NICK  Nicholas Financial Inc.

Exchange

NASDAQ

Sector

Finance

Industry

Finance Companies

Market Cap.

67.83M

Vuru Grade

63.39/100

Current Price

$8.67
+0.02 (+0.23%)

Growth Price

$38.99
Undervalued by 349.68%

Stability Price

$12.68
Undervalued by 46.19%

Company Metrics

  • P/E 20.64
  • P/S 1.67
  • P/B 0.62
  • EPS 0.42
  • Cash ROIC 8.08%
  • Cash Ratio -
  • Dividend 0 / 0%
  • Avg. Vol. 9,709.00
  • Shares 7.82M
  • Market Cap. 67.83M

Company Description

Nicholas Financial, Inc., through its subsidiaries, operates as a specialized consumer finance company. The company engages in acquiring and servicing contracts for purchases of new and used automobiles and light trucks. It also makes direct loans and sells consumer-finance related products. In addition, the company engages in developing, marketing, supporting, and updating industry-specific compu... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Nicholas Financial: A Short Idea For August
Seeking Alpha - Aug 8, 2017
Nicholas Financial Inc. (NICK) is a Clearwater, FL based auto finance company that operates in seventeen states and whose primary source of business is buying auto loans from dealers (essentially they're an auto-loan collection company).
Nicholas Financial Announces Retirement of CEO, effective September 30, 2017
GlobeNewswire (press release) - Jun 12, 2017
CLEARWATER, Fla., June 12, 2017 (GLOBE NEWSWIRE) -- Nicholas Financial, Inc. (NASDAQ:NICK) announced the retirement of Ralph T. Finkenbrink as its President and Chief Executive Officer for personal reasons effective as of September 30, 2017.
Nicholas Financial Reports 3rd Quarter Results
GlobeNewswire (press release) - Feb 2, 2017
CLEARWATER, Fla., Feb. 02, 2017 (GLOBE NEWSWIRE) -- Nicholas Financial, Inc. (NASDAQ:NICK) announced that for the three months ended December 31, 2016, diluted earnings per share decreased 40% to $0.21 as compared to $0.35 for the three ...
Nicholas Financial Reports 4th Quarter Results
GlobeNewswire (press release) - May 17, 2017
CLEARWATER, Fla., May 17, 2017 (GLOBE NEWSWIRE) -- Nicholas Financial, Inc. (NASDAQ:NICK) announced that for the three months ended March 31, 2017, diluted earnings per share decreased 140.0% to a net (loss) of $(0.14) as compared to a net ...
Nicholas Financial CEO Announces Retirement
Auto Finance News (blog) - Jun 13, 2017
Ralph T. Finkenbrink, 55, will retire from Nicholas Financial Inc. as its president and chief executive on September 30, 2017, the company announced Monday.
Nicholas Financial, Inc. (NASDAQ:NICK) Sees Unusual Trading Volume in Its Shares
First News 24 - Sep 22, 2017
1,427 shares changed hands by the end of trading on Thursday. Shares saw a steep decrease in trading volume of 91.07% under the normal average daily volume.
Somewhat Favorable News Coverage Somewhat Unlikely to Impact Nicholas ... - StockNewsTimes
Magnolia Group LLC Boosts Stake in Nicholas Financial, Inc. (NICK)
StockNewsTimes - Sep 20, 2017
Nicholas Financial logo Magnolia Group LLC lifted its position in shares of Nicholas Financial, Inc. (NASDAQ:NICK) by 7.0% in the 2nd quarter, according to its most recent 13F filing with the SEC.
Nicholas Financial, Inc. (NASDAQ:NICK) Sees Light Trading Volume with 3855 ...
Highlight Press - Sep 12, 2017
Trading was light with 3,855 shares changing hands on Wednesday. Overall, volume was down 75.88% under the stocks normal daily volume.
Nicholas Financial, Inc. (NASDAQ:NICK) Trading Volume Significantly Lower
First News 24 - Sep 13, 2017
Trading was light with 3,855 shares changing hands in the last trading session. Overall, volume was down 75.88% under the stocks normal daily volume.
Nicholas Financial, Inc. (NASDAQ:NICK) Experiences Light Trading Volume
First News 24 - Sep 5, 2017
Nicholas Financial, Inc. shares had a trading volume of 3,569 on Tuesday. Volume was down 77.67% under the stocks average daily volume.
The Nicholas Financial (NICK) Getting Somewhat Favorable Media Coverage ... - BangaloreWeekly
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for NICK to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate NICK's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$8.67 Current Price

$38.99 Growth Price (DCF)

Undervalued by 349.68%


Growth Rate Assumed by Market: -500.00%


Future Free Cash Flow Growth Rate: 3.5%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$12.68 Stability Price (EPV)

Undervalued by 46.19%


Discount Rate: 15.0%

$15.60 Book Price

Undervalued by 79.94%


Poor Cash Return on Invested Capital over the past 5 years

NICK has been unable to consistently generate sufficient returns from its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

NICK has only created $8.08 of cash for every $100 invested.
Figures in USD. Fiscal year ends in March
20132014201520162017
Free Cash Flow 25.35M 20.88M 25.32M 23.16M 26.55M
divided by
Invested Capital 263.84M 283.43M 302.53M 325.31M 333.61M
Cash ROIC 9.61% 7.37% 8.37% 7.12% 7.96%

Shrinking Return on Equity over the past 5 years

NICK has been shrinking returns with capital that shareholders have invested. This is a negative sign and demonstrates that both the business and management performance are weakening over time.

