CCP H1 release see attached.
HIGHLIGHTS:-

• 10% increase in NPAT to $42.3m
• Strong US debt purchaser PDL doubling $8.0m NPAT
• Record half yearly PDL investment driven by Collection House purchase
• Strong recovery in consumer lending volumes in December quarter
• Upgraded full year outlook to the following:-
  •  Forecast NPAT $85 - $95m
  • Forecast EPS 126 - 134c

I think the market underestimated the benefits of the macro environment for CCP would have. Tailwinds are definitely coming through now with 2 x upgrades in 3 months. 

The company appears fully priced now. But i am a happy holder. 

The Aus Govt announced reversal of responsible lending laws on Sept 25th 2020. Since that day Creditcorp has rallied ~27%. Is this a coincidence? Or is the share price just bouncing within a range? Maybe the market thinks this is a genuine tailwind?
If CCP holds above $21 id say the market thinks its the latter. Which I agree with. Irresponsible lending leads to more bad debts and more opportunites for Creditcorp. 

Credit Corp are the best of breed here in Australia. The management is excellent with proven track record. Their competitors have literally been falling over and i expect Credit corp to strengthen its dominance and increase market share here. I see this as an easy turnaround story with great upside in the next 2 years.

Its primary growth though is in the USA where it is relatively new player. Management have confidence their systems and processes are market leading and will serve them well as they penetrate the large US market. With collections in the US up 55% over the last year i expect this trend to continue, with a long growth runway overseas. Their growth may be slightly impaired FY21, but i am expecting FY22 to be a real breakout for Credit Corp in terms of growth. Balance sheet has been beefed up with a recent capital raise, which was used to pay down some debt and position themselves to take advantage of opportunities which arise.

Its financial metrics are quality for this type of business;

5-year ave ROE~20%

5-year ave ROC~14%

net margins~22%

Debt/Equity~0.09

Longterm EPS growth rate ~14.51%p.a

1. TTM EPS  1.41
2. Estimated growth rate 9.07%
3. future pe 15.58
EPS be in 5 years time
(1.09)^5 x 1.41 = $2.169 x PE ratio = 33.8
Future share value 33.8
Fair value now = 16.90
Margin of error (25%) = 12.675