+ Watch FCFS
on My Watchlist
The Company is a provider of consumer financial services and related specialty retail products.
constant growth over many years, which has a good potential to continue
It's all explained here:http://seekingalpha.com/article/322386-payday-lenders-offer-big-upside-despite-regulatory-hurdles
EC likes $FCFS because of growing earnings and revenues and aggressive expansion. Company will do well if gold continues to appreciate.
Pawn is booming.Profit siked 45% and revenue was up 27%
I did a fair bit of DD on FCFS over the weekend. I'm quite impressed with what I have learned about the company, and their prospects. They have a very useful investor presentation on their website, which is well worth reading.Since 2002, 9 years, the company has grown from 125 to 222 pawn shops in the US, and from 29 to 392 pawn shops in Mexico, contributing 56% of their revenue from Mexico pawn shops, 33% from US pawn shops, and 11% from payday check cashing/loan stores in the US. The Payday loan business is being sold off bit by bit as a result of their decision to get away from this highly regulated and controversial business.Q4/2010 was a record breaker, with $0.56 EPS, up 40%, and $1.65 fiscal EPS, up 30% from prior year. Revenues were up 42% in 2010, and the company generated $32M in free cash flow. Since 2006, the company is enjoying 31% CAGR in Mexico, versus 9% in the USA, giving them a 21% total EBITDA CAGR over the past 4 years. The balance sheet has dramatically improved also in the past two years, virtually eliminating all debts, and giving them $67M in cash. They are also sporting a ROE of over 20%. Margins have been improving every year also, from 26% in 2007, to 29% in 2010.2011 guidance was increased from $2.12 to $2.20 a few weeks back, and the company recently acquired 6 new stores in February, contributing to their growth strategy. The neat thing is they are funding their store acquisitions from operating cash flow, while paying down debt, so the business is literally funding all the expansion with cash. In summary, it is rare to find a company that is hitting on all cylinders like FCFS is. I have very strong conviction in the prospects for FCFS, so I am adding them to my portfolio, pronto.
it will continue to grow above s&p 500 average levels and is currently undervalued
I originally put a 1Y timeframe on First Cash to capitalize on the comeback I envisioned from the AutoMaster debacle. That went better than I expected. The company has also done a fine job of reducing its exposure to the payday loan industry in states where it could no longer run a profitable business, while continuing to expand its pawn store count and profitability, primarily in Mexico. I like this now as a long term investment and have changed the time frame to the maximum. I expect them to continue to strengthen their Balance Sheet, now that they are focused on their core competency.
P/E of 14 with a growth rate of 15%
Strong Buy from Ford Equity Research, Q/Q revenue increase, starting to recover from recent pull back forming a cup with handle pattern.
Before their foray into the auto market, their earnings increased25% quarter over quarter for years. They have now shed threiralbatross and stick to what they do, they should do well.
strong 5 year ROE& profit margin improvement and still at reasonable PE ratios
Earnings. The only potential glitch is government intervention. Mgmt is honest, forward looking and flexible.
It has been upgraded by a professional with a target price of $20. I believe FCFS will hit that target price and thus will outperform the S&P 500. Also, this company makes short term loans and its main business if a pawn shop. It does not carry the high risk that banks and other financial companies do right now.
Recovering financial status
nothing worse than picking a stock and then not actually buying it! My first Motley fool issue early spring last year I think, price was aruond $7.00 I didn't even have a brokerage account then. So by the time I got up and running this may, it was all ready up to at least $12.00, I figured it was too late and didn't buy it. Idiot!
If they can focus on their core business, it is a cash cow.
Economy is crappy, credit is hard to come by (which is why rental centers will not do well), so where do you go when you need some cash?
In this time of hardships people will need o borrow money and pawn their items.
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