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Cheers Theborn
I’m really wrestling with buying more at 206 which seems a break up valuation but am concerned the market knows something I’m missing as if the results are in any way poor the shares could tank but I’m already in to tune of £9K plus for 3000 shares so easily £3K out of the money so it’d be a case of doubling down risking a further £6K or £15K which is a pretty big poker hand for a rookie investor like me but what a rush if the shares recovered and ended up at £5
GLA and hoping for upbeat statement in July then fingers crossed
30 June is half year end date so assuming normal market reporting has resumed post covid, would expect a Q2 trading update and guide on interim figures sometime mid July.
Thanks Theborn a £1 jump would be just fine
I’ll think carefully and consider adding but just wondered where you got info they’re announcing some results next month as I don’t seem to be able to find any intel?
I've also had a nibble at 206.
Share price is currently 75% of the net assets of the company. It's trading well below a wind up valuation.
Look back to when FTSE250 hit this level and PFG is well below where it was at that same point in time.
Unless the next trading update next month is a total disaster, this needs a pricing correction of a good 50%, even in current climate.
I have been in and out of Provident since the days they were heavily shorted, around the 2008 recession. The business is now is unrecognisable from those days. I got back in around the bottom of the covid-dip and I am delighted to see the price where it is today because it gives me another opportunity to get further invested now the business is significantly de-risked since dodging the regulatory bullet and closing CCD. Vanquis is a star performer and is allowing management to explore growth options - I will remain invested until there is any sign of regulatory issues
If only I knew whether to buy or not
Ubik_Fresh
I think their car loan business should hold up too as the value of second hand vehicles will protect the company from impairment as long as scarcity of new cars holds which I think will be a while yet
I’m really tempted to buy at current levels but will need to divert cash from elsewhere to invest a meaningful sum
GLA DYOR and all that
Frustrating for sure. I honestly think it's a waiting game. If a good divi remains and they keep showing a steady recovery with focus on credit card business, I think it'll slowly tick up. Everything is a mess market wise right now unless you are in consumer staples or gas / oil.
This share really is an utter PoS.
Refer to my previous posts - same thing all over. Drops at 3x the market and recovers at 1x, which is why its approaching 50% below the market in the past 6 months.
Utter utter Trash.
If I had balls of steel I’d buy at 238 but I’ve already got 3000 shares at an average just over £3 so it’d be hard to average down so I’m just resigned to a long road back though it’d be nice to think that if news were to be good the shares would move rapidly up
Hope so Theborn I’m sitting with a substantial deficit I don’t really understand but assume it’ll take another trading update to start to move the share plus an upbeat forecast if that’s possible.
One thing I note is it’s difficult to get info on trading updates and announcements on their site which isn’t helpful
Barclays again coming out 2 days ago with a note reiterating £4.10 target and buy.
This misalignment to market is starting to become a farce. If you plot a simple 6 month chart comparing Ftse to PFG, PFG is currently down 30% and ftse is up 7%. That's effectively a 40% fall vs market despite positive trading updates and buy ratings and pricing upgrades. Algos keep hammering this share. It's due a huge catch up. It has to be due in my opinion.
Thanks Vind.
Likewise, I've probably been in for 5 years now (after the original fall from grace) and for no rhyme or reason you'll get a 10% increase on a flat market date - off the back of no rns, broker notes or otherwise.
12p dividend has been paid today.
Hi The Born,
Thanks for your posts on this. I kind of got to a similar figure to you for '22. I assumed this years profit figure from CC and Car finance - approx 203mn, took out £30mn for central costs, then applied the 40% figure which amounted to £69mn as a total divvy. Divide by 250mn gives a divvy of 27.6p. If you assume higher profits than '21 FY or lower central costs then I can see where the 30p comes from.
From experience though, we should be cautious, it only takes an big increase in bad debt provision to blow those figures out of the water!
If we put aside that pessimism though, longer term this should see an increasing divvy from an increasingly profitable company which I would hope would lead to a substantial rerating by the market.
What I would say,is that since I've been a holder, this share has increased in bursts, often over quite short timescales.
https://uk.advfn.com/stock-market/london/provident-financial-PFG/share-news/Provident-Financial-PLC-Provident-Financial-plc-Q1/88155038
For anyone who hasn’t read RNS
My understanding is the personal loan product is digital (so not doorstep) and currently in a pilot phase. This will be to a similar market segment as the rest of the portfolio (near / mid- prime, not sub-prime per old doorstep division). You'd also like to think this phoenix product will have learned from all the prior FCA-related interrogations.
The aim would clearly be to scale this so the business once again is three-pronged.
On 50-60p EPS for the current year (and 30+p dividend) the PE is c.4x still, which is bonkers. Must be a prime T/O target if larger banks have appetite to bolt-on. Personal view is the current valuation, even in the uncertain market, should be c.£5. And no reason in 2-3 years that shouldn't be £10 if the three arms continue to grow organically. But what do I know.
All my opinion of course.
Agree. Update seems fine, nothing spectacular but all stable and on target.
Tbh, I didn't know they still had skin in the personal loans business. I had assumed that was all gone with CDC.
Longer term, maybe a year or so, this could be a 1.7x - 2x gains, and lending seems like it'd be strong in an inflationary / touch environment for the consumer.
You've got to laugh - strong trading update - down 5% in first 30 mins of trading. F-ing amazing.
This share really can't ever catch a break. I'm going to top up again today.
Let's see what market thinks. Still a £5+ share trading blwow half price imo.
Theborn
I share your frustration
I think the problem with PFG is a perception that their near prime target market who are less used to budgeting represent a higher default risk as they struggle to pay bills and seek lenders like the company we own shares in.
My average is 80p above current price so I’m going to have to wait a while to be back in the money but will hold for st least one, maybe two sets of results to see if my loyalty isn’t misplaced! GLA and DYOR but if I didn’t already have a significant position I’d buy as a recovery stock
Once again the FTSE 100 / 250 recover losses and PFG lags behind. Drops 3% for every 1% fall in the FTSE 250 then recovers 0.5% for every 1%. Two steps forward, three back.
Waiting for the catch up. When FTSE 250 was at this level 6 weeks ago PFG was at 270p - so we've lost 10% vs the index in the recent dip. Makes no sense at all.
..... Couple of hours after saying more buys than sells there was a £13m sell ??. Price has jumped a little since. Those orders have probably been sat on the book for a while forcing price down.
Reiteration from Barclays yesterday - Overweight with Target £4.10.
Interestingly the Balance Sheet net assets per share alone is £2.05. So the shares are currently trading on a break-up basis.
Clearly, I take the point in a significant stress the loan assets would be worth less, but you take my point at how out of kilter the pricing is on this share. To my earlier point on the chats below, the last few days when FTSE 250 down 1-2% each day, PFG has been down 3x that amount. Today, when FTSE 250 is up 1%, PFG is up <1%. Despite being lots more buy trades than sells. So it gets hammered on 3x multiple on drops, and recovers on less than a 1:1 basis.
There has to be a big price correction soon in my opinion.
But if you believe the bear market will run until October then sell everything and buy back then.
The Bloomberg logic is a bit flimsy so I wouldn't pay much credence to it.