Q: You said on an earlier post that you are surprised GoEasy went up 30% during the late market weakness. I came across a post on StockHouse. I don't know if this information is true but here it is:
"Citi is selling its CitiFinancial operations in Canada: 200 branches for a rumoured price of about $400 million. Teachers' is apparently interested. It is a similar business to GSY, although I think they offer mortages as well as consumer loans. Even so, the 200 locations / $400 MM translates to $2MM per location. GSY with about 180 locations and a market cap of 305MM is about 20% less ($1,680,000 per location). So, on that basis alone, GSY SP may rise toward the CitiFinancial valuation. On top of that, GSY has had a single digit P/E for years and still does even with the recent SP rise. If the market bestows even a modest multiple expansion to 10 or 11X, that would push the SP up as well. It is possible that GSY could hit $25 - $28 based on the CitiFinancial metric and over $30 with multiple expansion."
"Citi is selling its CitiFinancial operations in Canada: 200 branches for a rumoured price of about $400 million. Teachers' is apparently interested. It is a similar business to GSY, although I think they offer mortages as well as consumer loans. Even so, the 200 locations / $400 MM translates to $2MM per location. GSY with about 180 locations and a market cap of 305MM is about 20% less ($1,680,000 per location). So, on that basis alone, GSY SP may rise toward the CitiFinancial valuation. On top of that, GSY has had a single digit P/E for years and still does even with the recent SP rise. If the market bestows even a modest multiple expansion to 10 or 11X, that would push the SP up as well. It is possible that GSY could hit $25 - $28 based on the CitiFinancial metric and over $30 with multiple expansion."
