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Thursday, July 31, 2008

Conforce International (CFRI) says nothing

Conforce International (combined links) took time out of their busy day to say pretty much nothing. But to give them credit, they did provide a date by when they will tell us whatever they know by that time, likely nothing again I suspect. But at least they haven't skipped town.

This press release today says nothing about the military Letter of Intent with a supplier to the US Military.
According to the company's US Military contractor, the awarding of the contract has been delayed pending administrative clarifications.... In the event that the agreement has not been executed by August 19, 2008, the Company will provide shareholders and interested parties with an update as to the status of the negotiations.
You may now return to whatever you were doing.
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Nicholas Financial (NICK) Q1 Results

Nicholas Financial (NICK, sec) issued a press release with results for Q1 today.

Period ending June 30, 2008
Once again, I'm going to compare it to the previous quarter, Q4.

Revenue increased 3%.
Operating expenses increased 7%
Provision for credit losses was increased to $3.4 million from $2.5 million.
Taxes dropped to $0.9 million from $1.3 million
Net income dropped to 15 cents per diluted share from 20 cents per diluted share.
Share count increased about 1%.

The balance sheet is fairly similar.

Weighted ave contract rate decreased slightly to 24.28% from 24.50%
Provision for credit losses was 6.76% of ave finance receivables vs 5.20% (net of unearned interest)
Net portfolio yield was 16.25% vs 17.83%

Most of the categories increased somewhat, both in absolute terms and in percentages of receivables.
With $203 million ave finance receivables on the books:

30 to 59 day delinquencies increased by $319K
60 to 89 day delinquencies increased by $936K
90+ day delinquencies increased by $275K
Total as a percentage of receivables is now 3.86%.

Direct Loans
30 to 59 day delinquencies decreased by $58K
60 to 89 day delinquencies increased by about $10K
90+ day delinquencies decreased by about $14K
Total as a percentage of receivables is now 2.47%

This quarter vs last quarter:
Purchases: $33 million vs $35 million
Weighted ave APR: 24.19% vs 24.47%
Ave discount: 8.87% vs 8.66%
Ave term (months): 49 vs 48
3,488 contracts vs 3,813 contracts


Overall, I'm quite happy with these results. I continue to own the stock.

Tuesday, July 29, 2008

Strathmore Minerals pummelled

Since Friday, Strathmore Minerals (STM.V, STHJF) has dropped from around C$1.30 to C$0.92. There's no news. Other uranium juniors have done far better. The Strathmore spinoff company, Fission Energy (FIS.V, FSSIF) jumped from around C$0.65 to around C$0.80 on heavy volume on Friday and then fell down to C$0.61 today. Friday afternoon, Tuesday morning, and Tuesday afternoon a lot of shares were dumped. I have no idea why. These things happen.

The spot price of uranium has been slowly climbing these past weeks. Things are looking good for Strathmore, Fission Energy, and the uranium mining industry in general. It's tempting to think this is a reaction to the sale of the Chord property at a low price, but that was 3 weeks ago. And it's worth pointing out that, not being an operations company, Strathmore will always end up giving up about half its interests in each property in joint ventures, so the price was better than it appeared.

I also looked back over the July 21 press release and nothing in it is surprising. Maybe it's the troubles of Yellowcake Mining, one of the joint venture companies. Cash is evaporating all over the financial world nowadays. I'm glad that the Roca Honda joint venture is with the large company Sumitomo (住友).

If you own the stock and you'd like to hear some details, the Strathmore website still has the May 2008 presentation. It's definitely worth listening to (about 20 minutes).

I continue to hold the stock (and Fission Energy as well).

Also, it seems likely that NICK will announce their results on Thursday.

Thursday, July 17, 2008


Yes, I'm still here and still watching things fairly closely.


I've been buying NICK with spare money that I stumble into. They should be releasing the next quarter's results on July 28. I'm hoping that the trend continues and the amount of bad loans continues to shrink, but that might not be the case. I'm buying it for what I believe will happen after the sub-prime smoke clears.

