the only reason I repeat is for new investors looking to buy so as to see the facts and also to marginalize the short seller with the undeniable truth
I concur with mirskitchens numbers..revenues are exact;margins are exact..tell me where its wrong
really looking frwared to the first major reversal on strong earnings and lower delinquency going forward..the numbers
they know..anything below 550 is an elevated risk disproportionate to higher scores and they are looking at them much more carefully. Same holds true for anything office related. They have learned
I have no idea..but here are my thoughts..this stock previously traded at 20-25x earnings before the street got wind they were loosening credit to goose revenue for new units being opened..if the street sees that things are back to normal and they are just starting to see this, then revenue comps won't matter because the stock was priced for failure and still is. The company is going against tuff comps this qtr.It is not because the cutover base is leaving...instead,earnings will matter more because its so underpriced .The market took it down because they thought the company had really messed up and it was unrecoverable. It could feasible get to 15 to 20x forward earnings again this year..there will be add backs for bad debts and also add backs for recouping written off debts in house instead of by third parties. This could end up being a large number (over a dollar per share for both). Wright really did kitchen sink last qtr so the company could move forward..nobody believed it and in fact believed the worst. These major funds that bought in really do their DD before they made major investments in the company. I'm worried they are here to take over the company at 40 to 50..Stephens is in at 40 with a large buy so it won't go for less than that...but if the funds are in it because of the extreme value play and the shorts are not related to them, then this could go up pretty hard at earnings and beyond...a double from here is certainly not out of the question..but what do I know, I'm in at a higher price. At the time I had no idea that they had loosened credit so much
Revised: With continued comps and new builds, revenues next year to exceed 1.65B. I can safely say that nxt yr's EPS should be over 4 dollars per share with delinquency add backs and recouping old bad debts.
November 123M (+17% YOY in November)
December 132M (+11% YOY in December)
January 93M (20%+ YOY in January)
Total retail revenue 350M (+16% YOY for the QTR)
Credit revenues 70M
Total revenues 420M vs 361M last yr
G&A 112M on reduced adv. expense
Bad debt provisions 39M (high end) bad debts already written down at 10%
Interest expense 8.6M
taxes 35% 18M
Profit 36M or .95-1.00 per share fourth qtr!!!!
I adjusted bad debt provisions up to 39M from 32M just in case Wright decides to push off the improving delinquency situation till next qtr leaving ammo for 1st qtr FY16.
"The decision to pursue collection of past and future charged-off accounts internally rather than selling charged off accounts to a third party."
and recouping them instead over time with a static loss rate of 8%..meaning expect 2% of total debt accretive to earnings this year on top of the add backs to bad debt provisions as the delinquency rate continues to go lower
60M increase in revenue.Do you think they will beat? And then you have the funds buying up everything..Is it a buyout per the company announcing strategic alternative 6 months ago? or are they just getting on for the big ride..either was its good right?
the strategy of Wright has been clear.Kitchen sink bad debt provisions for the year; reduce delinquencies by pushing back new unit openings to second qtr..15 to 18 units still on tap; get delinquencies quickly to traditional levels; provide monthly updates to eliminate any information vacuum between qtrs..
Unless these guys make an offer before earnings, these guys are all in for the long haul. That would be best for shareholders as earnings are going to beat by a mile
Its mind boggling to me that analysts still have an avg earnings target of 55 cents as if they haven't put together the hard numbers above..these sales are hard.And the margins have not changed..so we are going to see a blow out over analyst estimates. Compounded on this impact, delinquencies are going to drop like a rock in March like it always does...Too bad most people don't read the message board
This is why the funds bought everything up. Plus full year at well over 4 dollars per share as well.They probably had to blink twice before they bought becauce they couldn't believe the share price was so low. I'm sure Wright guided them internally to let them know the delinquency issue was resolved and there is not longer any argument for a company collapse.When you do over a dollar per sharein a qtr. it warrants a 50 dollar share price minimum not 27
75% of CONNS customers use CONNS credit. When CONNS was in a uber growth phase is 2012,2013, and early 2014 under Brian Taylor, CONNS loosened credit too much (much larger percentage of customers with credit scores of 550 or under) versus their historical standards so they could goose revenue. That's its own debate. But since last April CONNS starting returning to traditional lending standards where customers had to have credit score above 550 to get credit offered. It took about 9 months for the bad credit to start cycling out. Now we are in a downhill trajectory to 8% delinquencies which is at par with their model. CONNs gets higher margins for their products in return for lending credit. In a weird way, Brian Taylor's loose lending policy in the end helped CONNS greatly because many of CONNS customers are repeats so the ones that paid timely are coming back and buying more
Very interesting reading and way past my pay grade.Given the content of this paper, it does leave open the possibility that management coordinated with these funds to buy up all the shares to impact the share price "up at an accelerated rate" due to lack of float within a bullish environment. That would be a pretty sophisticated move against short sellers
"A shareholder rights plan, colloquially known as a "poison pill", is a type of defensive tactic used by a corporation's board of directors against a takeover. Typically, such a plan gives shareholders the right to buy more shares at a discount if one shareholder buys a certain percentage or more of the company's shares. The plan could be triggered, for instance, if any one shareholder buys 20% of the company's shares, at which point every shareholder (except the one who possesses 20%) will have the right to buy a new issue of shares at a discount. If every other shareholder is able to buy more shares at a discount, such purchases would dilute the bidder's interest, and the cost of the bid would rise substantially.n the field of mergers and acquisitions, shareholder rights plans were devised in the early 1980s as a way to prevent takeover bidders from negotiating a price for sale of shares directly with shareholders, and instead forcing the bidder to negotiate with the board." In the case of CONNS, management bought itself time to improve delinquencies which now they are clearly doing. This has put a bid under the share price. Earnings are really going to beat strong and delinquencies are going down fast so the share price is going to continue its assent. The list of funds are not all in on the buyout and will have to be compensated correctly & management/board will be have to be compensated correctly to approve the takeover. IMO, the buyout attempt fails, hedge funds win anyway because the share price is going back to old levels in the future as delinquencies base at historical levels and the company continues to build units. I personally do not want a buyout