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

To: Paul Senior who wrote (27729)	8/10/2007 9:35:40 PM
From: a128	Read Replies (1) \| Respond to of 78717

There will ALWAYS be a market for BHPH cars. Its just the low cost operators that make the money at it. That means you cant have a $75,000 a year general manager for each location. You cant have a few $60,000 + all you can steal buyers. You cant have commissioned sales people who only get paid on the sale rather than with each payment. You cant pay a repo service the same rates that GMAC does, you do it yourself or have some low waged folks doing it for you. You've also got to have affordable mechanics. You cant pay guys $40-50k a year to work on your cars. The keys with BHPH is the car HAS TO LAST. When it stops running, the customer stops paying. The customer also stops paying when he loses his job or his kid gets sick and has to go to the hospital and so on and so forth. The problem is you just cant expand to multiple locations & keep expenses in check. Oh, sure, maybe a guy can manage 3-4 locations with the help of friends, family & employees he has had for years in a city but on a grander scale, its almost impossible to do it right because doing it right eats all the profit up. Its HARD too. Most of the people get paid weekly. A few every 2 weeks. Thats how you HAVE to get them to pay. Every payday. These people cannot save up and pay once a month. (except fixed income folks that get monthly checks) Impossible. Too many competing places for that money to go. That being said, I own shares in STEN which is pretty much trying to get into both the BHPH business and financing business. They are willing to pay 13-15% on notes. I think they overpaid bigtime to get into the business and I think they are overpaying for borrowing. Im just not sure he knows what he is doing. What is STENs competitve advantage ? I cant tell you.There are dozens of firms that have been buying subprime paper for years. They have experience. Why would someone use STEN ? Only reason I can think of is because they might be willing to buy paper others wouldnt. Supposedly, they can put back the repos to the dealer but they are also floor-planning the dealers which makes me wonder if their reserve isnt painfully low. Im afraid to ask the CEO because Im afraid he doesnt know and has visions of grandeur regarding the profit potential. But, the CEO buys everytime the stock pulls back and he offered some pretty big forecasts for a $4 stock... "Given the current expectation for growth at STEN Credit, the company is projecting an overall 2008 net earnings per share in the $.30-$.50 per share range, and under current assumptions for fiscal 2009, STEN earnings are expected to grow more than 100% from this level in the 2009 fiscal year." They also raised cash in a private placement with Lyle Berman & another guy who owns a chain of payday loan places. They each bought a bunch at $4.50 over a year ago. Before this new business was bought into & started up. I made a bunch following Berman into LACO years ago. If STEN goes belly-up, Im going to be able to say I saw it coming. I guess Im hoping he knows what he is going despite no experience. Maybe I'll dump it if we get a pump & dump. These low float stocks are good for occasional pump & dumps. Of course, the SEC cracked down on some of the scammers so theres less of it now. He owns about a million worth of stock so he has more skin in the game that I do. As do Berman and the other guy. (A million each - 222,222 shares at $4.50 each.) finance.yahoo.com

To: Paul Senior who wrote (27729)	6/27/2008 3:46:45 PM
From: Bananawind	Read Replies (2) \| Respond to of 78717

CRMT - Interesting how the the numbers have improved on this one in recent months. I would have expected the opposite but it appears that they are getting their act together once again. I'm not sure what it is. Good mgmt? Locations in the heartland? Demand for fuel efficient used cars? Lack of alternative financing? Whatever it is, they hit another 52 week high today. Earnings were released yesterday: Highlights of fourth quarter operating results: * Net income of $6.048 million ($.51 per diluted share) vs. $2.1 million or $.17 per diluted share for the fourth fiscal quarter of 2007 * Overall revenue increase of 29.1% with same store revenue growth of 30.3% * Retail unit sales increase of 25.3% * Net charge-offs as a percentage of average finance receivables of 5.9% compared to 8.5% for the fourth quarter of 2007 * Provision for credit losses of 20.0% of sales compared to 26.6% for the fourth quarter of 2007 * Gross margin of 43% of sales compared to 41.5% of sales for the fourth quarter of 2007 * Accounts over 30 days past due down to 3.1% at April 30, 2008 compared to 3.4% at April 30, 2007 * Finance receivables growth of $10.3 million, stock re-purchases of $1.3 million and capital expenditures of $.5 million, with a $.2 million decrease in total debt