Yes you read that correctly. I still believe a dollar invested in EZCorp (EZPW) will earn 33 times that of a dollar invested in America's sweetheart Apple Inc (AAPL). Of course anyone can make any proclamations that they want. Few dare as I have to post the results when they are not favorable as I have over the past five years.
Today however, I will not be swallowing my pride as EZCorp, a leading pawn shop and cash advance company, has indeed out performed the tremendously successful Apple since the original story. It is worth mentioning to those that would point to Apple's ten-year run that EZPW was the better stock over the long haul as well.
Two weeks ago I posted Chasing Value: EZCorp Still a Bargain and the stock has moved to new record highs almost every day since. Perhaps investors are finally paying attention to my view. In that post, when the stock was around $29 I thought fair value was closer to $35 and it is moving that way trading around $32.50
Back to the the EZCorp versus Apple update. The following is the six-month chart. Since the initial story EZCorp continues to outperform, increasing the spread by 45%.
So what now? I think EZCorp will continue to methodically move upward as the company increases its number of outlets with relatively predictable returns. Apple on the other hand will most likely be higher by the end of the year, but a lot more guess work is involved and I would be very surprised if it could catch EZCorp.
If you are interested in getting into EZCorp I would suggest dollar cost averaging or selling puts to open at a lower strike price, like September $30's offering a $2 premium. If you do both you will get in at today's price and the $2 premium will be like getting a discount to today's price.
Whether my contention holds true or not I will follow up again in six months.
Sheldon Liber is an architect and the CEO of Chasing Value™ Asset Management, Inc. He writes the columns Chasing Value™ and Serious Money and is on twitter: @ChasingValue. Disclosure: Mr. Liber currently owns shares and options of EZPW.