[DesertCat]

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In addition, this is bad at least at first glance...it means the comps are worse than they look- it was 5% of operating earnings in the Q...


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These are all reasons why NICK is on sale. It's also a concern that they've had increased chargeoffs/writeoffs in a period where unemployment hasn't risen.

Why am I not concerned? Because they've been through it before. These delinquency rates flunctuate, and last year they were the lowest in the history of NICK. So the comps were unrealistic, and it's not surprising they'd increase this year. But if you think this is a trend that will continue, it's silly to buy now as you'll likely get a better price following more bad news.

I'm fully invested here, so I don't think much about timing the best purchase price based on a bad quarter or two. My bigger concern is, has something bad happened to their business model that damages the intrinsic value of the investment?

So far, I don't think so. They've been through much worse competitive environments and still grown their business through it. I'm trusting management to be very conservative, to not get overly leveraged and not chase bad business (even if it costs growth), which is what they've done in their history. Note how often this management team has over-reserved for potential losses, and how often those reserves end up being reversed into earnings.