As I have written on many occasions, one of the larger unmet expectations among First Cash Financial Services' (NASDAQ:FCFS)
investors and analysts has been the lack of a big acquisition in Latin
America to take the company beyond its very successful operations in
Mexico. While management has now in fact made a big acquisition outside
of the U.S., it is not exactly the strong entry into a large new market
that some investors wanted.
Acquiring more stores in Mexico should round out the
company's business from a geographical perspective and significantly
accelerate the achievement of the company's desired footprint. The
incremental expansion into Guatemala and El Salvador is nice, but not
really game-changing. The paucity of detail that First Cash provides
makes modeling challenging, but I believe this deal does improve the
fair value by about 4% to 10% relative to my prior expectations.
Read more here:
First Cash Financial Makes Its Move
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