I looked at the details of Wells Fargo's (WFC) latest results, especially to look for how much things continue to deteriorate. Things don't look very bad for them, even when you take into account their changes to categories of non-performing loans. From what I've read, they've steered clear of a lot of the garbage going on.
Year-to-date total net interest income, for example, was up $1.8 billion from the first half of 2007, roughly equal to the increase in net charge-offs for the same period, even after adjusting charge-offs for the impact of our National Home Equity Groups new charge-off policy. Few other large financial institutions have had the capacity to realize the opportunities generated by the credit crisis, and if opportunities to add attractive assets, add new customers and gain market share and wallet share continue, the long-term benefits could very well last beyond the peak in credit costs.
This is the sort of thing I hope to see from NICK, but I doubt it. I took a quick look at CACC and ACF and both seem to be weathering things well [so far], although I didn't look too closely at the details.

For years I've been saying that NICK won't reach full value until after the whole sub-prime issue hits and passes over.

Strathmore Minerals and Uranium

The interesting thing about Strathmore and uranium in general is how things are playing out pretty much as expected, yet with the changes in stock prices and uranium prices, it can be difficult to see that. The long term price of uranium dropped somewhat, which was worth noting, but what I worry about is some big change to the fundamentals of uranium being a good long-term investment: Strathmore Minerals in particular. I see nothing different than what I saw when I first started buying Strathmore 3 years ago. Demand is going up, supply is not matching it, there are issues limiting supply. The US quietly moved a million pounds of yellowcake out of Iraq and gave/sold it to Cameco, but India is severely running out of uranium (they need millions of pounds). If they strike a deal with someone and are able to buy all that uranium, it's likely to impact the near-term balance of supply and demand.

What I didn't like from Strathmore was them selling their Chord property for what seems like a cheap price. The property had about 2 pounds per ton of uranium in what seems like a farily decent depth and surroundings. It sold for a little over a dollar a pound in the ground. Based on Strathmore's financials, they didn't seem to need the cash. Also there was the issue of terminating the agreements with Yellowcake Mining on the Sky, Jeep, Conoco Files projects. They're still doing Juniper Ridge.

Fission Energy is still working on the drilling near Hathor's "roughrider" zone. Hathor found some more uranium at what seems like serious concentrations, but don't yet know exactly how much.


No news from CFRI. When something happens, they'll definitely trumpet it. How long success for them takes is far less important to me than whether things are successful. I follow the World Cargo News headlines looking for anything that might change the picture. Everything looks fine so far in terms of not seeing anything unexpected that might ruin the CFRI's success.

CVU has been quietly winning business. However, they had a revision to the big Spirit AeroSystems MOU (they're doing the leading edges, not trailing edges) which doesn't impact the short term, but probably cuts down on the long term. CVU won't go anywhere until/unless they get a huge jump in orders based on planes coming back from the Middle East and a clear indication of a sustained increase in business. Iraq may start winding down soon, although there's likely to be some increase in activity in Afghanistan.


I spent some time looking through the FDIC database to see the financial state of banks overall and in key places like Florida. Local banks in Florida are doing badly. If I recall, only 40% of the are currently profitable. As a whole, they're making essentially no money right now and there's a lot of non-performing loans. Overall in the US, however, the banking system seems to be doing reasonably well, especially considering all the negative hype.

The fact that Berkshire Hathaway's price has gone down rather than up, tells me that the market is just depressed. In my opinion, the value of Berkshire increases as the overall stock market deteriorates due to having more opportunities for Buffett to find something good. The guy is seriously at the peak of his investing ability right now.

I'm happy with all my investments.

UPDATE next day:
Unlike Wells Fargo, CitiGroup is a whole 'nother story, with a big loss rather than merely lower profits. Their customers are obviously very different from NICK, but this caught my eye:
Results improved substantially versus first quarter 2008 due to lower write-downs and good performance in the core franchise.
Interesting, the surprises continue to be good ones.

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