CLH - Collection House

[System]

Collection House Limited (CLH) is a group of companies headquartered in Australia, operating globally and delivering a range of financial services including receivables management, debt collection, insurance recovery and claims management, debt purchasing and recovery, credit reporting and corporate risk rating in Australia and New Zealand.

http://www.collectionhouse.com.au

 

[JellySausage]

Anyone holding CLH atm?

P/E ratio of 7.58
Div Yield 8.4%

Earnings up 23% for this year.

The price has been going down recently. Help me out guys, what am I not seeing?

 

[ParleVouFrancois]

It's a pretty small company, so the liquidity issues will always ensure that it's undervalued imo (most people won't buy in unless they can liquidate their holdings in a single day). The company itself however, seems to be very well run, I've just had a look through the presentation, this seems to be somewhat of a niche company, so I'm not sure how long the growth rates it's currently achieved can be sustained. There is a new COO, who might change things up a bit (perhaps long term investors are worried that he might be a hoarder, and go on an acquisition spree?). However CLH overall seems to be a good fundamental investment for a few years, if it keeps growing at say 10%, and the dividend is maintained at current payout ratios, it all adds up to a handsome return.

 

[JTLP]

It's a pretty small company, so the liquidity issues will always ensure that it's undervalued imo (most people won't buy in unless they can liquidate their holdings in a single day). The company itself however, seems to be very well run, I've just had a look through the presentation, this seems to be somewhat of a niche company, so I'm not sure how long the growth rates it's currently achieved can be sustained. There is a new COO, who might change things up a bit (perhaps long term investors are worried that he might be a hoarder, and go on an acquisition spree?). However CLH overall seems to be a good fundamental investment for a few years, if it keeps growing at say 10%, and the dividend is maintained at current payout ratios, it all adds up to a handsome return.

Try CCP - and have a read of that story haha.

They are on the right track though and are proving handsome for current holders. Why not check them and compare?

 

[Math]

Anyone holding CLH atm?

P/E ratio of 7.58
Div Yield 8.4%

Earnings up 23% for this year.

The price has been going down recently. Help me out guys, what am I not seeing?

Price going down and volumes up - note an overseas FM has disclosed they are selling down - on market. Fundamentals are strong and would support higher prices once stock overhang is traded. Disc: interests in CLH

 

[robusta]

Anyone holding CLH atm?

P/E ratio of 7.58
Div Yield 8.4%

Earnings up 23% for this year.

The price has been going down recently. Help me out guys, what am I not seeing?

Interesting company.

The cash flow looks good but the ROE is a bit low and the debt/equity is a bit high for me.

I will add to watch list and look for improvements.

 

[skc]

Interesting company.

The cash flow looks good but the ROE is a bit low and the debt/equity is a bit high for me.

I will add to watch list and look for improvements.

Debt/equity ratio for CLH needs to be looked at slightly differently imo. They are essentially a small finance company, borrowing to buy receivables and hopefully collect more than what they've paid for and make some profits in the process. So debt will be higher than most other companies.

Since debt is needed to purchase those receivables. The key metric for them has to be return on capital (i.e. equity and debt spent on purchasing the debt). Although one would thought that if they are good at ROC, it will be reflected also in ROE...

 

[Basilica]

Hi folks, Not sure what to make of this company. They buy debt. had a 5.8m cap raising recently to buy more debt. If we assume my prediction of the economy is going downhill. is this good or bad for this company.
thought 1 , it is good for the company as a debt collector
thought 2 , it is bad as they may not collect on the debt they bought.
I am a newbie investor
Cheers

 

[McLovin]

Hi folks, Not sure what to make of this company. They buy debt. had a 5.8m cap raising recently to buy more debt. If we assume my prediction of the economy is going downhill. is this good or bad for this company.
thought 1 , it is good for the company as a debt collector
thought 2 , it is bad as they may not collect on the debt they bought.
I am a newbie investor
Cheers

CCP is better, IMO.

