Guru Focus, here’s the link for Pabrai. - The other place is to search on the SEC site
- Or this SEC site for recently received
- Using the first option and typing in Pabrai returns this list which you can then quickly scan to see the latest 13F form. Click on text and you then get this
- If you don’t know the main forms then read up on this list or maybe someone will summarise the important ones.
Doing the same search on the Edgar Archive with second curve returns this list
Both Pabrai and Second Curve will be filing the 3rd quarter 13-F forms in about a week, it will be interesting to see if they have both been buying more of CCRT.
As Pabrai owns a chunk of CCRT it is worth considering if this is a high uncertainty low risk (whose sick of that phrase?) investment.
- The near term could not appear more murky if all the worlds squids did a simultaneous protective blast of ink.
- There is a tiny chance of loosing your capital.
- There is a good chance of making off like a bandit with a double or a triple within 1-3years.
So CCRT looks like a high uncertainty low risk investment to me.
How do I figure a double or triple. [Now a tenbagger]
Current price $16.36
Who thought they were likely to get a 50%+ return when they were buying in the $30s? I did and I’d wager Brown and Pabrai did. So that is a rough target of around $45, almost a triple. I don’t believe I am anchoring as my estimates when I originally bought were based on earnings that I see returning in future years. If anything those higher earnings are closer now than when I bought throughout this year.
Will ttm earnings return to past highs of $3+? I think that is likely within the next three years. Give that a multiple of 12 and you get $36+ CCRT could even come out the other side as a stronger better company just as they did after 2001.
Things I need to look at
Current book value is $17 – what is that comprised of? [same old question]
Well of the $682M NTA as of June $152M was goodwill and $12M was intangible. So if I deduct those I end with $518M of assets. Divide by 49M shares and I get $10.60 of good book value. This is a very quick look and as I said earlier I am not yet comfortable analysing financial companies like CCRT. Anyone else want to chip in on this? [and still a year later on slightly more comfortable with financial companies]
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