The Credit Corp Group Ltd (ASX: CCP) share price has rocketed 26.7% higher so far this year and nearly 5,000% since IPO – but are the Aussie debt collector's shares in the buy basket?
What did Credit Corp announce this morning?
Credit Corp Group announced that the offer period for its previously announced Share Purchase Plan (SPP) closed on Friday afternoon with an issue price of $20.45 per share – the same as its $125 million institutional placement in April 2019.
The SPP was undertaken to provide all eligible shareholders with the opportunity to subscribe for up to A$15,000 worth of New Shares, without incurring brokerage or transaction costs.
Management said that due to significantly exceeding the target raise of $10 million, the Board has decided to exercise its discretion under the SPP terms to scale back applications to $15 million on a pro-rata basis.
In total, approximately 734,000 shares will be issued under the plan with a planned issuance date of 10 May 2019.
What else has been happening for Credit Corp?
In early April, Credit Corp increased several FY19 guidance figures including:
- PDL acquisitions: Upgraded guidance by $5 million to $200 million – $215 million
- Net lending: Upgraded guidance by $5 million to $55 million – $60 million
- NPAT: Guidance maintained at $69 million – $70 million
- EPS: Guidance maintained at 144 – 146 cents per share
Is Credit Corp in the buy basket?
IPO investors in Credit Corp would have realised a whopping 4,955% return on investment from December 2000 until today, meaning a $10,000 investment would have netted you a cool $49,553,191.
Even adjusting for 2% per annum inflation, that $10,000 would still be worth a more-than-handy $34,000,000 in today's money.
In terms of the Financials sector, I think Credit Corp has greater potential for growth than the major banks at this point in the cycle, particularly if we start seeing an increase in defaults in Australia's debt-laden housing sector.
For those who are looking for more growth options on the ASX, I'd suggest checking out this top-rated stock in the booming $22 billion cannabis industry could give you the edge as a growth investor.
