CPSS
Delinquencies are higher, because the portfolio has aged, that is important to note, and they mentioned that in the cc if you take that into account things have actually stabilized if not starting to get better. More importantly the allowance is a greater % of delinquencies then where it was a year ago, meaning they are more covered today on the delinquency front then they were a year ago another sign that things are a bit better. the DOJ thing is behind them, They talked about starting to focus on growth again.
For the first times in a long time earnings is going in the right direction with q4 hitting .20, by the way they should earn 1.05 or so this year, the company will have great comps in 2018 and I think that will get noticed the big difference in q1 last year they earned .16 or so now they will earn about .25 thanks to the tax plan, and as I said the doj thing is now behind them we finally get good comps, and growth may start again. Book value has climbed significantly It is trading a little over 50% of book right now.
The stock buyback on this thing has also been very impressive as they continue to buyback shares at a rapid pace they are basically buying back 10% of their shares every year now os it seems. A lot of companies talk about buyback CPSS is actually doing it this will be another factor to drive earnings highers as they have been aggressively reducing the share count. We were unaware a year ago that they were going to be this aggressive going foward on this front. Every stock has it's warts, but even as good as q4 if you look at it without the charge it was still down from the previous year. I think the reason why the stock hasn't run is they have been on pace for like .70 for the last several quarter on and annual basis, The market was giving them their usual low 6-7 pe, guess what if the market gives them a 6-7 pe going foward and earnings are $1.05 or so we get $6-7 rather easily and the stock in the upper 3's looked like little to no risk, keep in mind bv is well over $7 at this point, and a lot of reward, I think if CPSS earns .25 in q1 versus a .16 comp the stock is gonna fly in my opinion. Time will tell though. All is just my opinion, and I could always be wrong though.
