Provident Financial Share Chat (PFG)

Relax, it's just over excitement.
Where are people going to borrow money from, because the banks sure as hell won't be lending it unless your the Queen!

Or PFG is being seen as a “bank“

The sector is being hit by impairment worries due to resurgence of virus cases maybe

Presumably there's been a drop in the SP due to Blackrock reducing their stake from 6.06% to 4.80%

Agreed. But we're in a very sensitive situation. I think there could be more downside risk at the mo with this one.

When banks are in trouble they stop lending and provident will increase lending, but I'm sure you know that..
Hence the provident advertising campaign, they can see what will happen.

Lloyds just broke 26p downwards and RBS is now at 102p.
PFG has been lucky to hold the 220p ledge. But I doubt it can hold this.

I send my regards to Malcolm Le May. Seems a really decent guy. Speedy recovery.

I see the heart radio network are running a provident loan advertising campaign, should really help as heart appeals to target area.

Just need SP to rise to 240p and she will rise above resistance

https://debtcamel.co.uk/provident-complaints-rise-offers-too-low/

RBS was around 220 b4 lockdown. Its now below 110.
Likewise PFG was around 480 b4 lockdown. So getting out at 242, I thought was reasonable to lock in a decent profit with potentially strong headwinds ahead.

Share Pick by Kirsteen Mackay (Motley Fool): Provident Financial

"Provident Financial (LSE:PFG) has said its business is picking up again after sinking to a £37.6m loss in the first six months of the year. It now plans to repay furlough money received from the government as its Vanquis Bank and Moneybarn subsidiaries remain profitable. It has streamlined its business through job cuts and should be stronger going forward.
As furlough payments come to an end, finances will be tight – and with Christmas on shoppers’ minds, I think Provident will continue to see a rise in doorstep lending. It has a price-to-earnings ratio of 7, though its dividend remains on hold. Kirsteen does not own shares in Provident Financial."

I saw this piece this morning in the Motley Fool from a market analyst. As well as not owning shares, Kirsteen Mackay doesn't seem to know much about the business either. Cold doorstep lending, as she is implying, isn't legal anymore, and in any case, PFG are collecting 80% of home credit receivables, now a minor arm of the business, through remote means. Activities of the major arms of the business are not conducted in the home or on the doorstep either. Even without that, the analysis is conjecture and even worse, customer exploitative, suggesting lack of knowledge of the company's regulatory history by the writer, and therefore reprehensible. The FCA is often looking in the wrong place when doling out its fines. It's high time some of these so-called analysts were brought to account as well for failure to check the facts and offering irresponsible 'advice'.

Money grabbers gone, now watch the MMs drive this back up to 245p again before another drop.
And so it unfortunately goes round and round.....

That's great. Maybe you made enough profit to buy a pint and a bag of nuts. A lot of your fellow short-termers must have joined you in bailing out this morning for a quick buck. Good luck to you, but I think that on the whole, it's more part of the problem than a way forward. Not even the analysts understand this business properly, unfortunately.

Sold out the entire holding this morning. 30% return in just over two months isnt too shabby.

Broker Shore Capital noted that the balance sheet “remains in good shape with capital headroom having materially increased since the start of the year, while the funding and liquidity position also remains strong”. 

Analysts noted that as a result of introducing more cautious economic assumptions into its IFRS 9 models, forward-looking impairments increased sharply resulting in an improvement in the overall coverage ratio for the group to 33.5% at the end of June 2020 from 28.3% at the end of December, saying “such coverage levels are significantly higher than found at mainstream lenders”.

With the shares have fallen by 57% in the year-to-date, versus a 20% fall in the FTSE All-Share Index, Shore Cap said they were trading at less than tangible net asset value, around four times forward earnings and a dividend yield of almost 13%, “despite the strength of the balance sheet and the scope for returns to increase to 20-25% over the medium-term”. 

“We believe there remain significant opportunities for a well-funded and well-capitalised non-standard lender to grow in the aftermath of the Covid-crisis given a likely increase in the number of available customers along with a reduction in competition.”

The results, agreed broker Peel Hunt, were “generally positive, showing that the business is proving resilient and trading better than internal plans”.

What about the end of furlough, mass unemployment and the greatest recession ever? Short as a buzz cut here .

Good news for provident as a large part of its business is issuing car finance.

From the FT
Car finance applications in the UK grew by a quarter during July and the first three weeks of August, as pent-up demand for vehicles spilled into the traditionally quieter summer months.

I hope they don't reinstate dividend this year, feel it would be better for long term investors if they pay down debt in these hard times.

No chance results for Q3 in November will be strong again and i think they will restart the dividend then also. I do agree that this we will have up and down periods on the way up 500p by Novemebr imo.

Apologies that should have read 235p!!

I think that's a tad optimistic rocket, think we will see it retract a touch after a rapid climb then we should start to increase.
I feel we could even see 135p next week but it's all part of the process
Think a good target over the next few months is a solid 275p

Boooom 250 resistance broken nothing holding back the share price now. This will quickly move above 300p.

I have read a few broker notes all the Buy recommendations. All share price targets were higher than current share price. This is undervalued at this price and I can see this being above 400p within 6 months imo

Too true DD - I get p*ssed when an article calls PFG a "door step lender" because it is a much reduced division and relates to an era that is basically over. I get the odd doorstep delivery and often they ring the bell and run away leaving the parcel on the floor. People live busy lives and lately has probably been the best time to find somebody in but they then don't want to answer the door. I went out yesterday and to get a drink they now want your details but handily there are apps (QR reader) that make it simple. I was talking to a waiter who took my drink order. He chatted then turned away as another waiter was there behind him with the drinks like magic (you have to take them off the tray). He had of course tapped the order on his mobile whilst chatting. I was like the Amazonian indian being shown a mirror for the first time. Younger people don't use cash that often that even I have been weaned off using it whilst their alacrity with technology is amazing.
I also think that PFG have thrown in the kitchen sink with impairments and redundancies almost always boost a share price. People will always need loans but the older age group who grew up with doorstep lending are disappearing fast and normally budget quite well and have less need to borrow. The target market for PFG aren't techno phobic and if anything are probably happier with doing stuff remotely. Door step lending is over so it would be appreciated if the terminology was dropped. It does though show that NSF has no future and they also promoted themselves as being the second largest in guarantor loans. That's a double dose of bad timing. The guarantor loan system (AMGO No.1) has no place in a modern society. All they do is place repayment responsibility vicariously and play on family ties and sentiment. They deserve to go under imo.
The world is changing fast and if I could buy TikTok I would. They are amazing and will change retail big time. They are misunderstood by almost everybody over 30. Once again it is old people not knowing how young people behave and react.

All the investment they have made in technology to collect money unfortunately means job losses, but a far more efficient business.