LAFDI market report - LAFDI remains under a cloud

By Rupert Taylor on Friday 26 February 2016

Alternative Lending

Whilst having been more volatile, at least recent moves in the LAFDI have had the same sign as wider markets. Not this week – as wider markets continued to recover the LAFDI registered another down month.    

 

Weekly return

LAFDI

-0.45%

MSCI World

0.74%

Top 5 performing Stocks in last week

1

TREE US Equity

32.17%

2

NSM US Equity

13.56%

3

TUNG LN Equity

7.31%

4

TAXI US Equity

6.07%

5

RM US Equity

4.36%

Worst 5 performing Stocks in last week

1

EPO LN Equity

-31.12%

2

ONDK US Equity

-22.56%

3

IPF LN Equity

-13.79%

4

MONI LN Equity

-7.12%

5

QIWI US Equity

-6.38%

 

* Returns are calculated for the week to local market close on Thursday.

Most of the action was on the downside.  UK based international payments processor Earthport PLC warned of a possible loss at a wholly-owed subsidiary company.  Baydonhill has been hit by a potential fraud involving a client making £5m worth of transfers before subsequently filing for administration. In a statement, the company said: "While the potential financial impact of this incident is material, Earthport possesses sufficient capital (£24 million of cash as of 31 December 2015, per Earthport’s Interim Trading Update) to continue pursuing its growth strategy while maintaining a substantial capital buffer."

The online lending space suffered this week as On Deck Capital reported figures that were poorly received.  Whilst quarterly earnings showed profits in line and revenues ahead the market was disappointed by reduced full year revenue guidance.  2016 revenue is now forecast to be $324 million at the mid-point of new guidance which  falls some way short of the average $340 million estimate.  LendingClub Corporation shares suffered from apparent read-across falling just shy of 3% over the period even after a strong performance in recent weeks sparked by their own strong results.  It is worth noting that there was a little reported positive this week as WebBank have agreed to accept a changed priced from LendingClub ensuring that they are remunerated alongside LendingClub, who earn fees across the lifetime of a loan.  This alignment of interest makes sense and may also improve their LendingClub’s standing in the ongoing Madden v Midland backlash. 

At the other end of the spectrum LendingTree delivered excellent numbers which may herald a return to form for a stock that used to be a sector darling.  The company reported better than expected Q4 numbers and also raised 2016 guidance.  Full-year revenue guidance is boosted to $370M-$380M from $315M-$320M and adjusted EBITDA to $62M-$65M from $50M-$52M.

Please note – The LAFDI is now available on Bloomberg.  Tickers:

LAFDITR GO for the Total Return Index

LAFDIPR GO for the Price Return Index

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