World economies have been in chaos; banks are lending less; silver rates have soared to over $1,800 an ounce. It might appear to be the entire world is closing, but for organizations that own pawn shops and conduct payday lending, it really is a recipe for strong profits development.
Among these organizations are EZCorp (ticker: EZPW) and money America Global (CSH). Both have significantly outperformed the wider market on the year that is past increasing 61% and 64%, correspondingly, when compared with a 5% rise for the Standard & bad’s 500 index.
” just What in fact is driving things is banking institutions, regulators and legislators have actually turned their backs on consumers, ” states Henry J. Coffey Jr., an analyst with Sterne Agee. “Everything they will have done during the federal degree has limited credit for consumers. “
The charge card Act of 2009 place limitations on credit-card loans, and because the advent associated with Dodd-Frank legislation this past year, banking institutions haven’t been in a position to lend to customers with dismal credit history. Analysts state these pieces of legislation—plus the surging price of silver—have brought cash-strapped customers to pawn stores in droves. This trend isn’t expected to reverse it self before the economy improves.
At A Glance
|Marketplace Cap:||$1.6 billion|
|Est. FY2012 EPS: *||$3.04|
|FY2012 P/E:||10.5 times|
|Est. Long-lasting EPS Growth: **||15%|
|Est. (FY’11/FY’12) EPS Growth:||19%|
|Revenue (trailing one year):||$804 million|
*Fiscal ends in September 2012 year.
** Based on analyst quotes searching ahead 3 to 5 years.
Sources: Barrons.com, Thomson Reuters