The history of pawn shop operator First Cash Financial (FCFS) has always been marked by pullbacks and retracements, and those have often been good times to reload on what has been an excellent decade-long growth story. Although concerns about the health of the Mexican operating environment and the direction of gold have pulled this stock back from its highs, First Cash remains a high-growth/high-return play with a big international kicker.
A Dose Of Reality To End The Year
Although First Cash had enjoyed a pretty good run for much of 2011, the stock has weakened lately on worries about the health of the company's Mexico operations. Supplying over half of the company's revenue and a lot of the growth, conditions in Mexico have weakened in part due to violence in Northern Mexico, some reduction in loan demand as the economy softens, and lower loan-to-value ratios as the company works to maintain margins and pricing discipline. Making matters a little worse, a weakening peso is a threat to earnings as well.
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Another Pullback, Another Opportunity In First Cash Financial
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