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GoEasy Financial is working on remaking itself.It is keeping it's delinquency rate down and secured lending up.At the same time this blog has recommended that it make some combination or even an outright acquisition of Street Capital Bank-a small fairly new Tier1 bank.There has been an acquisition of Street Capital Bank by an unknown company called RFA.It is not known whether GoEasy is connected directly or indirectly with RFA.But if it is then GoEasy will have a number of new products to offer it's customers.If handled correctly and slowly this could increase revenues dramatically.But of course some of their new banking products will meet with competition in the small Canadian market.
First Quarter Highlights
GoEasy is a consumer loan specialist and so their loan portfoloio increased by 46% over 2018 to $602 million.At the same time revenue increased by 22% to $140 million.More importantly e.p.s. increased by 53% or from $.77 to $1.18 per share.
Safety First
They also enhanced their plan to lend in Quebec which will give them further growth.GoEasy also tells it's shareholders that secured lending increased from 4% in 2018 to 12% in Q1 2019.This strategy and others has kept their delinquency rate down to 4.4% which is consistent with 2018.In fact, the CEO says that "1 in 3 Easy Financial customers graduated to prime credit and 60% increased their credit score within 12 months of borrowing from us."GSY also takes care of shareholders by repurchasing 283,500 shares at an average price of $41.75 per share.
Larger Market
GoEasy has a quite successful market niche and as can be seen from above they have improved this market over time.This alone should allow earnings to grow by 40 to 60% for a number of years.But GoEasy has decided to gradually increase it's banking products.If this is done slowly and carefully it should strengthen the company even further.A Go Easy credit card and line of credit (over $15,000) may not be too far away.But Go Easy mortgages may likely never appear.Look for annual e.p.s. of $.50 to $5.00 for 2019 and this should allow the price to gradually move towards $58-$60. https://www.otpp.com/homehttps://www.info.com/serp?q=cpp%20canada%20pension%20plan&segment=info.0419&s1aid=8515556047&s1cid=1628428016&s1agid=57491951010&s1kid=kwd-300114431469&utm_source=adwords&gclid=Cj0KCQjwyLDpBRCxARIsAEENsrL8xz00HWInfPMwKPQKt5Srbq4VGKkznQGq8KUkTn1zTbIX-T3s4T8aAmZ1EALw_wcB
On May8 Tucows released it's first quarter results and they were as this blog expected.And that is chiefly because Tucows is either still making revenues from domaine names or at least telling investors that they are.This has caused the stock price to be on a roller coaster.It was trading around $120 a share in January and February and this blog believed that investors thought that they owned a number of hardware and online advertising companies.As they gradually learned that Tucows was only in domaine names the stock price fell to $83 at the release of the quarterly report.After results had been absorbed the price fell further to it's $80 price level.Now it does not appear so stylish and modern but it is still buoyed by it's ample profit.
First Quarter Highlights
Tucows tells shareholders that it's mobile internet service company called Ting is operating in it's eighth American town-Fullerton, California.However total Ting revenues plus revenues from domaine names has fallen since Q1 2018 by18% while net income dropped by 25%.Basic e.p.s. dropped by 26% and adjusted EBITDA by 9%.So their financial indicators all show to varying degrees that financial performance is starting to falter.
It is not clear how revenues are earned.For example, how much revenue is recurring and how much is one time only.It is also not clear if Ting makes any income at all it seems to have very heavy investment and little revenues coming in.But it is starting to be more clear that the growth in revenues is faltering.It is also clear that Tucows has a small capital structure with only 10.5 million shares outstanding.
A New CEO
This blog has warned the CEO,Elliott Noss, to diversify out of domaine names.And that a discussion of Ting does not belong as a highlight;it is only a footnote.Tucows lost a good opportunity to buy Yellow Pages and get into the Quebec market and into online advertising.Domaine names is too specialized to count on as your only revenue source.In addition, Tucows has a very tight capital structure at 10.5 million shares.It should have raised more equity when the stock was trading at $120/share, http://www.caissepopulaire.ca/https://www.laurelhill.com/
