Your thoughts on TYR, MFG & CCP please
James, Your general advice/perspective on three quite different stocks at current levels following reporting please . . . CCP, MFG, TYR Thank you, Bernie
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Answer
Hi Bernie,
- Credit Corp (CCP): This is a recession stock, the time to buy it in our view is after bad debts meaningfully increase which gives them more available, cheaper inventory (which is the debts to collect). As they said at their recent results, they expect to make $200-250m in ledger purchases in FY24, a ~30% drop from the year just gone which will put more pressure on the company’s ability to hit expectations for outer years unless the available of ledgers ticks higher.
- Magellan (MFG): We like it for all the reasons we’ve written about here. A cheap turnaround play, with a solid balance sheet that we think is worth ~$12
- Tyro (TYR): The momentum / turnaround is actually building for TYR with a solid FY23 result reported in August. Theoretically , if CCP struggles due to low bad debts, TYR should be doing well and vice versa. We know consumption has held up better than feared, however a trade in TYR is dependent on ones view of the broader economy to a large degree.
