Ann: Letter to Shareholders , page-12

For those who were fortunate enough to more than double their dough on the COF deleveraging thesis, and who are looking to potentially replicate their gains, BOL appears to be a perfect analogue for COF.

Neither are good businesses by any stretch of the imagination; neither has favourable structural dynamics, and neither makes much in a way of accounting profits, but both generate significant free cash flows relative to their market values.

Both have significant levels of borrowings, but both have boards/management that are mandated explicitly (either by their shareholders or their bankers) to harvest the surplus capital in order to reduce borrowings.

With significant surplus capital generation, both companies will see their Enterprise Values fall sharply, therefore providing significant scope for Market Cap increases as Net Debt is extinguished.

The only difference is that COF is already about halfway through the process, which is partly being recognised by the market, while for BOL the journey has just begun.