CLH is like CCP was 5 or so years ago. Buying PDL's with debt. It's funny that CCP keep saying that the price for PDL's is rising, which is curbing their buying activities because at current prices many don't meet their return criteria, but CLH is accelerating its buying program...

 

[VSntchr]

CCP is better, IMO.

CLH is like CCP was 5 or so years ago. Buying PDL's with debt. It's funny that CCP keep saying that the price for PDL's is rising, which is curbing their buying activities because at current prices many don't meet their return criteria, but CLH is accelerating its buying program...

I agree with McLovin on this one...CCP is generating so much cash at the moment that they are paying increased dividends along with ~$10m in principle debt reduction each half...if they keep this up then they could be debt free by FY12...thus giving them the chance to BOOOST dividends/buyback shares..or futher fund expansion... Much more brightside with CCP IMO...

 

[ROE]

I agree with McLovin on this one...CCP is generating so much cash at the moment that they are paying increased dividends along with ~$10m in principle debt reduction each half...if they keep this up then they could be debt free by FY12...thus giving them the chance to BOOOST dividends/buyback shares..or futher fund expansion... Much more brightside with CCP IMO...

that is because

CCP has a competive advantages over these guy
you find out what it is if you read all their annual report going backs a few years.

CCP is like DMP they use technology to their advantages.

their business isn't high tech but they applied high tech perfectly to their business.
awesome combination when technology drive efficiency and productivity

 

[Math]

What's the view on this one now ? Recent rally still in play.

 

[richbb]

Collection House--CLH: Chance to bounce!

CLH has been down for straight 9 days, it closed at 1.38 today from about 1.7, down 20%. With the volume of 823K,it went low of 1.325. It looks the correction is near end and tomorrow will be crucial time for its share to rebound.

 

[richbb]

Re: Collection House--CLH: Chance to bounce!

CLH has been down for straight 9 days, it closed at 1.38 today from about 1.7, down 20%. With the volume of 823K,it went low of 1.325. It looks the correction is near end and tomorrow will be crucial time for its share to rebound.

CLH bounced from last Friday and today up 7c, closed at 1.50, it looks very strong, the only concern is the volume, only 250k for today, it's ok but not so big. Hope tomorrow is another up day for CLH!

 

[Guardian2014]

$1.85 ATM

NPAT up 16.22% for the half year to Dec 31 1013

Interim Div of 2.9 cents

Looks like this stock hasn't been bad to people.

 

[PinguPingu]

Big break out recently on good profit result, seeing it being spruiked everywhere by Motel Fool and others though.

 

[VSntchr]

Big break out recently on good profit result, seeing it being spruiked everywhere by Motel Fool and others though.

I ran some quick numbers on CLH after the result as I hold a position in CCP.

One such metric I came up with showed that CLH is still turning over PDL's much slower than CCP.

PDL turnover for CLH 0.45x = (CCP = 2.11x)


One question for anyone following CLH, how do they handle their PDL carrying value? I see a $38.8m fair value adjustment last year but can't find anything this year! I also see they have changed the accounting entry method since July 2013...but I am still left scratching my head a bit....

 

[Gringotts Bank]

Long way down from recent highs of 2.40.

Pays a good divi.

Been fairly hammered. Maybe time for a move up. Fundamentals all ok?

 

[galumay]

Long way down from recent highs of 2.40.

Pays a good divi.

Been fairly hammered. Maybe time for a move up. Fundamentals all ok?

I think CCP are a much more compelling buy at their current price - alsooff a fair bit from recent highs.

 

[Gringotts Bank]

I think CCP are a much more compelling buy at their current price - alsooff a fair bit from recent highs.

ok thanks. I've been studying the chart and it just looks too bearish to get involved here.

Something will happen, that's for sure - It will either drop through the floor or put on 20%. It just seems a bit more like the former at the moment but I'll jump on if it puts on 5-10% from here.