International Personal Finance: Why is the price rising so fast?

8th Jun by wilkonz

13 comments 426 reads

I've been following International Personal Finance (LON:IPF) for a month and had a couple of trades on it - one a winner and one a loser. Currently I've got a small spread bet on it. My reason for investing is that it looked somewhat undervalued with a PE ratio of 1.5. Two weeks ago the price was 35 pence, this morning it has gone over 70 pence. A week ago the volume went up tenfold with a sudden surge of buying. There seems to be some strong interest in this share but I have no idea why. Does anyone know what's going on with International Personal Finance (LON:IPF)?

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About the Author

Wilkonz

Premium Member

Retail investor.

13 comments

willhampson

8th Jun

Hi wilkonz, I don't have a precise answer but like many of the sub-prime lenders (I know its more nuanced than that, but just using for short hand) it had sold off very substantially in March/April on fears of write-downs on loan book etc. I suspect some are now perceiving the risk to the down-side may not be so bad (or at least as bad as feared). I don't have a position in International Personal Finance (LON:IPF), but one thing to be aware of is it is being ramped "to the moon" on twitter so I think that has a fair bit to do with the recent strength, plus of course the director buys. I have a medium holding in Non-standard Finance (LON:NSF) so watch with interest. All the best. Will.

wilkonz

8th Jun

Ah! Twitter!! Thanks Will. That's very helpful. I was wondering if there might be an element of 'pump and dump' happening here. Clearly it's at high risk of a rapid reversal, but I think a fair value would be around 140 pence giving a PE of around 4.5. All the same I'm keeping my stop loss close to the current price. We shall see. Good luck with £NSF. Best wishes, William

UK_Investor_8888

8th Jun

I have £160K in International Personal Finance (LON:IPF) with a break even of 73.44p, having substantially averaged down my 160p holdings by filling my boots in the 40p range.

Beware that there is a 1.1% Short position building.

https://shorttracker.co.uk/company/GB00B1YKG049/

If the Shorter gets nervous they will need to reverse their Short quickly and rapidly buy more stock to cover their losses, elevating the price.

IPF will/would be severely impacted if the economy goes into Armageddon, with debtors defaulting wiping out their balance sheet.

Also, in less developed countries, their business model is "door to door" lending. The Lockdown panic and over-reaction will have severely impacted the way their "agents" (sales staff) operate.

The easing of the lockdown and prospect of an economic recovery, should help IPF head back to the 180p and beyond that it was heading for before the flu pantomime got in the way.

There is much hard work for IPF to do in managing the reconstruction of the business, but they have a track record of expertise at doing this and managing recessions.

wilkonz

8th Jun

Hi UK Investor 8888. I was hoping you'd have some thoughts on this as you mentioned your investment recently on the Plus500 (LON:PLUS) thread. First of all I'm delighted you've broken even (as I write the price is 74.12). As for the shorters they might be doing us a favour because at the moment they need to close their positions fast - unless they have nerves of steel. I'm gradually increasing my position, but with a tight stop loss.

UK_Investor_8888

8th Jun

Plus500 (LON:PLUS) has had a bad day (past two weeks). Whilst PLUS500 has "record" volumes and new clients.... they have done a sort of profits warning today saying that the Clients (hurrah for them) have been winning more than normally expected, and this has dampened the expectation of exceptional profits.

The last 2 weeks have hurt me very badly!

wilkonz

8th Jun

Yes, I'm down on Plus500 (LON:PLUS) but probably somewhat less than you. I think the reason for the punters doing well is that the market is going up remorselessly and they're winning their bets. But there's bound to be a correction soon and the number of losing bets will increase. It's all swings and roundabouts. All they need to do for now is to widen the spreads a bit to discourage the smarter punters and they'll be in profit again. I've no doubt they've worked that one out for themselves.

Momoko Miyamoto

8th Jun

Consumer finance companies catering to the poor credit end of the market e.g. Morses Club (LON:MCL) Provident Financial (LON:PFG) are likely to suffer in a prolonged recession, as their clients were already struggling and usually do worse in a downturn. Coupled with social distancing and it's not surprising these doorstep lenders have taken a battering. However I think alternative consumer credit interesting as an investment and have chosen H & T (LON:HAT) to play it. Pawn loans have less default risk and high gold prices also benefit the company. By far the largest pawnbroker with 250 shops and strong brand. They also trade new/used jewellery, sell foreign currency, offer unsecured loans and have an online retail outlet.

UK_Investor_8888

9th Jun

Massive drop in International Personal Finance (LON:IPF) this morning, costing myself a considerable sum.

I have decided I am holding... focusing on the long term value, not short term trader gaming.

The Market is behaving like a casino at the moment.

wilkonz

9th Jun

Yes. Exactly. A casino. I sold at 67. It's a crazy stock so I took a small profit and ran. But I'll probably go back in when the dust settles and either buy at 50 when it's too cheap to ignore, or 80 when the uptrend is confirmed. I'm still looking at a 140 target but I get the jitters when the price pings around like a pinball. Well done for holding your nerve.

UK_Investor_8888

9th Jun

I have sold my small Share Trading position but kept my two other account positions long.

I have a bad feeling we're going to have a red week...

wilkonz

9th Jun

We're probably going to have an awful week! But I've just bought a small amount of International Personal Finance (LON:IPF) at 64 just before the closing bell. I'm encouraged that trading volumes were small after 10 am and there was very little price movement. It looks like everyone's sitting on their hands waiting for the next big move and it's at least 50:50 that it will be upwards.

UK_Investor_8888

9th Jun

Weird chart, wasn't it.

There's that Short Seller notice that I can't understand:

https://www.stockopedia.com/share-prices/international-personal-finance-LON:IPF/news/intnl-personal-fin-holdings-in-company-urn:newsml:reuters.com:20200609:nRSI4117Pa/

That existing Short Position

https://shorttracker.co.uk/company/GB00B1YKG049/

I decided to reduce temporarily having seen what The US is doing but I still have £150K invested in IPF.

A little bit of profit now sitting in cash in case it falls... 2 days down from its high of 77p to 62.5p... day 3 will _______ .

wilkonz

9th Jun

I'm afraid I don't understand any of it, so I'm treating it as noise. My plan is to have a small stake, and sell quickly if it goes down and buy more if it goes up. My stop loss is set at 57. I'd love to know what's really going on behind the scenes. Probably not a good time for International Personal Finance (LON:IPF) to have a load of unsecured loans on their books, but that seems to have been priced in more than adequately on the calculation that around 75% of their clients will default. My guess is it won't be anything like that bad. Nous verrons.

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International Personal Finance: Why is the price rising so fast?

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Wilkonz

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