China Stock Ideas

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EZ Corp -- >>> Three Stocks Better Than Their Prices

By MoneyShow.com
Jul 09, 2012


http://www.minyanville.com/trading-and-investing/stocks/articles/ezpw-hurn-avav-stocks-to-watch/7/9/2012/id/42264?camp=syndication&medium=portals&from=yahoo




In this kind of market, any disappointment -- even the expectation of disappointment -- can take a big toll on a stock, and so it is for the trio below, which have big days ahead of them.

The slowing economy has been taking its toll on stocks, with the market in the mood to punish any company offering even a whiff of disappointment. Unfortunately, we’ve had our share.

You would think that given the struggling economy, pawn shops would be thriving. For EZCorp (EZPW), the nation’s largest pawn shop operator, store traffic continues to grow at a good rate, and revenues are climbing in the high teens. But with more people hocking household items than gold lately, margins have shrunk.

The stock also has been hurt by concerns about legislative efforts to rein in underwriters of payday and other high-rate, short-term loans, which represent 15% of the company’s income. We think those fears are overblown, however.

The company expects full-year profits of around $2.90 per share, meaning the stock is selling at less than eight times forward earnings despite prospects of growth of 15% or so in the next several years. EZCorp remains a buy.

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