CompuCredit Corp (NASDAQ:CCRT)

cardinalmm (< 20) Submitted: 2/3/2008 4:16:14 PM : Start Price: $11.12 CCRT Score: -62.92

Well, I'm not going to even put in the effort to explain what your DD has obviously not accomplished, but anybody who has actually studied this company would realize that job data numbers affect CCRT's actual business very little. In fact, the sub-prime crisis likely had little (or even a negligible) affect on the core business (that is, CC issuing). This, of course, assumes that they didn't get into any mortgage securitization with free cash (which is very unlikely anyway). In short, big CC companies were hit because they raised CC balances (to grow profits) in the face of declining rates of actual card issuing growth. CCRT, on the other had, targeted (and proceeded to practically rape) those who want to rebuild their credit.

Do you realize that the activation fee for one of their Aspire cards (which has an average balance limit of $300) is $29 and has a $150 annual fee that must be paid during the first month? That, compounded with the mandatory $7/mo maintenance fee leaves them at practically zero exposure to even people who default.

But who would default? Unlike the bigger CC companies that were extending balance limits to people with inflated FICO scores (because they owned houses <-- READ: sub-prime related), Compucredit's primary customer base did not own houses and were already people who had @#$%y credit. Nothing unexpected happened to people who were already in bad positions; sub-prime is bringing down the people who were artificially and temporarily doing well.