World Acceptance Corporation

World Acceptance Corporation (WRLD - Snapshot Report) recently reported record fiscal fourth quarter results as small loan demand remained strong in the U.S. and Mexico. This Zacks #1 Rank (Strong Buy) also has attractive valuations, with a forward P/E of just 8.7.

World Acceptance specializes in short-term small loans, medium-term larger loans, and related credit insurance products to individuals with limited access to sources of consumer credit in 12 states and Mexico.

The company is also the parent company of ParaData Financial Systems which provides software solutions for the consumer finance industry.

At the end of fiscal 2012, it had 1,237 offices in the United States and Mexico.

World Acceptance Beat By 5 Cents In Fiscal Q4

On Apr 26, World Acceptance its fiscal fourth quarter results and surprised on the Zacks Consensus by 2%. Earnings per share were $2.54 compared to the consensus of $2.49. That was 20.4% higher than the year ago period.

Revenue rose 8.8% to $148.9 million in the quarter. Interest and fee income rose 9.1%, boosted by a 10.6% increase in net average loans.

Gross loans outstanding climbed 11.2% to $972.7 million from $875 million in the year ago quarter.

For the full year, earnings rose 20.4% to a record $6.59. Revenue was up 9.9% to $540.2 million.

Revenue was boosted by strong loan demand across its markets and new offices in the U.S. and Mexico.

World Acceptance also saw lower bad debt costs reflected in 12 consecutive quarters of flat or decreased charge-offs as a percentage of net loans when compared to the corresponding quarters of the prior years.

Fiscal 2013 Zacks Consensus Estimate Rises

Given the beat in the fourth quarter and an optimistic outlook for fiscal 2013, the analysts have been raising fiscal 2013 estimates.

4 out of 4 estimates have moved higher in the last 30 days, pushing the fiscal 2013 Zacks Consensus Estimate up to $7.89 from $7.53.

That is earnings growth of 19.7% compared to fiscal 2012.

Plenty of Value

Unlike the rest of the stock market, World Acceptance has had a choppy 2012. Its share price actually declined in much of 2012 before recently reversing course.

But it's valuations are still attractive.

In addition to a P/E under 10 and also well under the S&P 500 average of 13, it also has a price-to-book ratio of 2.4. A P/B under 3.0 usually indicates value.

World Acceptance has other strong fundamentals, mainly a 1-year return on equity (ROE) of 24%.

If you're looking for a play on tight credit, World Acceptance is a value stock to consider. Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her on twitter at @TraceyRyniec.