Thursday, 2 June 2011

Third Analyst Agrees Carfinco Is A Buy/Carfinco In The Globe And Mail Today

Carfinco Income Fund TSX:CFN.UN
Units Outstanding: 23.97 million
Units fully diluted: 24.6 million

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Stonecap Securities has recently initiated coverage on Carfinco and in its inaugural report has given the Fund a target price of $8.00 and its top rating of Outperform.

Dylan Steuart, Stonecap's Financial Services Analyst wrote his Initiating Coverage report on Carfinco titled Accelerating Towards Greater Share Of Used Auto Market dated May 5th.

Mr. Steuart estimates Carfinco's 2011 revenue to be $42.2 million, up from 2010's $35.3 million with $0.60 EPU (earnings per unit). The $8.00 target price is derived from applying a 13 times multiple to the 2011 EPU estimate of $0.60.

The recommendation of Carfinco is based on the following highlights from the report:
  • Carfinco stands alone in its target market.
  • Expansion opportunities exist in Quebec and up the credit spectrum.
  • Measures to improve credit metrics of portfolio have shown positive results
  • Chances of acquisition appear low, but standalone operation still has upside.
Read the full report by clicking here...

Analyst Fred Westra from Industrial Alliance was ranked by StarMine this year as one of Canada's top stock pickers. Mr. Westra has been following Carfinco since The Howard Group made an initial introduction to the Fund on a trip to Montreal in November 2009, coverage started shortly after and has continued since February 2010.

Today, The Globe And Mail published an article under the Globe Investor/Number Cruncher section written by Sonali Verma who interviewed Mr. Westra titled Carfinco: Nothing flashy, but plenty of zip. An excerpt from the article states, his top pick is Carfinco Income Fund, which provides loans to people with poor or non-existent credit ratings to buy used vehicles. It sounds like a dangerous business, but Mr. Westra is impressed by Carfinco’s risk-management process.

Read today's Globe And Mail article here...