ADS reports Q4'08 results | ADS Message Board Posts


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Msg  3 of 4  at  2/3/2009 8:51:54 PM  by

jm1750


ADS reports Q4'08 results

This board is dead.

ADS reports numbers tonight and confirmed 2009 EPS of $3.15-$3.20 and revenues of $2.1Bn.

I think this stock is trading substantially less than intrinsic value. The fear seems to be on the private label credit side of the business, but mgmt's reiteration of 2009 guidance is reassuring. Unlike AXP, ADS mgmt seems to be more prudent in credit risks and not growing the business by moving down the credit worthiness scale when accepting applications.

ADS has a monopoly in its AirMiles business and has a strong unique offering in the Epsilon and Private label business - the latter having nearly no customer churn. With continued consistent growth and operating leverage, ADS should experince 10% topline and 12-14% cash EPS growth for the next 5 years. Irrational fear is making it trade at only 7.8x 2009 cash EPS.

While this stock may be lackluster as long as there is concern regarding the consumer and credit, the stock is worth at least $66/share IMHO vs. the current price under $40.


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