Danger Zone Posted July 11, 2014 Share Posted July 11, 2014 Hi, I started looking in to CSH aseeing it mentioned on: http://basehitinvesting.com/top-25-compounders-that-are-cheap-some-thoughts-on-investment-process/ CSH operates pawn shops and provides small short-term cash lending through offices and online. Their main business is in USA, but they are also active in Canada, Mexico and the UK. The CEO describes the business in the latest annual report: http://www.cashamerica.com/Files/Annual%20reports/Cash_America_2013_Annual_Report.pdf It seems like a good company with an honest CEO (although my opinion is only based off of the latest annual report at this point), good underlying growth(about 16% top line growth over the last ten years), solid margins(5yr avg ROIC ~26%, Opm 13-14% and ROA 7-8 %) and a cheap price(P/FCF<3, P/E: 10, EV/EBIT: 7). Their profits have decreased as a result of the drop in gold prices, which might explain the weak share performance lately. Also, the CEO mentions increased regulatory pressure, which is something that I haven't looked in to yet. I will continue to research this company and I would love to hear any thoughts if anyone has looked at it. Note: I have no position in this stock and have just started looking at it, so do your own research! Link to comment Share on other sites More sharing options...
ragnarisapirate Posted July 11, 2014 Share Posted July 11, 2014 Hi, I started looking in to CSH aseeing it mentioned on: http://basehitinvesting.com/top-25-compounders-that-are-cheap-some-thoughts-on-investment-process/ CSH operates pawn shops and provides small short-term cash lending through offices and online. Their main business is in USA, but they are also active in Canada, Mexico and the UK. The CEO describes the business in the latest annual report: http://www.cashamerica.com/Files/Annual%20reports/Cash_America_2013_Annual_Report.pdf It seems like a good company with an honest CEO (although my opinion is only based off of the latest annual report at this point), good underlying growth(about 16% top line growth over the last ten years), solid margins(5yr avg ROIC ~26%, Opm 13-14% and ROA 7-8 %) and a cheap price(P/FCF<3, P/E: 10, EV/EBIT: 7). Their profits have decreased as a result of the drop in gold prices, which might explain the weak share performance lately. Also, the CEO mentions increased regulatory pressure, which is something that I haven't looked in to yet. I will continue to research this company and I would love to hear any thoughts if anyone has looked at it. Note: I have no position in this stock and have just started looking at it, so do your own research! You can learn a lot about a company by looking at their acquisitions. They bought out XPOI about 9 months ago (which DTJED and I played for the buyout arb). You might want to take a look at those numbers. Link to comment Share on other sites More sharing options...
Danger Zone Posted July 11, 2014 Author Share Posted July 11, 2014 Hi, I started looking in to CSH aseeing it mentioned on: http://basehitinvesting.com/top-25-compounders-that-are-cheap-some-thoughts-on-investment-process/ CSH operates pawn shops and provides small short-term cash lending through offices and online. Their main business is in USA, but they are also active in Canada, Mexico and the UK. The CEO describes the business in the latest annual report: http://www.cashamerica.com/Files/Annual%20reports/Cash_America_2013_Annual_Report.pdf It seems like a good company with an honest CEO (although my opinion is only based off of the latest annual report at this point), good underlying growth(about 16% top line growth over the last ten years), solid margins(5yr avg ROIC ~26%, Opm 13-14% and ROA 7-8 %) and a cheap price(P/FCF<3, P/E: 10, EV/EBIT: 7). Their profits have decreased as a result of the drop in gold prices, which might explain the weak share performance lately. Also, the CEO mentions increased regulatory pressure, which is something that I haven't looked in to yet. I will continue to research this company and I would love to hear any thoughts if anyone has looked at it. Note: I have no position in this stock and have just started looking at it, so do your own research! You can learn a lot about a company by looking at their acquisitions. They bought out XPOI about 9 months ago (which DTJED and I played for the buyout arb). You might want to take a look at those numbers. Wow, those are some dilutive multiples. 62m for a company with a negative equity of 12m, EBIT of 2.7m and 43m in revenues. This is for a business that should have mild growth prospects at best. Unless they see some amazing synergies with this acquisition, it doesn't reflect well on their capital allocation. Especially considering their very low dividend payout. Thanks for bringing that to light! Link to comment Share on other sites More sharing options...
Phaceliacapital Posted July 11, 2014 Share Posted July 11, 2014 A similar pawn gold price casualty is H&T: https://www.google.com/finance?q=LON%3AHAT&ei=dQ3AU5GGGIqKwwOtq4HgAw Link to comment Share on other sites More sharing options...
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