Author Topic: ADS - Alliance Data Systems  (Read 13040 times)

vince

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Re: ADS - Alliance Data Systems
« Reply #50 on: July 11, 2018, 08:05:53 AM »
Agreed. it’s not an asset light business like a software company. The economics should drive the valuation, not a fancy label from management.

ROE suggest the economics are very good and much better than SYF.

Misses the point vs P/B. On that basis ADS is fairly valued and SYF undervalued.

Can you explain your post please, how did you come to that conclusion?

Returns on absolute level not meaningful, but rather vs the market price.
Maybe its me but im not understanding what u are saying and for sure i dont see anything to back ur claim up.  I believe u stated they are fairly valued on price to book.  How did you come up with that conclusion? How are you confident in that assessment?  And then maybe a good discussion can come from that


tol1

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Re: ADS - Alliance Data Systems
« Reply #51 on: July 11, 2018, 08:21:47 AM »
Agreed. it’s not an asset light business like a software company. The economics should drive the valuation, not a fancy label from management.

ROE suggest the economics are very good and much better than SYF.

Misses the point vs P/B. On that basis ADS is fairly valued and SYF undervalued.

Can you explain your post please, how did you come to that conclusion?

Returns on absolute level not meaningful, but rather vs the market price.
Maybe its me but im not understanding what u are saying and for sure i dont see anything to back ur claim up.  I believe u stated they are fairly valued on price to book.  How did you come up with that conclusion? How are you confident in that assessment?  And then maybe a good discussion can come from that

An absolute return does not mean anything. Do the following: scatter all ADS peers and check the P/B vs the ROE. That way you can see what firm is valued how on that basis. I recommend to read some basics on valuation.

vince

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Re: ADS - Alliance Data Systems
« Reply #52 on: July 11, 2018, 10:03:41 AM »
Agreed. it’s not an asset light business like a software company. The economics should drive the valuation, not a fancy label from management.

ROE suggest the economics are very good and much better than SYF.

Misses the point vs P/B. On that basis ADS is fairly valued and SYF undervalued.

Can you explain your post please, how did you come to that conclusion?

Returns on absolute level not meaningful, but rather vs the market price.
Maybe its me but im not understanding what u are saying and for sure i dont see anything to back ur claim up.  I believe u stated they are fairly valued on price to book.  How did you come up with that conclusion? How are you confident in that assessment?  And then maybe a good discussion can come from that

An absolute return does not mean anything. Do the following: scatter all ADS peers and check the P/B vs the ROE. That way you can see what firm is valued how on that basis. I recommend to read some basics on valuation.
Exactly as I thought, Lmao, good luck to you and your process, your gonna need it.

tol1

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Re: ADS - Alliance Data Systems
« Reply #53 on: July 11, 2018, 02:45:00 PM »
Agreed. it’s not an asset light business like a software company. The economics should drive the valuation, not a fancy label from management.

ROE suggest the economics are very good and much better than SYF.

Misses the point vs P/B. On that basis ADS is fairly valued and SYF undervalued.

Can you explain your post please, how did you come to that conclusion?

Returns on absolute level not meaningful, but rather vs the market price.
Maybe its me but im not understanding what u are saying and for sure i dont see anything to back ur claim up.  I believe u stated they are fairly valued on price to book.  How did you come up with that conclusion? How are you confident in that assessment?  And then maybe a good discussion can come from that

An absolute return does not mean anything. Do the following: scatter all ADS peers and check the P/B vs the ROE. That way you can see what firm is valued how on that basis. I recommend to read some basics on valuation.
Exactly as I thought, Lmao, good luck to you and your process, your gonna need it.

Took you a great number of posts to comprehend an easy correlation. Let's return to the topic. Have a close look at, among others, ADS' balance sheet. I stand by it; overall, I am long SYF over ADS.
« Last Edit: July 11, 2018, 03:21:42 PM by tol1 »

vince

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Re: ADS - Alliance Data Systems
« Reply #54 on: July 12, 2018, 07:02:40 AM »
Agreed. it’s not an asset light business like a software company. The economics should drive the valuation, not a fancy label from management.

