That was me James. I got pretty lucky with that one. Sold at $78, not because I didn't like it there, but I just liked something else better. Then when it got to $50, I was ready to load the boat, but Seabreaze talked me out of it due to "retail fears". It got shorted all the way down to $30 or so and I wanted to buy, but decided to wait for the earnings release. Got back in (not big) at $37 and change. I do see it going to $50 fairly near term and could definitely see $70ish in a year or so. Lots of shorts need to cover now, so some nice fuel IMHO.
I think it's a decent business model if they can improve the payer mix. They seem to be working on that.
I think what makes it a good business actually is the fact their payer mix is so poor. It is what gives them a competitive advantage.
They say their majority of their customers I think were non-banked!
CONNS prays on the poor and charges them twice the price but poor people can't afford it anywhere else because CONNS ties them in with credit options.
Yes you do want to watch how the allowance / receivables captures their bad debts.
For instance PNC has an allowance of 2% of their loans for their bad debts despite provisions being 0.4% of loans per year.
Cons has an allowance of 5% of their loans despite bad debts being 10%.
So I would impair their receivable portfolio a little bit and figure out their real tangible book value. Either way I was ready to research the hell out of it being its spike to $40. Now I am looking at other stuff.
I have it on my watch in case it drops again but at $40 I think I can find things better.
Not to say I don't think it is still cheap just kind of mad my research takes forever to complete and I don't just walk into a stock unless I know everything.