goeasy (GSY-T)

Stock performing very well. Compared to peers in sector - not as highly valued. Excellent management team that is executing well. Single digit P/E multiple with further growth ahead - great for investors. 

It has a very high ROC and is one of the only companies in Canada that has grown revenue 30% over 10 years and earnings by 20% over 10 Years. It raised its 3 year guidance and dividend. It is moving into the credit card space which should start to take effect in 2025/2026. There is lots of growth and it is one of the best financial stocks in Canada along with Propel.        Buy 8  Hold 2  Sell 0

Suffers headline risk, because it's a subprime lender, but are very well-managed. He holds a large position. They keep raising the dividend and are managing credit losses. The stock can double in 3-4 years as you collect the dividend. It will sell off on bead headlines though.

Might be technically a bit of a head and shoulders patterns, but still more to go. Solid last quarter, EPS beat by 10%. For stock to work, need no recession, and there's 70-80% chance of no recession at this point. 8x, 16% growth rate.

A non-traditional (aka: high-interest, high default rate) lender. He owns it, because both earnings and price momentum have been in his favour. Has had a considerable bounce. 

For a stock like this, don't buy your position all at once. Buy 1/3 of your position. Then, in 2 weeks or a month, buy another 1/3. If it goes down and you still like it, makes buying that second 1/3 very easy. Very hard to pick the bottom, or the top.

It is the biggest position in his fund and his personal holdings. It is positioned extremely well along with a consistent ROE of over 20% over the past 10 years. It grows its earnings well and is the top performing financial stock in the past 10 years. It has met or exceeded its targets every time and is innovative with new markets and products. It could be introducing a credit card product this year. Its lending business is non-prime and it has 400 locations as well as a point-of-sale business.

Still not expensive at 8x 2024, with 16% growth rate. Technically, had a big move, seeing a head and shoulders pattern. Solid last quarter, record earnings, stable credit. Earnings up 30% YOY. Well positioned to navigate rising rates. Key concern is can it hold these levels in a recession? Better view is yes. A name to own on a pullback.

A top compounder since 2012 when they became a non-prime lender. They continued to raise their dividend. They're moving into car loans, which is underserved in Canada. In recent years have done a great job reducing their debt. Trades at a low PE. The only caveat is a recession. Howeer, 41% of their loans are secured by assets.

It looks cheap, but GSY is a non-prime lender that's unsecured at very high interest rates. He's not saying their business isn't good, but if we're headed into a recession, he'd be worried about GSY. They recently had to refinance a bond that was much higher than the maturing rate, so he wonders what their cost of capital will be.

Likes business. Seeing $150 price target. Good loan growth. Record levels of new customers. Current share price very cheap at 9x earnings. Regulatory uncertainty a concern, but not too much. Would recommend investing. 

We are still positive on the company. GSY has adapted well to new regulations, and as one of the largest in the sector its smaller competitors are having a harder adjustment to interest rate caps. Growth may slow in a higher interest rate, recessionary environment, but we think the very low valuation already reflects a lot of this risk. We think it will be higher in a couple of years, perhaps significantly if rates fall and/or there is no recession.
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