Author Topic: ADS - Alliance Data Systems  (Read 64224 times)

WneverLOSE

  • Full Member
  • ***
  • Posts: 109
Re: ADS - Alliance Data Systems
« Reply #350 on: Today at 10:07:52 AM »
Well it's quite clear everything beside the Cards business is going, they basically said so on the conference call...
Lot's of waiting and seeing on this one.
1) Value destroying asset dispositions (Non tax efficient, low cost basis)
2) P/E is very low but it may be a false image (Can they really stay at 30+% when competitors are getting more and more data focused, when the economic cycle turns, when other forms of payments are potential, when more and more activity is going online and data is easier to gather)
3) How much grow will there be ? yes, they will talk about active clients growth, but net net looking at CR now and in 10 years, what CAGR will it have ? they can keep active clients growing at any rate they want as long as they move all of the clients that don't meet the benchmark out of that group.

my 2 cents :
Might be a winning stock but not in the short term, lots of medium to long term unknowns and concerns weighing on the stock price.
saying that I hold a large position that I bought and I'm quite deep in the red. :-[
well, long term investing comes with long term pain and uncertainty  :P


vince

  • Sr. Member
  • ****
  • Posts: 395
Re: ADS - Alliance Data Systems
« Reply #351 on: Today at 12:12:38 PM »
I think the price more than reflects the risks and there is no evidence whatsoever the potential changes you are concerned about.  Instead of putting too much weight on unknowns, I would focus on the facts.  They have added an impressive lineup of clients and there is no reason why end customer sales and receivables will not "spool up" at a rate resembling historical figures.  They lost some customers yes, but they more than replaced the lost earnings but the street is acting like they are in a slow terminal decline.  Another big positive is the change in mgmt.  Already we were given a few new figures that you would think were basic communications and I can't imagine the new CEO not continuing down the path of highlighting the advantages, and most importantly, the few critical drivers of those advantages.  The new CEO was given a huge gift....the chance to easily improve the performance of the top job by just communicating in a way that makes it easier for average investors to measure what counts.