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.
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.
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.
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.
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.
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.