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In his The Hedge Fund Trader, he explains, "This means business is likely to jump at the nation's pawnbrokers." Here, he looks at EZCorp (NASDAQ: EZPW).
"Both the economy and the financial markets need consumer confidence for things to go smoothly. That is sorely lacking right now. As a result, I'm expecting a bumpy ride during the next few quarters.
"Predictably, low-income earners and middle-class individuals will be particularly hard hit by the downturn. That means business is likely to jump at the nation's pawnbrokers.
"So now is an excellent time to pick up a few shares of EZCorp. Based in Austin, Texas, EZCorp is a leader in the 'specialty consumer finance industry,' better known as pawn broking.
"The company offers cash to credit-constrained consumers in more than 770 stores throughout 13 states and Mexico under the brands EZPAWN, EZMONEY, and EZMONEY Payday Loans.
"Business is already brisk. For the quarter ended June 30, its earnings jumped 60% to more than $10.8 million on a 24% increase in revenue.
"The company has demonstrated consistent staying power. This was its twenty-fourth consecutive quarter of year-over-year profit growth.
"And future growth is virtually assured. Not only will more cash-strapped consumers visit their local pawn shops in the months ahead, but EZCorp will have opened more than 70 new locations by the end of this year. And, incidentally, the company itself is not strapped for cash. It carries zero long-term debt.
"Most banks and retailers are trading in the cellar right now. But EZCorp is within spitting distance of a new 52-week high. I expect the stock to keep moving higher in the weeks ahead."
Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.
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Reader Comments (Page 1 of 1)
12-11-2008 @ 12:37PM
David said...
This is not surprising. Online pawnbroker, Borro - dot com -, is also reporting a jump in business as are many local pawnbrokers in London, Manchester and throughout the UK. Does this mean we are "officially" in a recession or are we all still 'imagining' it?