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Pcf Grp Share Chat (PCF)



Share Price: 26.70Bid: 25.40Ask: 28.00Change: 0.00 (0.00%)No Movement on Pcf Grp
Spread: 2.60Spread as %: 10.24%Open: 26.70High: 26.70Low: 26.70Yesterday’s Close: 26.70


Share Discussion for Pcf Grp


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RazorShultz
Posts: 41
Off Topic
Opinion:No Opinion
Price:26.70
RE: Pcf group
12 Jan '18
Probably because no one has heard anything in the way of news yet, and the share isn't popular or known much. The market thrives on activity so some drift in price is to be expected. But good news for you and us lot here, this is a company with good fundamentals and we can top up whilst we're at this level.
 
jarus
Posts: 251
Off Topic
Opinion:Strong Buy
Price:26.00
Pcf group
10 Jan '18
The shares are cheap and company trading well ahead of expectations....why the fall in share price...should be reaching higher then previous records...manipulation?
CC2015
Posts: 486
Off Topic
Opinion:No Opinion
Price:26.00
RE: More
9 Jan '18
I'm guessing that the 2x200k's are MM to MM trades leaving the 300k to be found from somewhere.

Buyers seemed to come out as soon as the offer dropped a bit. Happy to pay 26.0, 26.34 and one more later at 26.8.

Guessing that buyers are sitting in the wings hoping for a bit better price. Currently 26.85 to buy in decent volume and 25.6 to sell
FredRubble
Posts: 868
Question
Opinion:No Opinion
Price:27.00
More
5 Jan '18
delayed share transactions 2 x 700K & 2 X 200K showing as 3 buys and 1 don't know!!
Why the "cloak and Dagger" approach?
Could these be Placing shares changing hands?
CC2015
Posts: 486
Off Topic
Opinion:No Opinion
Price:28.50
RE: Buy or Sell?
19 Dec '17
I'd say it's a buy because we see the sell volume going through at 27 and the rest of the buys have been at 28.4/28.6 recently and yesterday the offer moved up.

Also, someone has had to pay 30 today suggesting the MM's don't have any stock left they want to let go below that.
FredRubble
Posts: 868
Question
Opinion:No Opinion
Price:28.50
Buy or Sell?
19 Dec '17
Any thoughts as to whether today's 638,000 share transaction was a Buy or a Sell?
RazorShultz
Posts: 41
Off Topic
Opinion:No Opinion
Price:28.00
RE: My view
14 Dec '17
Nice analysis there. I don't pay much attention to macroeconomic factors purely because I don't know much about them (well, that and the fundamentals are more important) but it's good to hear reassuring points about them anyway. I also think the management are pretty good and I think I'd like to hold this for the longer term. I want capital appreciation and dividends here and I don't even have a target sell price myself. Well, like Buffett once said, his favourite holding period is forever.
CC2015
Posts: 486
Off Topic
Opinion:No Opinion
Price:28.00
RE: My view
13 Dec '17
Part 2 due to the word limit

3. Maybe there will be a load of bad debts in the future? You can assess this yourself on page 12 in the above link. The bad debt write off charge has dropped from 5% in 2009 to 0.5% today and given high levels of employment I see no reason for this to worsen anytime soon. PCF only loan to prime credit customers and don’t do PCP and continue to pursue this policy and the percentage of business within the top 4 credit grades increased to 63% from 57% all year.

4.Maybe the government are going to investigate them for inappropriate lending? PCF are at the complete opposite end of the market to PFG only doing prime and no sub-prime but yet I suspect PFG is dragging down PCF share price by association.

5. Maybe the balance sheet hides a load of issues? Page 18 of the presentation is pretty clear. Of their £172m of assets, there is £2.7m of intangibles. I’m always suspicious of intangibles. In this case I suspect it’s the investment in the new banking software but whatever it is, it doesn’t really matter. Even if the £2.7m is actually worth nothing, it doesn’t affect anything as it’s negligible in size to the market capitalisation and future profits

I can’t find any skeletons in the cupboard other than general Brexit scaremongering. I will be holding long term. The presentations set out the strategy and gives me a high level of conviction this will be a multi-bagger, even thought it's already multi-bagged if you bought back in 2011
CC2015
Posts: 486
Off Topic
Opinion:No Opinion
Price:28.00
My view
13 Dec '17
PCF has two areas of business split roughly 50/50:
1. Lending to consumers for cars
2. Lending to business for vehicles, plant and equipment

It has historically funded the lending through the wholesale market and retained earnings but around March became a bank and since then is shifting from the wholesale market towards retail deposits on fixed rate bonds. This significantly reduces its costs long term (or improves NIM – net interest margin) but this has not yet showed up in the finance figures as it’s only been a few months and there have been set up costs to becoming a bank.

It currently has a portfolio size of £146m, which grew by 20% last year and plans to increase this to £350m by 2020 and £750m by 2022. The banking license and being able to take retail deposits is the trigger for this.

PCF currently has a market cap of £59.4m based on a share price of 28p per share, Net assets of £39.6m. If you run the P/E calculation based on underlying profits of £5m, corporation tax rate of 19% it gives a P/E of 14.7. The P/E calculation takes no account of assets though so it would seem better to look at this based on a multiple of future earnings.
On this basis the market capitalisation exceeds the net assets by £59.4m-£39.6m= £19.8m which is only 4.9 years profits after tax.

In summary my belief in this trade is based on:
1. The market cap is only 4.9 times current profits once existing assets are allowed for.

2. The 4.9 multiple is based on current profits. If the portfolio grows fivefold at an improved NIM then it’s clear the market cap will be higher than £59m. One could make an estimate of this. (Speculate a five bagger minimum?)

3. Although PCF have stated they have no plans to cross sell other products as a bank, they do have a banking licence. There is a thought in the back of my head that 5 years down the line, their ambitions will be different than they are today. The success of Shawbrook, Aldermore, OSB, PAG and the other challenger banks is bound to start to look attractive at some point in the future as the balance sheet strengthens.

But maybe there’s a reason the share price is so low? I’ve checked the following:
1. Are the directors credible? Who knows but I’ve met Scott Maybury the Chief Executive present at an investors evening and he seemed sensible enough to me. All the directors and non-execs have been buying shares over the last year which is always a good sign

2. Is the business plan any good? Rather unusually for AIM it’s set out and available on line in this documentation pages 7-11: https://pcf.bank/media/1430/preliminary-results-presentation-december-2017.pdf

3. Maybe there will be a load of bad debts in the future? You can assess this yourself on page 12 in the above link. The bad debt write off charge has dropped from 5% in 2009 to 0.5% today and given high levels of employment I see no reason for
BuyHold
Posts: 77
Observation
Opinion:No Opinion
Price:27.50
RE: Stockopedia article
12 Dec '17
I agree with your analysis RazorShultz. Also, as Ben Graham said, in the long term the market is like a weighing machine. If PCF can continue to deliver on its plans, as it has in recent years, the projected growth in eps will produce a substantially higher share price.




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