FirstCash Stumbles On A Slower Near-Term Growth Outlook In Mexico

I’ve said several times in the past that FirstCash (FCFS) is a “second chance stock”; the inherent volatility of the business, magnified by financial leverage and “market leverage” (a higher risk premium) often leads to pullbacks that while not precisely predictable, have nevertheless been pretty consistent over the years. The post-earnings drop after third quarter results looks like another such opportunity.

Weak same-store pawn loan growth is something that shouldn’t be ignored, but I believe the underlying performance of the U.S. operation is improving, and I think the pressures on the Mexican operation are only a short-term issue. With a prospective annualized return now back in the double-digits, I think this is a name for more risk-tolerant investors to consider again.

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FirstCash Stumbles On A Slower Near-Term Growth Outlook In Mexico