What’s Happening to Credit Corp’s Share Price?

The share price of Credit Corp Group Ltd [ASX:CCP] is up today, trading strongly at $23.82 at the time of writing.

First half results posted back in January revealed a 13% increase in net profit. And US revenues were growing strongly at 71%. The company also upgraded its 2019 outlook.

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What does Credit Corp Group do?

Credit Corp’s main business is buying overdue debt. They buy the debts that banks and other service providers have given up chasing. They buy the bad debts for a song and keep all the profit on whatever the debt they collect.

It operates mainly in Australia and New Zealand and now is gaining traction in the huge US market.

As well as purchasing debt from other service providers, they also offer their own consumer loan lending service.

What now for Credit Corp shares?

The share price is currently trading close to the all-time high of $24.11. Should it start trading above that level in the weeks ahead, then it becomes a stock you could study on your own.

I don’t have a crystal ball, but here’s a forecast.

Should we get a decisive break above $24.11 in the coming weeks, the full year results due to be posted in late July are likely to reveal good profit growth. Let’s wait and see.

What it means for the broader economy?

The share price is trading just under all-time highs. It’s telling you their own consumer loans are growing strongly. And that that they’re collecting a good portion of the debts they buy from other companies.

This is a company you could watch to get a feel for the broader economy. And none of that suggests the consumer is stretched, or feeling the pinch.

If the share price starts trading higher in coming weeks, full year results due to be posted in July are likely to be strong and brush aside any talk of a collapse anytime soon.


Terence Duffy,
For Money Morning

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Terence Duffy is an analyst and chartist, specialising in researching economic trends and cycles.  His primary focus is housing and land affordability. But you can also depend on him to offer his unique analysis of stock market charts. As Terence will show you, the charts often forecast, well in advance, the good or bad news to come.

Money Morning Australia