Advance America, Cash Advance Centers (AEA)

govt may look into price gouging because of military families in hock.

stock was slammed because of states where they operate with known problems. no issue in core business, growth will lean toward states with fewer regulatory hurdles. nice opportunity to take advantage of market volatility.

Advance America, Cash Advance Centers is a leading payday cash services in the U.S and in its latest avatar trying to champion meaningful reforms that will protect consumers access to its services as a valuable and trusted option.

The firm is currently operating in a difficult environment facing regulatory hurdles from federal and state government apart from the ongoing law suits. It had to terminate its agency model of doing business in certain states due to unfavorable legislations in 2006. A recent report by Federal Reserve Bank of New York stating payday advances provide consumers a critical choice for managing short-term financial challenges as opposed to a form of predatory lending comes as a solace in turbulent times.

On the new product-offering front, Cash Vantage card launched during the recent quarter was a huge success with approximately 5,000 registrations. It still remains a bright spot as it has improved customer retention, increased usage and thereby resulting in loyalty and increased portfolio profitability.

It has also embarked on a new marketing campaign that includes a multifaceted campaign addressing the target audiences like legislators and media. The objective is to educate and correct the misconceptions that it business being abusive towards the welfare of the consumer.

It has resorted to organic growth as the mode for expansion and seeks global footprint. The company is evaluating the feasibility of opening centers in Canada. Apart from this, it also sees huge potential in United Kingdom, which remains one of the key initiatives for 2007. Reorganization of business centers remains a priority for the day to day working of the firm. Reflecting the same it has opened 123 new ones, while closing 15 underperforming units taking the total to 2,853 locations. Plans of opening 300 new centers are in the pipeline. The firm has had a total restructuring and expectations of favorable legislations in the coming year make it a promising buy.

Virtually unlimited demand... so long as the regulators don't kill the industry.

AEA is currently trading very low and has a high dividend yield of about 6.7%. Bad news in the last year has pummeled this stock, assuming all the bad news is now out there is only upside potential here. I think the worse case scenario at this price is that the stock trades sideways and all you get is the good dividend.

If I wanted a short-term loan like these. I'd go to a loan shark. They just abuse stupid people.

The current economy is the perfect market for such a company. A 6.82% yield doesn't hurt either.

bargain stock set to rise

This line of business will only get more profitable in our current economy. There's a chance the earnings will drop when the economic stimulus checks come out, but overall they should increase throughout the year.

people don't save enough money in the U.S. and people love to spend it on stuff they don't really need. They will keep doing that until they can't get anymore new credit cards and paycheck loans are the next step. It will happen. Save more money please, until then, this stock is a keeper!

This was an underperform for a long time primarily due to stupid state governments who think their subprime citizens "deserve" money at interest rates deemed acceptable by said governments. But now, after the crash, the stock is just too darn cheap at $2.27. They are continuing to operate normally in many states, and I can't imagine that the government crackdown on lenders, even hated "paycheck" lenders, will continue after people saw just how bad a credit crisis can get. Meanwhile the business model itself thrives in a recession. People denied normal loans and credit cards in the new environment just won't have many options, and even subprime borrowers can be profitable with fees and triple digit interest rates.

a real winner

Very cheap at these prices, and should do well over the next few years. Credit is tight, and sometimes people need money quickly.

If this company can continue to improve with Government regulation, with the current economic times they will be around along time.

P/E at <4.

Po' folk sure aren't going to get a credit card these days.

AEA is cheap bottomed. The growth over the past couple years is good. People need cash advances. Expect at least a double. 20% dividend when it recovers.

It hurts for me as a fellow US citizen to choose this stock but the writing is all over the wall. High unemployment. You have to pay the piper some how.

economies and human nature

I'm in on my real money portfolio. Bought at 3.40 and it gained 30% in two days, sold and rebought when it came back down around the same price.
I work at a major bank and due to the negitive press surrounding banks people for whatever reason do not want to have anything to do with the banks. Add that to the fact that the average American ( from what I have seem) has more debt then cash. The overleveraged consumer cannot go to the bank to cash there check where they owe money or have a negative account.

Talking to the people that work at AEA (who come in to make certified checks to complete the payday loan) say they have new products and services that should become very profitable going forward.

The American consumer is screwed banks willfully gave out to much money and to people who cannot afford these credit limits. They have maxed out the credit lines and cards and are SCREWED!