Author Topic: GSY - GoEasy  (Read 2868 times)

valueinvestor

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Re: GSY - GoEasy
« Reply #10 on: April 24, 2020, 01:53:58 PM »
Wouldn't this be an awful business to buy now since subprime loans will certainly be impaired?

Valdagger - I hope you'll forgive me :-[ - for some reason I have missed your post entirely, it was not intentional.

Appreciate the feedback; I’ll just watch this one for now; no need to address anything.

It's my pleasure, thank you for your input - it was also appreciated! :D



valueinvestor

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Re: GSY - GoEasy
« Reply #11 on: May 06, 2020, 08:56:37 PM »
goeasy Ltd. Reports Results for the First Quarter

Loan Portfolio of $1.17 billion, up 33%
Revenue of $167 million, up 20%
Diluted Earnings per Share of $1.41, up 20%
Total Liquidity of $214 million

easyfinancial

• Total application volume increased 12%
• Revenue grew to $132 million, up 26%
• Secured loan portfolio grew to $122 million, up 78%
• 59% of net loan advances in the quarter were issued to new customers, down from 63%
• 46% of applications acquired online, up from 43%
• Aided brand awareness of 83%, up from 82%
• Average loan book per branch improved to $3.8 million, an increase of 22%
• The delinquency rate on the final Saturday of the quarter was 5.4%, up from 4.3%
• Operating income of $51.4 million, up 25%
• Operating margin of 39.1%, flat to 39.5%

easyhome

• Revenue of $35.4 million, up 0.5%
• Same store revenue growth of 4.5%
• Consumer lending portfolio within easyhome stores increased to $40.7 million, up 67%
• Revenue from consumer lending increased to $5.5 million, up 64%
• Operating income of $7 million, down 2%
• Operating margin of 19.8%, slightly down from the 20.3% reported in the first quarter of 2019
Overall
• 40th consecutive quarter of same store sales growth
• 75th consecutive quarter of positive net income
• 16th consecutive year of paying dividends and 6th consecutive year of dividend increases
• Total same store revenue growth of 19.6%
• Return on equity of 26% in the quarter, up from 24%
• Fully drawn weighted average cost of borrowing reduced to 5.4%, down from 6.8%
• Net external debt to net capitalization of 72% as at March 31, 2020, in line with the Company’s
target leverage ratio of 70%
• Repurchased 204,150 common shares at a weighted average price of $48.98 through the
Company’s Normal Course Issuer Bid
• No reduction of personnel during COVID-19

https://goeasyltd.gcs-web.com/financial-information

Not a bad quarter considering.


thepupil

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Re: GSY - GoEasy
« Reply #12 on: May 07, 2020, 06:59:04 AM »
wow...33% annualized ROE, 1.8x book, eye-popping growth, stock up like 40% since you started the thread.

I am a dinosaur. this thing absolutely befuddles me.
« Last Edit: May 07, 2020, 07:00:51 AM by thepupil »

valueinvestor

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Re: GSY - GoEasy
« Reply #13 on: May 07, 2020, 09:09:22 AM »
wow...33% annualized ROE, 1.8x book, eye-popping growth, stock up like 40% since you started the thread.

I am a dinosaur. this thing absolutely befuddles me.

Same, but also does the markets now lol  ;)

winjitsu

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Re: GSY - GoEasy
« Reply #14 on: May 07, 2020, 06:43:46 PM »
I'm reminded a lot of a company down south in the states called OneMain Financial (OMF), subprime lender that was profitable through '08-'09 recession, as in their words, subprime borrowers are always down on their luck. OMF saw charge offs grow from 6.6% to 10.4% in their '06 cohort vs '08 loan cohort. Just hope you have the same confidence in the management team / underwriting if charge-offs grow a similar amount. 

See http://investor.onemainfinancial.com/Cache/IRCache/2e5fe00c-7211-989b-d4a5-f5e0cc764731.PDF?O=PDF&T=&Y=&D=&FID=2e5fe00c-7211-989b-d4a5-f5e0cc764731&iid=4405478

valueinvestor

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Re: GSY - GoEasy
« Reply #15 on: May 07, 2020, 08:59:06 PM »
I'm reminded a lot of a company down south in the states called OneMain Financial (OMF), subprime lender that was profitable through '08-'09 recession, as in their words, subprime borrowers are always down on their luck. OMF saw charge offs grow from 6.6% to 10.4% in their '06 cohort vs '08 loan cohort. Just hope you have the same confidence in the management team / underwriting if charge-offs grow a similar amount. 

See http://investor.onemainfinancial.com/Cache/IRCache/2e5fe00c-7211-989b-d4a5-f5e0cc764731.PDF?O=PDF&T=&Y=&D=&FID=2e5fe00c-7211-989b-d4a5-f5e0cc764731&iid=4405478

We’ll see. A major part of the thesis is their underwriting standards and loan profile is able to withstand COVID-underwriting
So far what I’m assuming, even with a 15% net charge off rate, they are still ahead. When I got in - it was about 5-6x earnings, so it was hard for things to go wrong unless their underwriting was absolute dog sh*t. Either way, they are still able to find new borrowers with their targeted data-driven approach.

If the portfolio is in run-off, they would be able to clear the debt in 20 months alone.

So it has hairs but so far it has rewarded me.

valueinvestor

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Re: GSY - GoEasy
« Reply #16 on: May 08, 2020, 11:32:31 AM »
Down 7%

valueinvestor

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Re: GSY - GoEasy
« Reply #17 on: May 11, 2020, 11:32:54 AM »
https://seekingalpha.com/article/4345792-goeasy-ltd-ehmef-ceo-jason-mullins-on-q1-2020-results-earnings-call-transcript

Earnings Call was Interesting.

There are some cracks in their loan portfolio but seems like they will survive.