PWE total debt including negative working capital now 220M less than BTE......
with higher production this qtr. with more assets on the block then BTE could ever have....Senior note holders and bank credit facility know this..
Senior notes down to 1.2B Canadian..or 900M US..
Oil recovery allows PWE to pay down credit facility leaving a low debt company
given that they are paying them selves for the c note on the second ABS...It all depends on bad debt expense....I think CONNS just may surprise big to the upside
Unfortunately, there is more to it then that..PWE will see a decline in EBITDA for two major non-operating factors..FX and the sale of Slave Point.I ave been told by the company that they will breach the covenant...it is about getting covenant relief, which I believe they will.
I would not worry about nominal comps..retail side is going to do close to 200M regardless of comps...its all about delinquencies...CONNS has been hitting their targets and are getting even more aggressive on bad receivables..I have no idea why the market refuses to factor in a possible recovery since the numbers are so huge compared to the O/S
My point has always been to show that when they get the delinquency rates under control, which they will especially given the crack down of late, the finance side losses could be cut more than in half as interest rates drop like a rock on ABS and bad debt expense drops like a rock. To think that this won't happen or not to prove a premium for that future retain event is literally crazy..One could see a doubling or tripling of forward EPS by mid year..
So I guess the shorts think the higher delinquency rates continue? ABS remain elevated?
The model had worked for 80 years..CONNS isn't going anywhere..share price is a going machine but valuation is a weighing machine..I am moving around money and buying a large percentage of my portfolio now at these prices..god luck investors
To answer the question, the Cardium is worth $1.5B at 55 and $2B at 65...I am an advocate of selling off the Cardium and non -core and eliminating the debt and starting over..in 3 years of no debt and 300M in the bank, PWE could be producing 70k BOE of light oil and debt and extremely profitable...
I think it comes with the call..it will be a tough terms but at the end of the day, the runway they need to be successful
they cannot comment..dark period but I can tell you a deal will be made..all parties want a deal...terms will be easier than if oil was in the mid 30's too
this thing just turned the corner...the statement by management states that they mean business...I talked to a director today...I will not name names but he said that the goal here os for the finance side goal is to break even again through lower delinquency rates, lower ABS interest rates and higher revenue yields..I have doubled down right here
the quarter actually looks OK and better than expected but more importantly, CONNS clearly getting its finance side of the business in order. This was not expected!
CONNS is clearly performing better on delinquency rates versus last year if you account for the slower portfolio growth...this is a major change
The implication of a more stable and lower delinquency rate means much better interest rates with their ABS, which CONNS has been claiming to happen but the street did not believe...well believe it...Analysts have wanted them to sacrifice sales and grow slower for awhile now to get delinquencies under control and they are finally listening...this is major positive change in business practice and will substantially increase profitability. Increased revenues mean nothing if you can't increase profitability..Lower delinquency rates really drops to the bottom line in a huge way given CONNS previous large provisions..
Its shocking this stock isn't flying right now...12's is a joke...these are 2004 share prices with a company doing close to 2B in revenue..the leverage on increased profitability is through the roof.
Also and importantly, oil markets have not materially hurt sales or delinquencies..market got it wrong..
CONNS needs to market itself better...and I think CONNS is ready to sell that residual from the first ABS for over 100M...very little to no downside here..
If I was short I would be doing exactly what happened this morning..hold the price down to create a little uncertainty and then start heading for the hills this afternoon and going forward..lets see what happens
but at 12.60 per share, the comp[any is basically trading for free...its horrific and it has been management driven....they are horrible
They could have stopped growth; started providing guidance; slowed the ABS; worked on lowering delinquency rates and sold the residual for 100M and the stock would be 40 bucks...easy
just horrific management creating a situation that has nothing to do with real health of this company..very upset
did you know there would be a 1B liability to debt holders if they file? Also, debt has come down significantly and will continue to do so...not chance they don't make deal..and that's why they announced earnings call today..and the insurance companies don't want it anyway
With light oil at 52 Canadian, PWE now making money again..At 1.25 Canadian to the dollar, PWE Senior debt down to 1.60...A swan hills sale here and PWE debt drops to long tern sustainable levels...and best of breed in the patch...very undervalued versus peers right now..
I am 100% certain on this...
covenant relief coming and a major move up..