"Aaron Rents (NASDAQ: RNT) is a new addition to the focus list that carries both fundamental and technical strength," says Michael Vodicka, an analyst with Zacks Elite Investment Research.
"The company is a specialty retailer of consumer electronic goods like stereos and televisions that owns or operates 1,545 stores in the United States and Canada. Aaron Rents was founded in 1955 and has a market cap of $1.38 billion.
"In spite of a short-lived drop in mid October, this stock has held up well in an environment where consumers are pulling back on discretionary spending. The big share-price rebound was predicated on the company's solid third-quarter results, reported in late October.
"Revenue was up 16% from last year to $388 million. Income came in at $21.1 million, up from $15.9 million last year, a 32% increase. This produced earnings of 39 cents per share.
"The company noted that its same store revenue in its Sales and Lease Ownership division increased 5.7% from last year. And on December 22, Aaron raised its 2009 full-year earnings guidance to a range of $1.70 to $1.85 from the previous range of $1.65 to $1.80.
"CEO Robert Loudermilk provided some texture to the numbers, saying that the company's results 'continue to be strong with growing same-store revenue and customer counts. Unlike many other specialty retailers, our business has been thriving in this economic environment.'
"Meanwhile, the analyst community is bullish on the company's longer term prospects as well, with the next-year estimate pegged at $1.75 per share, am 8% earnings growth projection.
"The shares of RNT have been resilient since dropping in late October, bottoming out just above $15 and recently topping off just shy of $29."
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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