Nicholas Financial: Difficult Credit Environment Has Been Hard On NICK

Nicholas Financial (NICK) is got slammed in Tuesday’s trading. The company just reported a profit of 25 cents a share compared with 27 cents last year. Digging down into the decimals, that’s a decline of 6.5%.

Not surprisingly, the difficult credit environment has been hard on NICK. The company’s provision for credit losses grew by 90% over last year. Still, we’re talking about a portfolio that has a pre-tax yield of nearly 9%.

The shares were down 4.3% yesterday, and they’re off more than 33% for the year. I won’t even hazard a guess as to what NICK will make for next year but I don’t see much more risk here. The shares are currently going for about seven times trailing earnings.