ROE suggest the economics are very good and much better than SYF.

Misses the point vs P/B. On that basis ADS is fairly valued and SYF undervalued.

Can you explain your post please, how did you come to that conclusion?

Returns on absolute level not meaningful, but rather vs the market price.
Maybe its me but im not understanding what u are saying and for sure i dont see anything to back ur claim up.  I believe u stated they are fairly valued on price to book.  How did you come up with that conclusion? How are you confident in that assessment?  And then maybe a good discussion can come from that

An absolute return does not mean anything. Do the following: scatter all ADS peers and check the P/B vs the ROE. That way you can see what firm is valued how on that basis. I recommend to read some basics on valuation.
Exactly as I thought, Lmao, good luck to you and your process, your gonna need it.

Took you a great number of posts to comprehend an easy correlation. Let's return to the topic. Have a close look at, among others, ADS' balance sheet. I stand by it; overall, I am long SYF over ADS.

WOW!!! Have a close look at their balance sheet?  Im convinced now, thanks for your brilliant insights.

cmlber

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Re: ADS - Alliance Data Systems
« Reply #55 on: July 12, 2018, 01:49:34 PM »
Agreed. it’s not an asset light business like a software company. The economics should drive the valuation, not a fancy label from management.

ROE suggest the economics are very good and much better than SYF.

Misses the point vs P/B. On that basis ADS is fairly valued and SYF undervalued.

Can you explain your post please, how did you come to that conclusion?

Returns on absolute level not meaningful, but rather vs the market price.
Maybe its me but im not understanding what u are saying and for sure i dont see anything to back ur claim up.  I believe u stated they are fairly valued on price to book.  How did you come up with that conclusion? How are you confident in that assessment?  And then maybe a good discussion can come from that

An absolute return does not mean anything. Do the following: scatter all ADS peers and check the P/B vs the ROE. That way you can see what firm is valued how on that basis. I recommend to read some basics on valuation.
Exactly as I thought, Lmao, good luck to you and your process, your gonna need it.

Vince, you must have missed the famous Buffett quote, “Your goal as an investor should simply be to scatter plot companies by P/B on the X-axis and ROE on the Y-axis and buy the ones in the top left quadrant.”

tol1

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Re: ADS - Alliance Data Systems
« Reply #56 on: July 12, 2018, 02:09:30 PM »
Agreed. it’s not an asset light business like a software company. The economics should drive the valuation, not a fancy label from management.

ROE suggest the economics are very good and much better than SYF.

Misses the point vs P/B. On that basis ADS is fairly valued and SYF undervalued.

Can you explain your post please, how did you come to that conclusion?

Returns on absolute level not meaningful, but rather vs the market price.
Maybe its me but im not understanding what u are saying and for sure i dont see anything to back ur claim up.  I believe u stated they are fairly valued on price to book.  How did you come up with that conclusion? How are you confident in that assessment?  And then maybe a good discussion can come from that

An absolute return does not mean anything. Do the following: scatter all ADS peers and check the P/B vs the ROE. That way you can see what firm is valued how on that basis. I recommend to read some basics on valuation.
Exactly as I thought, Lmao, good luck to you and your process, your gonna need it.

Vince, you must have missed the famous Buffett quote, “Your goal as an investor should simply be to scatter plot companies by P/B on the X-axis and ROE on the Y-axis and buy the ones in the top left quadrant.”

cmlber, it is called irony. A fellow poster noted that ADS report a high ROE, hence would be the better stock vs SYF...
« Last Edit: July 12, 2018, 02:13:43 PM by tol1 »

tol1

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Re: ADS - Alliance Data Systems
« Reply #57 on: July 12, 2018, 02:12:51 PM »
Switching costs vary by size of retailer. They are high for smaller retailers which is the market ADS focuses on. Still their two largest customers make up 30% of the card segment revenue. These customers probably have a lot more leverage and likely less profitable.

