CCP Creditcorp

[winner69]

Wonder if Carmel is bailing out ....... still strong selling ..... nearly 10% of the company changed hands ..... or maybe carmel just became a bigger owner

[winner69]

Previous profit guidance was 24M, downgraded to 17-19M up drop of 21 - 29%.

Price now 599 -460 or -43% Seems excessive compared to profit downgrade. 2008 PE now below 14!

Tempting..... but then one profit downgrade often leads to another.

Drop your profit guesses by 25% to a figure less (or about the same as) than last years profit the growth premium goes as well ....... no growth so why a PE of 20 they say

So say $2.50 odd of growth premium gone (reduced PE) and add that the what the earnings impact is and you get the $6.00 ..... and what will happen next time?

[macduffy]

Still watching .......... and waiting.

[winner69]

Still watching .......... and waiting.

Good call probably ...... heavy selling at the end and closing almost at days low suggests another bad day tomorrow

Looking at the trades some big shareholders bailed out today.

[COLIN]

Good call probably ...... heavy selling at the end and closing almost at days low suggests another bad day tomorrow

Looking at the trades some big shareholders bailed out today.

And who hoovered them up?
A 47% reduction seems a gross over-reaction to a relatively modest profit forecast downgrade. No doubt the general nervousness in the market has exacerbated the situation. I would normally wait for signs of an uptick before jumping in with a "buy" order but I'm not able to monitor the market closely, all the time, so took the plunge and bought 5,000 at 560. They will possibly go a little lower yet, but its not always possible to pick the bottom of the trough in these situations.
"Fortune favours the brave". In the past I have made handsome profits by buying otherwiser sound financial services companies the likes of AMP, TWR and BCA when they were "on the ropes", and had the satisfaction of riding the recovery trail with them. I have had a quick look at the CCP story to date, and also studied the financials, and am quietly confident. Also - and surely this must be a big also - with financial conditions tightening shouldn't it be a great climate for debt recovery firms to boost their business?

[winner69]

Colin ...... prob a good call ..... I took up a few for a short term spec ..... maybe might get more for a medium term trade .... but watch those charts eh

Always an interesting question when these sorts of events happen .... Is it such an overreaction when 3 months after telling the world you are going to increase profits by +20% you say you will make less money than you made that year?

Is it an over reaction when a share valued with heaps of growth priced in (even though only 20 times forecast earnings) loses that growth aura and becomes 'reasonably' priced?

What happened yesterday was not only adjusting for the reduced earnings but taking away the growth premium as well .... so not an over reaction in this context.

I get the heebie jeebies when these sort of companies use words like 'change in portfolio mix' and 'margin declines' and have productivity problems. It seems once they get to a certain size it all turns to crap and the much touted growth seems to lead to diminishing returns.

Same words as used by RMG for years as well .... RPC said much the same ..... so did CLH but they have survived and doing quite well and their shre price is now reasonably priced but way off what it was.

Colin .... you also say that you have studied the financials .... at face value they look OK but as I have said a few times before some concerns when you track cash flows and ledger valuations over time ... doesn't seem quite right ... and seems to mirror the same trends that CLH had before they had to make some large 'adjustments'

Interesting few months ahead .... not convinced about the fundamentals ... but market sentiment is a funny thing and as long as many think this is an overreaction there is money to be made .... so why not have a go eh

[drworm]

I rode this one and sold at $9.60 for a 3.5 bagger over a couple of years. Decided to sell because growth was slowing and PEG was getting over 1 - didn't feel like the price was value for money especially considering the risks associated with ledger amortisation.

I must admit I thought it was going to rebound quickly and yesterday subsequently took a nibble, got hammered and bailed quickly with a small loss. But absolutely agree with Winner, alot of the price drop was knocking out the growth premium so it's still not scream-out-loud cheap. I'm just happy to sit on the sidelines for now.

[COLIN]

I don't think so.

[COLIN]

Interested to read a couple of updated brokers' reports on CCP - their revised target prices haven't fallen as drastically as the market plunged last week. J P Morgan has it at $7.45 and another crowd - who I haven't heard of previously - has it at $8.00

[winner69]

The sellers have gone and tried hard to breach the $6 barrier yesterday

Upbeat remarks at AGM seem to have done the trick

Time to put in a bit extra dosh for a short to medium term trade .... but the recent problems have only been solved by words yet .... the problems with staff just don't go away because people are involved eh .... so watch those charts closely becuase I don't think you want to be around for the next profit downgrade .... which is still very probable