NICK has generated $12.65 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in March
20132014201520162017
Net Income 19.94M 16.70M 16.86M 12.38M 5.41M
divided by
Stockholders' Equity 126.97M 141.94M 89.89M 102.85M 108.86M
Return on Equity 15.71% 11.77% 18.75% 12.04% 4.97%

Excellent Business Performance over the past 10 years

NICK has been able to maintain profitability in good times and bad. This could mean NICK has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

NICK has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in March
2008200920102011201220132014201520162017
Free Cash Flow 16.67M 21.37M 21.12M 20.96M 21.55M 25.35M 20.88M 25.32M 23.16M 26.55M

Weak Balance Sheet

NICK's financial position is not ideal. The key is to check whether NICK is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in March
2008200920102011201220132014201520162017
Cash - - - - - - - - - -
Current Assets - - - - - - - - - -
Total Assets 189.84M 197.78M 214.14M 243.64M 257.24M 263.84M 283.43M 302.53M 325.31M 333.61M
Current Liabilities - - - - - - - - - -
Total Liabilities 111.26M 112.76M 116.70M 128.43M 121.30M 136.87M 141.49M 212.64M 222.46M 224.75M
Stockholder' Equity 78.58M 85.02M 97.44M 115.21M 135.94M 126.97M 141.94M 89.89M 102.85M 108.86M
Current Ratio - - - - - - - - - -
TL-to-TA 0.59 0.57 0.54 0.53 0.47 0.52 0.50 0.70 0.68 0.67

Consistent Reinvestment of Profits over the past 10 years

NICK has consistently retained profits. This may put NICK in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, NICK can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in March
2008200920102011201220132014201520162017
Retained Earnings 62.98M 67.70M 72.07M 88.88M 107.51M 96.93M 110.79M 127.64M 140.02M 145.43M
Retained Earnings Growth - 7.49% 6.46% 23.32% 20.97% -9.84% 14.29% 15.21% 9.70% 3.86%

Inconsistent Net Profit Margins over the past 10 years

NICK potentially has a competitive advantage, however inconsistent profit margins are a cause for concern. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$19.04 of every $100 of Revenue have been pure profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in March
2008200920102011201220132014201520162017
Net Income 9.67M 4.72M 10.86M 16.81M 22.23M 19.94M 16.70M 16.86M 12.38M 5.41M
divided by
Revenue 50.08M 53.10M 56.47M 62.77M 68.17M 82.11M 82.63M 86.79M 90.71M 90.47M
Net Profit Margin 19.31% 8.88% 19.24% 26.77% 32.61% 24.29% 20.21% 19.42% 13.65% 5.98%

Weak Pricing Power over the past 10 years

NICK is likely in a highly competitive industry, due to low barriers to entry. It's because of this, that NICK has been unable to raise prices and increase their profitability. This puts them in a poor position if inflation becomes an issue, as they would struggle to pass higher costs onto consumers.

Only $- of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in March
2008200920102011201220132014201520162017
Gross Profit - - - - - - - - - -
divided by
Revenue 50.08M 53.10M 56.47M 62.77M 68.17M 82.11M 82.63M 86.79M 90.71M 90.47M
Gross Margin - - - - - - - - - -

Low Capital Intensity over the past 10 years

NICK has consistently used a small portion of their Net Income buying new equipment or investing in new facilities. This indicates that NICK may require minimal investment to stay competitive. This leaves them with extra money to spend on growing their business and potentially buying back stock.

4.23% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in March
2008200920102011201220132014201520162017
Capital Expenditure 189,845.00 295,272.00 208,671.00 393,782.00 320,537.00 271,003.00 464,598.00 442,758.00 913,000.00 772,000.00
divided by
Net Income 9.67M 4.72M 10.86M 16.81M 22.23M 19.94M 16.70M 16.86M 12.38M 5.41M
Capital Expenditure Ratio 1.96% 6.26% 1.92% 2.34% 1.44% 1.36% 2.78% 2.63% 7.38% 14.27%

Inconsistent Dividend History over the past 10 years

NICK has started distributing dividends in the past couple years or has recently suspended their dividend distribution. The reliability of future distributions is unclear.
Figures in USD. Fiscal year ends in March
2008200920102011201220132014201520162017
Dividend Paid - - - - 3.59M 29.84M 2.85M - - -
divided by
Shares Outstanding 11.32M 11.44M 11.69M 11.89M 12.03M 12.22M 12.33M 12.19M 7.69M 7.73M
Dividend Paid Per Share - - - - 0.30 2.44 0.23 - - -
Price at Year End 2.14 6.72 9.96 12.82 11.88 15.74 14.89 11.77 11.89 9.59
Dividend Yield - - - - 2.51% 15.52% 1.55% - - -

History of Stock Buybacks over the past 10 years

NICK has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in March
2008200920102011201220132014201520162017
Shares Outstanding 11.32M 11.44M 11.69M 11.89M 12.03M 12.22M 12.33M 12.19M 7.69M 7.73M
Stock Bought Back - -1.06% -2.13% -1.72% -1.16% -1.52% -0.86% 1.09% 58.50% -0.44%
Share your thoughts about NICK

Sign Up or Log In to start contributing!


Discussion

Nothing here yet. Be the first to post!