Another Payday Loan/Pawn Shop Breaks Out on Higher Guidance - A Trend Seems to be Afoot
This is the second name this week to breakout off of higher guidance; earlier in the week we saw
Cash America (CSH) (Jul 7: Missed Opportunity in Cash America) The past 2 days we have an incredible technical breakout (on the chart) of EZCORP (EZPW) on increased guidance. This is despite closing 11 stores in Florida. It looks like a trend, long awaited, has now arrived.
- EZCORP, Inc. (Nasdaq: EZPW - News) announced today that it expects earnings for the quarter ended June 30, 2008 to be approximately $0.25 per share, $0.04 per share better than its previously provided guidance of $0.21 and 56% greater than the $0.16 per share earned for the June 2007 quarter.
- For the fourth quarter and fiscal year ending September 30, 2008, EZCORP is raising earnings per share guidance to approximately $0.35 and $1.19.
- Commenting on these expected results, President and Chief Executive Officer, Joe Rotunda, stated, "In our June quarter, we realized stronger than expected sales gross profit in our U.S. EZPAWN operation and lower than expected levels of signature loan bad debt in our EZMONEY operation. While our pawn and signature loan portfolios grew during the quarter, their rate of growth was less than we typically see during this period -- leaving our loan balances at a lower than anticipated level going into our September quarter. All of these factors were influenced to some degree by the economic stimulus checks received by our customers during May and June."
Time to take a second scrub of the entire group - again, other names include
First Cash Financial Services (FCFS), Dollar Financial (DLLR), and Advance America (AEA).
The AP has a news story on this development as well... (always a bull market somewhere) Since I believe this is the early part of a much longer developing trend we need to look at these just as closely as we'd investigate
Walmart (WMT) or Big Lots (BIG) - all playing off the same Pooring of America trend. Once the rebate checks run out, these guys should really see business take it to yet another level. Once again we are faced with the dilemna of do we buy the breakout or hope for the pullback that may never come. I waited on a host of natural gas plays yesterday and they are each up 5-9% today.
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