CompuCredit Corp (NASDAQ:CCRT)

bad technicals and credit in a financialcrisis

Lending money to people who can't afford to pay you back has gone out of style.

Short interest: 202% of float

Tom Brown from Second Curve Capital has disclosed an enormous stake (owns 11.4%). Thomas Brown was in charge of the financial services group at Tiger Management before he founded his hedge fund so I am hoping he is a good choice for piggy backing

Currently priced for less than its cash on the balance sheet and at a fraction of book value CCRT offers investors the opportunity for outstanding risk-adjusted return s over the next few years. Expect returns of a few hundred percent as the market comes to its senses and assigns a much more appropriate valuation (BV at minimum).

Liquidity is not a concern here as the company will not need to renew the majority of its facilities until 2010. Between the cash generated from operations and its large cash position ccrt should have the liquidity to not only whether the storm but to opportunistically take advantage of todays environment for the benefit of shareholders.

Underwriting has held up well so asset value should remain intact. At today's price investors have a gigantic margin of safety supposing it does not.

Opportunistic debt repurchases (which should meaningfully reduce interest expense, therefore growing ccrt's cash generation capabilities in the near term) and stock buybacks (which should be enormously accretive considering shares are presently trading hands at a fraction of book) should provide tremendous value longer term for shareholders.

This stock still hasn't bottomed out, with more bad news hitting the financial sector, this stock could continue to drop well below $5 before making any sort of rebound...However, long term it is a pretty attractive buy.

The Enterprise Value is more than three times its market cap. Book Value of 16.60, strong mangement, insider ownership of 43.6 %. Sharper investors than I, such Monish Pabrai have recently made large purchases (1.7M shares)

Can't go much lower!!!

Its deffinitely hit the bottom...stock broker rule #1 buy low sell high!

Pabrai. P/B < 1.

I believe it has bottomed out and it is now time to buy.

From my short ideas/valuation screen

This one has reached its bottom it is time to buy!

Undervalued

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.

Essentially provide credit to subprime, bankless borrowers. Where have we heard this before?

beaten down way too much. With some aggessive FED action, look out above

weak economy should result in higher losses in the near term.

high insider ownership

experienced, shareholder-oriented CEO (pays himself $50k/yr) is a big fan of Warren Buffett

company treats people well (customers/employees/shareholders)

cheap valuation