Seeking Alpha: It's Not Just Gold That's Troubling EZCORP

This hasn't been the easiest year for pawn and payday lenders not named First Cash Financial (FCFS), and EZCORP (EZPW) has certainly found itself caught in that downdraft, with the shares down more than 40% over the past year. While fellow Seeking Alpha writer Igor Novgorodtsev gave a good rundown on EZCORP's gold scrapping issues, I believe there is more at work here than just the price and profitability of gold scrapping. Not only does EZCORP have a shareholder-unfriendly structure, but the company's losses on consumer loans and market positioning both concern me.

Now, the real question is how much a "concern" is worth. I think First Cash is hands down the better company (and I've owned it for quite a while), but it's hard to see EZCORP get hammered to such a level and not wonder if it has gone past the point where enough's enough. I do worry about EZCORP's fundamental market positioning and the risk to the model from both credit losses and regulatory changes, but even conservative assumptions seem to suggest these shares could hold real turnaround potential.

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It's Not Just Gold That's Troubling EZCORP