Second Curve Capital Increases Stakes in Consumer Portfolio Services Inc (CPSS)

Tom Brown’s Second Curve Capital declared having increased its exposure to Consumer Portfolio Services, Inc. (NASDAQ:CPSS), a $170 million market cap company engaged in purchasing and servicing retail automobile contracts originated by franchised automobile dealers and, by independent dealers in the United States in the sale of new and used automobiles. According to a new 13G filing, Second Curve Capital owns around 1.22 million shares of the company’s Common Stock, worth more than $8.6 million. This implies a 51% increase in the fund´s position, in relation to the one it had declared in its last 13F filing. Following this upsurge, Brown’s fund owns 5% of Consumer Portfolio Services´ outstanding shares.

Thomas Brown

This stock has experienced a marked decline this year. So far, it has fallen almost 25%, and now trades at only 10 times the company’s trailing earnings, compared to an industry average of 17. This has opened an attractive entry point for long-term investors. In fact, despite the cheap valuation and below-average margins, long-term prospects look encouraging: analysts expect Consumer Portfolio Services, Inc. (NASDAQ:CPSS) to deliver an average annual EPS growth rate of around 20% over the next five years, widely outperforming its peers. In addition, a return on equity of 26.9% (compared to an industry average of 17.7x) makes of this stock an even more alluring investment option.

In addition to Second Curve, other major funds are betting on this company. Michael Novogratz’s Fortress Investment Group owns 983,939 shares, and Israel Englander’s Millennium Management, 741,170 shares, both as of the end of 2013

Second Curve Capital’s equity portfolio reaches a valued of more than $480 million and mainly focuses on the financial sector (and capital goods). Since inception, in the year 2000, it has managed to net a 20% average annual return, net of fees, compared to just over 4% for the S&P’s financials index. Its largest bets are placed on Bank of America Corp (NYSE:BAC), of which it holds 8.86 million shares, and on NewStar Financial Inc (NASDAQ:NEWS), of which it owns 4.94 million shares.

Disclosure: Javier Hasse holds no position in any stocks mentioned

Recommended Reading:

Tom Brown’s Second Curve Capital Raises Exposure to First Acceptance Corporation (FAC); Discloses 5% Stake

Tom Brown’s Second Curve Capital Raises Its Stake in Meta Financial Group Inc. (CASH)

Second Curve Capital Top Picks Include NewStar Financial Inc (NEWS), Bank of America Corp (BAC) & Others

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top 6 Tax Scams and How to Protect Yourself

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!