Category Archives: ADS

QUICK BLURBS [ADS, AXP, BAC, IBKR, KMX, SVU]

(4,146 words) [IBKR] Partly due to an exceptionally low volatility trading environment, which has made it difficult to earn profits and which Petterfy says may continue “indefinitely,” the company is winding down its options market making operations. While the company will use the excess capital from market making to further support its brokerage operations, the latter […]
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[ADS] FORM VS. FUNCTION

In form, ADS is a bank.  In function, it is a loyalty company that helps retailers drive customer engagement and top-line growth.  The Citron short report from Aug. 2016 fails to recognize this distinction, essentially arguing that because ADS’ private label business literally makes money like a bank, it should trade like one.  But it […]
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ADS – LOW QUALITY BEAT AND RAISE, CREDIT SALES SLOWING BUT TENDER SHARE GROWING, REDEMPTIONS RAISE QUESTIONS ON BREAKAGE ASSUMPTIONS

10/20/2016: ADS (Earnings Call) Card Services (revenue +26% y/y, adj. EBITDA +14%) did better than expected: gross yields of 26.8% 60bps better than guidance and “cardholder friendly” changes made in mid-2015 lapping; operating leverage; loss rate of 4.7% 20bps better than expected, but co. thinks this is a timing issue and expects to give back […]
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ADS SEES NO ROADBLOCKS TO DD EARNINGS GROWTH, 20% LOAN GROWTH DOES NOT PRESENT CREDIT RISK

(798 words) 9/13/2016: ADS (Deutsche Bank Technology Conference) [The company seemed to assume a defensive posture, justifying the component of its business model, perhaps in response to this short idea published by Citron in late August]. ADS claims that private label cards are not a riskier credit proposition than general purpose.  During normal times, while […]
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