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  • reddog3 2011-08-28 07:39
    Let us make clear the difference between FAS 157 Mark to Market GAAP (assumptions that NOVS quant team lead by Mike Bamburg now with Credentia Group LLC is forced to make are way overly conservative) and the reality of the billion dollar portfolio performance.

    Let's begin with the later the portfolio has not only paid off hundreds of millions in NFI liabilities ($100M to Wachovia, the old landlord $5m & RIF over 2,000 employees in a matter of months) but has reinvented shareholder equity into two huge markets; www.streetlinks.com (mandated as must have by Dodd Frank ACT and provides compliance with HVCC home value code of conducted mandated by FHA, FannieMae and FreddieMac the GSE which comprise over 90% of the mortgage market) and www.adventafs.com or www.adventtax.com which Provides best of breed solutions to REPLACE two billion dollar problems; RAL refund anticipated loans and the expanding NON BANKED also referred to as LMI lower to middle income consumer (that has special needs). The RAL market is in the billions (exactly how big ask Lance Anderson, CEO of AFS they know) IRS has eliminated critical tools used by these lenders and Bank regulators have forced Banks out of the RAL market. 2012 tax season upcoming will be the first these two trends will be in force. Who knows can AFS absorb 5% of the 61M electronic returns filed with IRS ? That would be 3M Settlement Products x 18.51 = 56M in gross revenue in 2012 from just the SP. The NON banked 60M use payday lenders as a solution for their financial needs and AFS www.mygetitcard.com solves these problems for much less. State regulators are pressuring PAYDAY lenders.
    GAAP forces NOVS to wipe out assets by requiring overly conservative assumptions that distort NFI balance sheet. One needs go no further then the 993M gain booked Q1 2010 to understand the cruel joke GAAP interpreted by Deloitte & Touche.
  • reddog3 2011-03-14 10:06
    My investment thesis on NOVS Novastar Fin'l owns 88% fo streetlinks.com and 70% of adventafs.com
    Posted by: reddog3 (IP Logged) [Ignore this user]
    Date: March 14, 2011 11:01AM

    I wanted to share an investment thesis or alternative to GDOT and NTSP (serving 70M Non-Banked Americans per Goldman Sachs sole underwriter)- two of the most successful IPO over last 10 months. Digital payment market is one of the fastest growing markets today.I wanted to share an investment thesis of mine on Novastar Financial aka symbol NOVS which has a more comprehensive solution to the 70M non banked in America. Yes this is the lower to middle income LMI consumer that has relied upon PAYDAY Loans and RAL both solutions are under regulator heat. They distribute via independent tax preparers. BTW the former #2 at IRS now COO of FISV ($9Billion mrkt cap) former CEO of HR Block owns 13% of Adventafs.com. Does anyone think he has a motive to help NOVS afs. IF AFS is worth what GDOT is ($2.3 Billion mrkt cap) Mark Ernst will be worth over $250M off this start up purchased years ago by NOVS for a mere $2Million. NOVS owns 70% of www.adventafs.com, AFS has a IRS private letter ruling which preserves a Deferred Tax Asset DTA ($677M as of last 10K) that will shield taxable income from AFS. This DTA is 100% written off under a GAAP loop hole called FAS 109. NOW for the frosting NOVS also owns www.streetlinks.com SL the best of breed Appraisal Mgt Co AMC mandated aka must use by DoddFrank FinReg and the HVCC stds adopted by FNM, FRE and FHA. My research indicates both of these markets are in the billions. See NOVS which is pending SEC approval on a capital restructuring as defined S-4/A recently filed. Other investors include; MassMutual, Babson Capital their sub and Jefferies. You can buy NOVS today for about 40 cents. My research suggests www.adventafs.com AFS has about 1m cards outstanding and issued and is growing virally. If this is true AFS should do about $35M a year in earnings. GDOT just announced 29 cents for the qtr beating est. This represents about $1.20 per EPS or PE of 45 with no DTA Market Cap of $2.3Billion. GDOT average balance (ab/card) with low churn is $800 per card, NTSP ab/cr is 1,200 probably because of more payroll then retail. AFS has ab/cr of about $3,000 let us say $2500 ab/cr GDOT common share float is 12m and 3m shr are shorted. GDOT has 42M CS shares outstanding, 1.20 x 42m is $50M in earnings and Mrkt Cap of $2.3B. They pay 35% tax rate so EBITDA is about $75M. $75M / 3.5M cards out at GDOT. Therefore 1m cards out at AFS so GDOT $15 profit per card and NTSP makes $30 profit per card. SO AFS $35 profit per card x 1m cards or $35M EBITDA. If 1m AFS customers deposit 3,000 average tax refund and leave just have the cash on the cards, AFS aka NOVS has a float like Warren Buffett and Prem Watsa of FFH P&C Holding co business. SL could did $20M gross revenue in 09 and for 2010 $85M gross revenue est (YOY growth of 4 x). Let us assume 2x growth YOY for 2011 which would be $170M in 2011 gross revenue x 30% margin target or 51M and Portfolio or legacy business model is generating $12m annual (1m per month per bond remittance reports) that is 35+12+51M = 98M - corporate SGA 9M= 89/ 90M common shrs outstanding is almost $1/shr EPS x 35 PE or 35 stock by end of 2011, You can buy it today for 40 cents.


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