(Filed under stock picking, stock advice, hot stocks, stock tips , trading tips)
As I recommended a stock like EZPW on 2/28/09..I know earnings are coming out this month on the company after the bell on 4/23/09-next Thursday..I am letting you know to hold the stock through earnings..We dont necessarily sell a stock after earnings on a runup either all the time..Our forecasts are sometimes simple –in a recessionary economy–lenders of last resort should prosper..If the economy tumbles,people will be forced to come up with much needed cash to just make ends meet as a last resort..People will be forced to sell discretionary stuff that isnt essential via EBAY or their local pawn shop..I recently saw an unemployed man in a local newspaper who was laid off at his construction place and not getting unemployment benefits who was selling some tool at a pawn shop probably at a low price just to make ends meet..That in itself can be telling..I strongly doubt any other scenario than a strong surge in growth this year from EZPW..
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This stock is a timely one in our opinion..We like legal loan sharks in a recessionary climate–that it is not a bad business in any climate..The pawn shop side of the business of EZPW has recorded 25 straight quarters of year over year growth..Historically,its a mid-teen ROE story for backing of performance..There could be some Administration clamping down on these quick loan providers, but I think the acquisition phases we have seen lately in Mexico (see our blog on EZPW on 2/28/09) and general industry consolidation will make accretive growth opportunities over any short term handle of interest caps on pay day loans…If you have no shares of EZPW,we recommend to buy and hold for a while..If something changes–I will let you know when I read the conference call on 4/23/09 after the bell..We are not gamblers–see our blog on 4/3/09–our 10 stocks recommended on 2/12/09 and some later that month has yielded an average of 17% rate of return on all 10 stocks with only one down since recommendation on 4/3/09…As I checked on 4/13/09–the average rate of return was 23.8% after the bell on 4/13/09 on 11 stocks–one locked in gain out of the 11…Although I havent checked since,it probably has dropped some since on the rate of return, but not much..We are not ticker tape ‘scanners’…So as your wealth accumulates,you have to be careful not to be overconfident..Be wary when the market is overcome with too much buying and excited when you see too much selling..That is when real buying power can happen if you see a great undervalued company..EZPW should outperform the market averages this year in our opinion..If you bought shares of EZPW around our recommendation of just under 10.00 a share–you should be up about 28% since around 2/28/09..However,this stock still has room to climb in our opinion…
Both Rob and Mike currently own no shares of EZPW or EBAY stock…Please do your own independent research before you make an investment purchase..See our disclaimer.
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