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

To: Paul Senior who wrote (61699)	2/7/2019 8:25:35 PM
From: Spekulatius	Read Replies (1) \| Respond to of 78711

ADS. I don't understand why the stock dropped so much this morning - the quarterly report looked good to me. Perhaps company's business model-- credit card/loyalty program is facing saturation (??) Historically, company has done well. Going forward -- market seems to be saying it won't be so good. I add to my position on assumption there's an overreaction today. Re ADS - Morningstar recently downgraded them. I think the issue is that what ADS managment calls economic earnings aren’t true earnings. ADS tends to add back amortization expense to their GAAP earnings to get “economic earnings”. The issue is that they often acquire credit card receivables that have a finite lifespan, as the contracts with the retailers often have a finite duration and may or may not be extended. I like DFD better and the balance sheet and earnings are very straightforward. I don’t own it though, I own a bit of COF in this space, which isn’t doing they well either.