Q: Sold GSY at 85 this morning. What do you think about PRL at 19? is this an industry problem as well as a GSY specific issue in your view?
5i Research Answer:
Higher charge-offs has been cited across the indsutry. GSY's issues are related to this but they also obvisouly got over their skis in certain areas, so while it is industry related, it is also exacerbated by other decisions they had made in the business. PRL has reported their earnings recently and while they were seeing elevated charge offs it appeared more as though that they were emerging through it in the foreseeable future, so it doesn't look like they are seeing the issues to the same degree as GSY. Regardless, markets will be on high alert with these names and they are likely to remain correlated to one another in the near future. Thus, we would wait.