If it is purely private label card, then switching costs are not all that much. Citi (with exception of Costco) and Capital One can onboard a new retailer pretty efficiently. Where ADS has increased switching costs is by integrating marketing with cards. Epsilon and LoyaltyOne makes it a pain for smaller retailers to move their private label cards.

I don't think this is true.  Look at SYF.  Lowe's has been with them for ~40 years.  Most of their large retailer relationships are 10-20 years, and their ROE's are very high.  It's not a simple switch for the retailer.

Today's announcement does not necessarily imply SYF lost the WMT contract and it is WMT's obvious right ask for bids. But if SYF lost WMT as customer, this would be significant given the low penetration of PLCs at latter. SYF mgt have stretched how much they have invested in mobile capabilities in recent months. On top of that, I hope mgt do not bid for WMT at any ROA.


vince

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Re: ADS - Alliance Data Systems
« Reply #58 on: July 12, 2018, 02:31:14 PM »
Agreed. it’s not an asset light business like a software company. The economics should drive the valuation, not a fancy label from management.

ROE suggest the economics are very good and much better than SYF.

Misses the point vs P/B. On that basis ADS is fairly valued and SYF undervalued.

Can you explain your post please, how did you come to that conclusion?

Returns on absolute level not meaningful, but rather vs the market price.
Maybe its me but im not understanding what u are saying and for sure i dont see anything to back ur claim up.  I believe u stated they are fairly valued on price to book.  How did you come up with that conclusion? How are you confident in that assessment?  And then maybe a good discussion can come from that

An absolute return does not mean anything. Do the following: scatter all ADS peers and check the P/B vs the ROE. That way you can see what firm is valued how on that basis. I recommend to read some basics on valuation.
Exactly as I thought, Lmao, good luck to you and your process, your gonna need it.

Vince, you must have missed the famous Buffett quote, “Your goal as an investor should simply be to scatter plot companies by P/B on the X-axis and ROE on the Y-axis and buy the ones in the top left quadrant.”

cmlber, it is called irony. A fellow poster noted that ADS report a high ROE, hence would be the better stock vs SYF...

Just to be clear, that fellow poster was not me.  I simply asked how could someone be confident that ADS was fairly valued just based on book value.  Whoever read the exchange can judge for themselves how good the answers were

cmlber

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Re: ADS - Alliance Data Systems
« Reply #59 on: July 12, 2018, 02:54:14 PM »
Agreed. it’s not an asset light business like a software company. The economics should drive the valuation, not a fancy label from management.

ROE suggest the economics are very good and much better than SYF.

Misses the point vs P/B. On that basis ADS is fairly valued and SYF undervalued.

Can you explain your post please, how did you come to that conclusion?

Returns on absolute level not meaningful, but rather vs the market price.
Maybe its me but im not understanding what u are saying and for sure i dont see anything to back ur claim up.  I believe u stated they are fairly valued on price to book.  How did you come up with that conclusion? How are you confident in that assessment?  And then maybe a good discussion can come from that

An absolute return does not mean anything. Do the following: scatter all ADS peers and check the P/B vs the ROE. That way you can see what firm is valued how on that basis. I recommend to read some basics on valuation.
Exactly as I thought, Lmao, good luck to you and your process, your gonna need it.

Vince, you must have missed the famous Buffett quote, “Your goal as an investor should simply be to scatter plot companies by P/B on the X-axis and ROE on the Y-axis and buy the ones in the top left quadrant.”

cmlber, it is called irony. A fellow poster noted that ADS report a high ROE, hence would be the better stock vs SYF...

Just to be clear, that fellow poster was not me.  I simply asked how could someone be confident that ADS was fairly valued just based on book value.  Whoever read the exchange can judge for themselves how good the answers were

Actually, nobody said that... all that was said was ADS’ ROE shows that it has a superior business, not that it is the superior investment at current prices.