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Earnings momentum for World Acceptance Corporation (WRLD - Snapshot Report) has been advancing since this consumer finance company reported a strong fiscal first quarter on July 26. This Zacks #1 Rank (Strong Buy) trades at a P/E multiple of just 8.9, which makes it an attractive value investment.

Impressive Fiscal First Quarter Results

World Acceptance Corporation earned $1.63 per share in its fiscal first quarter 2013, topping the Zacks Consensus Estimate of $1.50 by 8.7% and the year-ago earnings of $1.27 by 28.3%. Total revenues advanced 7.9% to $132.8 million from $123.2 million a year earlier.

Interest and fee income climbed 7.5% year over year to $115.3 million, aided by loan volume growth and expansion of offices. Additionally, the company's insurance and other income surged 10.9% to $17.5 million. However, total expenses escalated 6.6% to $96.7 million.

Credit metrics was a mixed bag for World Acceptance Corporation. Net charge-offs were 12.2% of average loans outstanding, down 30 basis points from the year-ago quarter. However, provision for loan losses increased 3.5% from the year-ago quarter to $23.6 million.

Earnings Momentum on an Upswing

Over the last 30 days, the Zacks Consensus Estimate for fiscal 2013 advanced 1.1% to $8.31, implying year-over-year growth of 26.0%. For fiscal 2014, the Zacks Consensus Estimate increased 1.3% to $9.32 over the same time frame, indicating year-over-year growth of 12.2%.

Reasonable Valuation

Along with a low P/E multiple, World Acceptance Corporation has a P/B multiple as low as 2.6. (A P/E ratio under 15.0 and a P/B ratio below 3.0 generally indicate value). The company has a trailing 12-month return on equity (ROE) of 25.0% compared with the peer group average of 19.3%. This signifies the efficient reinvestment efforts by the company compared to its peers.

Headquartered in Greenville, South Carolina, World Acceptance Corporation is involved in the small-loan consumer finance business. The company provides short-term and medium-term loans, along with related credit insurance, and ancillary products and services to individuals. The company was founded in 1962 and through its subsidiary ParaData Financial Systems it also markets computer software and related services to financial services companies. World Acceptance Corporation operates through 1,141 branch offices in South Carolina, Georgia, Texas, Oklahoma, Louisiana, Tennessee, Missouri, Illinois, New Mexico, Kentucky, Alabama, Wisconsin and Mexico. With a market capital of about $991.6 million, World Acceptance Corporation competes with Discover Financial Services (DFS), among others.

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