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Momentum

Cash America Int. (CSH - Snapshot Report) continues to benefit from high unemployment, recently hitting a new all-time high after reporting a 14% earnings surprise. With estimates on the rise and a bullish growth projection, this Zacks #1 Rank stock has momentum for the long run.

Company Description

Cash America Int, Inc. is a specialty finance company that provides payday lending services and operates pawn shops. Cash America has over 1,000 locations in both the United States and Mexico and has a market cap of $1.45 billion.

As high unemployment persists after the recession, consumers are looking to less traditional means to generate short-term cash flow. That has been a big boost to the payday lending and pawning industry, lifting Cash America to strong Q2 results from late July that came in ahead of expectations.

Second-Quarter Results

Revenue for the period was up 14% from last year to $292 million. Earnings also came in strong at 89 cents, 14% ahead of the Zacks Consensus Estimate.

The good quarter was driven by strong performances from both lending and pawning services, with pawn loan fees and service charges up 14% while consumer loan fees were also up 14% to $132 million.

Estimates

We saw some pretty solid movement in estimates off the good quarter, with the current year adding 14 cents to $4.41 while the next-year estimates gained 19 cents to $5.09, a bullish 15% growth projection.

Valuation

But in spite of the gains over the last few years, the valuation picture still looks solid, with a PEG ratio of .73 well below the benchmark of 1 for value.

5-Year Chart

On the chart, shares recently pulled back in the weak market after hitting a new all-time high in late September, but the long-term trend is still bullish. The stochastic below the chart says shares are over sold, take a look below.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Momentum Trader Service.

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