My First Stock Analysis

Update: Sold out in late 2016 for a small profit. Auto loan default risk is getting high

Consumer Portfolio Services (CPS)

The company’s business is to purchase and service retail automobile contracts originated primarily by franchised automobile dealers and, to a lesser extent, by select independent dealers in the sale of new and used automobiles, light trucks and passenger vans. The company’s automobile financing programs are designed to serve sub-prime customers, who generally have limited credit histories, low incomes or past credit problems. The company provides seven different financing programs to its dealership customers: First Time Buyer, Mercury / Delta, Standard, Alpha, Alpha Plus, Super Alpha, and Preferred

Key Metrics:

  • Price: 3.99
  • PE:3.75
  • PEG (5 yr expected) :0.21
  • P/S (ttm) :0.56
  • Book Value:7.21
  • P/B: 0.55
  • Operating Cash flow & Free Cash Flow: positive for last few years
  • EPS : positive for last 5 years. Negative from 2008-2011

Competitors :

Industry – PE – 13.46, PEG – 1.23, P/S: 3.64

  • Santander Consumer USA
  • GM Financial/AmeriCredit
  • Capital One
  • Chase Custom
  • Wells Fargo
  • Westlake Financial
  • Credit Acceptance Corp.PE – 13.03, P/S – 5.43, PEG (5 yr expected): 1.93
  • Exeter Finance Corp.

 

Insider Transactions in the last 12 months

Owner Relationship Date Transaction Cost # Shares Value($) Total Shares
SECOND CURVE CAPITAL LLC 10% Owner May 04, 2016 Sale $3.73 27,000 100,788 2,463,788
SECOND CURVE CAPITAL LLC 10% Owner May 03, 2016 Sale $3.91 10,000 39,078 2,490,788
SECOND CURVE CAPITAL LLC 10% Owner Apr 28, 2016 Sale $4.03 5,000 20,136 2,500,788
SECOND CURVE CAPITAL LLC 10% Owner Apr 26, 2016 Sale $4.43 3,600 15,937 2,505,788
SECOND CURVE CAPITAL LLC 10% Owner Apr 25, 2016 Sale $4.38 5,000 21,906 2,509,388
SECOND CURVE CAPITAL LLC 10% Owner Apr 20, 2016 Sale $4.41 5,000 22,034 2,524,388
SECOND CURVE CAPITAL LLC 10% Owner Apr 22, 2016 Sale $4.29 5,000 21,438 2,514,388
SECOND CURVE CAPITAL LLC 10% Owner Apr 21, 2016 Sale $4.33 5,000 21,634 2,519,388
SECOND CURVE CAPITAL LLC 10% Owner Apr 15, 2016 Sale $4.37 5,000 21,844 2,529,388
SECOND CURVE CAPITAL LLC 10% Owner Apr 08, 2016 Sale $4.19 10,000 41,856 2,534,388
SECOND CURVE CAPITAL LLC 10% Owner Apr 01, 2016 Sale $4.22 10,200 43,039 2,544,388
SECOND CURVE CAPITAL LLC 10% Owner Mar 18, 2016 Sale $3.92 10,000 39,172 2,554,588
SECOND CURVE CAPITAL LLC 10% Owner Mar 16, 2016 Sale $3.89 6,000 23,362 2,564,588
SECOND CURVE CAPITAL LLC 10% Owner Mar 10, 2016 Sale $4.25 5,000 21,241 2,570,588
BRADLEY CHARLES E JR President and CEO Dec 30, 2015 Option Exercise $1.50 40,000 60,000 1,817,288
Harton John Patrick Sr. Vice President Dec 30, 2015 Option Exercise $1.50 5,000 7,500 40,250
TERRY CHRIS Sr. Vice President Dec 18, 2015 Option Exercise $5.20 13,270 69,004 84,122
TERRY CHRIS Sr. Vice President Dec 18, 2015 Option Exercise $1.50 46,000 69,000 97,392
Adams Chris Director Dec 16, 2015 Buy $5.09 3,000 15,270 13,000
Adams Chris Director Dec 15, 2015 Buy $5.01 10,000 50,052 10,000
Washer Greg Director Nov 30, 2015 Buy $4.68 5,000 23,400 317,744
Washer Greg Director Nov 27, 2015 Buy $4.71 5,000 23,550 312,744
Straten Laurie Sr. Vice President Nov 23, 2015 Option Exercise $1.50 10,000 15,000 35,250
Robinson Teri Sr. Vice President Nov 23, 2015 Option Exercise $1.50 10,000 15,000 121,800
Fritz Jeffrey P Sr. Vice President Nov 23, 2015 Option Exercise $1.50 20,000 30,000 130,000
POWELL CURTIS K Sr. Vice President Nov 05, 2015 Sale $5.48 9,100 49,871 217,180
Washer Greg Director Oct 20, 2015 Buy $4.79 15,000 71,900 307,744
Washer Greg Director Oct 19, 2015 Buy $4.82 10,000 48,200 292,744
Washer Greg Director Sep 15, 2015 Buy $5.31 2,000 10,620 282,744

 

Conclusion:

Given the current low book value and expected growth. I am long CPSS.

Disclosure: I have no position in CPSS at the moment.

Latest Quarter Results Presentation: