Last Updated On: January 1, 2019
Share Price On This Date: $35.77
Offers alternative financing services both online and through an expanding chain of retail outlets.
This is what Peter Lynch would call a GARP stock. (Growth at a Reasonable Price) By my calculations the stock is trading at a p:e of around 10 to earnings that have doubled in the past 3 years. They started out life operating a chain of rent-to-own stores that would rent out TVs, sofas, appliances, etc. to customers who didn't want to purchase the goods outright. In running this business, they saw a need among their customers for credit that wasn't being met by the big banks. They saw a window to position themselves between the somewhat predatory payday loan stores and the disinterested, larger banks and to this end, they have been aggressively rolling out their Easy Financial network over the last few years. Revenues and earnings have been soaring and the company still sees room for plenty of growth. They are expanding their network into the province of Quebec, they are adding new customers to their existing outlets and they are adding new products to their growing suite of financial services.
The stock was hit this fall by a short seller’s report that raised concerns about the possibility of new legislation that might regulate the fees and interest rates that they can charge as well as concerns over the quality of their loan book and whether or not they are provisioning properly for loan losses. While these are certainly legitimate concerns, the valuation is low enough and the outlook is sufficiently appealing that I remain fully invested.
For the full, in-depth review, please see Spotlight on GoEasy.