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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (27443)	11/8/2007 12:01:40 AM
From: Spekulatius	Respond to of 78627

ADVNA, the interesting little credit card company went to hell in a hurry. I did not own it after trading it around. today I decided to get back in. The way I see it ADVNA is a binary play - it either works and should be a double or it goes broke. This is the situation as i see it: Tangible book value 14.%$/share. last quarter ADVNA earned 0.5$/share However, chargeoffs for their credit card portfolio went from 3% to 3.5%. This is a significant increase, although 3.5% is still better than average inn the credit card industry. ADVNA is a niche business as they only give out small business credit cards. Do they have problems to finance they receivables via securitization? I say no - they last securitization (a few days ago) was at libor +0.5% for AAA rated receivables. That is up from Libor +0.0X% securitizations from a year ago but hardly sounds like a catastrophe. FWIW, DFS last securitization was only slihgtly lower at prices at around Libor+0.35%. So I think they still should be able to earn money from securitization besides the interest income of course. So i think that ADVNA is unduly punished. There is no analyst covering it so I am following my own logic here, which may be faulty since i am by no means a financial wizard. A small bet anyways to reflect my lack of confidence in my own arguments. Insiders recently bought back some shares. i do not think it means much, especially with financials since i often found that they often underestimate the problems they have created themselves, but it does give me a little bit of confidence that they see a bargain as well.