I agree about the team invest people on there, they talk about earnings and growth rates which is great because every second caller is on about a small resource company. I was just having a dig because I read it is extremely expensive for what it is.
Are you only assuming earnings CAGR of 5% over the next 5 years or so for that valuation?
If it is than I think that is overly conservative and you're on even higher margin of safety. They do only have 2% market share in used car auto finance. Doubling their earnings over next 5 years would be 15% CAGR, not a stretch of the imagination by any means. Obviously they have to fund that loan book by you get the idea.
15% CAGR is about 6 bucks, though a trailing PE of 33 seems unlikely at this stage
Somewhere in that 3+ range is more likely, it's no CSL haha.
