World Acceptance Corp. (NASDAQ:WRLD)

CAPS Rating: 1 out of 5

The Company is engaged in the small-loan consumer finance business, offering short-term small loans, medium-term larger loans, related credit insurance and ancillary products and services to individuals.

Recs

1
Player Avatar PavewayIII (< 20) Submitted: 1/7/2010 11:04:56 AM : Outperform Start Price: $36.64 WRLD Score: +5.26

In again 7 Jan on slight pullback for expected continuing crawl up

I *want* to hate this stock... I really do. Saw the old Citron article again arguing for a short, but also read Larry Meyers (SeekingAlpha) Sept. blog sort of rebutting that. I just don't see any kind of refi treadmill or delinquencies buried in WRLD's numbers. I don't see any legislation affecting their business - Citron cited usary laws, but WRLD's CILs are a bit different.

Charge-offs are high relative to other consumer credit types, but in line with WRLD's historical rates. They manage this very closely and have had little issue over the last year or two with economic downturn or unemployment. Their loans are short-term and unsecured. They have little reason to refi a delinquent one over and over - their normal business model considers steep charge-off rates as 'normal'. They remain profitable.

These guys have loan-sharking down to a science: they are expanding in Mexico and making money at it!

I'm plugging my nose and wading in. I just hope I never have to *use* their services! Mid 40's for this would bring it up to CIL peers P/E. Have to see what the first two quarters of 2010 look like if it climbs that high by the summer.

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