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Momentum

Michael Vodicka

Advance America Cash Advance Centers, Inc.

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Advance America Cash Advance Centers, Inc. (AEA) has seen big gains over the last six months, almost doubling in price after recently topping off just shy of $9. With another great quarter in hand and a bullish growth projection, this Zacks #1 Rank stock is a leader in momentum.

Company Description

Advance America, Cash Advance Centers, Inc. provides cash advance services in the United States, the United Kingdom, and Canada. The company was founded in 1997 and has a market cap of $534 million.

Shares of AEA have been racing higher for the last six months as earnings continue to accelerate in the weak economy. That was on display when the company reported strong Q3 results in late October that came in ahead of expectations.

Third-Quarter Results

Revenue for the period was up 3% from last year to $159 million. Earnings also looked good, coming in at 24 cents, 14% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 20% over the last four quarters.

The company also declared a nice quarterly dividend of .0625 cents, which equates to an annual dividend yield of 3%.

Financial Profile

Advance's financial profile was also on the upswing, with cash and equivalents up $9 million to $36 million while long-term debt fell $500,000 to just $3.2 million.

Estimates

We saw some decent movement in estimates off the good quarter, with the current year adding 3 cents to 95 cents. The next-year estimate is pegged at $1.12, a bullish 18% growth projection.

Valuation

With a PEG ratio of .5, TTM trades at a sharp discount to the benchmark of 1 for value.

2-Year Chart

On the chart, shares have seen big gains in the last 6 months, hitting a new all-time high in July before pulling back with the market. Take a look below.

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

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