Asta Funding Q2 2012 results

Asta Funding (ASFI) announced financial results for the second quarter of fiscal 2012 today. The company disappointed in the previous quarters because of the lack of share repurchases after it announced a $20 million discretionary buyback program in the summer of 2011. It switched to a non-discretionary stock repurchase plan on March 9 and it seems that this move has had the intended effect since the company managed to repurchase 116,438 shares at a cost of $923,000 in just three weeks (the quarter ended March 31). Hopefully the pace of the buybacks has remained the same this quarter.

Asta Funding remains very cheap, and hopefully stays that way in the foreseeable future since this would increase the value of the share buybacks for remaining shareholders. The company has $116.4M in cash and securities which is close to it’s current market cap of $132 million. At the same time the company remains profitable, and cash flows from fully amortized portfolios (remember these assets have zero book value!) was $9.25M this quarter, actually up a bit from $9.05M previous year.

One big development of ASFI is the move in personal injury financing. It’s still way too early to tell how this is going to work out, but the company is starting to see the first revenue from this business. This quarter approximately $492,000 of income came from the Pegasus Funding joint venture, and so far the company has invested $8.3M in this business the past six months.

Disclosure

Author is long ASFI

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