CRMT: I prefer to look rear-view. Company has been profitable every year past 10, has increased stated bv each year, has bought back stock. Repro rate is important to the company sure, not to me in making a buy of the stock. Because company has always had repossessions as a factor, and in my view they'll continue be a factor, and I expect the management will deal successfully with this, as they have done in the past. Similarly, maybe higher interest rates are a threat: company over past ten years has dealt successfully (in my view) with higher interest rates. So I'll bet they'll do same if/as/when rates move up.
The concerns I have are: 1) higher d/e than historically; 2) apparently stiffer competition than past years (Company always has competed against local "buy here/pay here" stores, so I don't know why competition is now more severe.); my wariness of management, even after my watching the company for many years. (As your linked article implies, management has several ways to manipulate numbers. One would be fair value for cars sold and for cars repossessed.)
Meanwhile, a small position for me, which I expect I'll hold 18-24 months to see how business progresses. |
