Author Topic: EZPW - EZCorp  (Read 70173 times)

Rainforesthiker

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Re: EZPW - EZCorp
« Reply #190 on: September 25, 2017, 07:37:13 AM »
I once had a sizable position in EZPW - I had continued to average down when the stock was tanking, and my average price was below $6 per share.  Recently I have been selling as the stock got over $9 per share.  I have almost cut my position in half at this point, and I will likely keep selling to get down to a more reasonable position size.  I don't want a large position here at these prices, and given the various potential management issues, dilution, etc.  But I do think there is more potential upside.
The key question:  What is the "inefficient rationale" - the reason the market is mispricing the stock.  Why doesn't the powerful force of the wisdom of the crowd manifest here to produce the correct price?


ragnarisapirate

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Re: EZPW - EZCorp
« Reply #191 on: September 25, 2017, 09:27:22 AM »
Iíve heard the pawn industry is really struggling and that a good number of pawn stores are on the verge of bankruptcy due to the economy continuing to be pretty good. I think you can see that in FCFS numbers where PLO is decreasing. However, EZPW has been increasing PLO, but I think that is because of how poorly it had been run. With that and the dilution at $10, I sold half. I think it could be worth a lot more, and maybe they have pulled off a huge acquisition in Mexico, but the situation, managementís recent behavior, and the general lower than expected earnings makes me nervous.

If there are struggling shops, the best thing ezpw could do is raise cash to buy them with. Pawn is a fantastic business. Fantastic!

Homestead31

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Re: EZPW - EZCorp
« Reply #192 on: September 25, 2017, 05:55:14 PM »


If there are struggling shops, the best thing ezpw could do is raise cash to buy them with. Pawn is a fantastic business. Fantastic!

agree - not sure what to say other than while pawn does well through a cycle and I would not consider it a cyclical business, if there is a cycle, the time you want to buy the business (any cyclical business) is at the bottom of the cycle.  With unemployment at record lows, this is the bottom of the cycle (if there is one).

KJP

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Re: EZPW - EZCorp
« Reply #193 on: October 09, 2017, 07:21:31 AM »
They just closed on the LatAm transaction they've been hinting at for awhile:  http://investors.ezcorp.com/home?item=315 
The transaction adds 112 pawn stores, with the majority (72) in Guatemala; none of them is in Mexico.

Last week they also restructured the Grupo Finmart note:  http://investors.ezcorp.com/2017-10-03-EZCORP-Restructures-Repayment-Arrangement-With-AlphaCredit



DTEJD1997

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Re: EZPW - EZCorp
« Reply #194 on: October 09, 2017, 09:36:16 AM »
They just closed on the LatAm transaction they've been hinting at for awhile:  http://investors.ezcorp.com/home?item=315 
The transaction adds 112 pawn stores, with the majority (72) in Guatemala; none of them is in Mexico.

Last week they also restructured the Grupo Finmart note:  http://investors.ezcorp.com/2017-10-03-EZCORP-Restructures-Repayment-Arrangement-With-AlphaCredit

A little too soon to tell for sure...but it appears to be a good deal and will significantly expand geographic reach, sales, and earnings of the company.

As I and other suspected, they were issuing the debt to make an acquisition.  The debt was expensive, but it well could be that it was "cheap" in comparison to the asset that they got.

We will see, but it looks to be a very positive development.

Homestead31

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Re: EZPW - EZCorp
« Reply #195 on: October 23, 2017, 10:47:47 AM »
Food for thought.

EZPW and FCFS are the only players in the pawn market with scale.

For the last few years, FCFS has been an aggressive acquirer.

For the last few years, EZPW has NOT been an aggressive acquirer b/c they had a whole slew of internal problems to deal with.

EZPW has largely moved past their internal problems, and is now once again an acquirer.

For the last few years, FCFS had no competition when they were making acquisitions, so they were able to pay lower prices.

Now, FCFS has to worry about EZPW, and any future acquisition is likely to be a competitive process, driving up prices.

If FCFS bought EZPW - which would require a significant premium based on multiples, massive synergies, and Cohen's control position - it would likely still be worth it to FCFS, because buy paying UP for EZPW, they would be able to pay DOWN for everything else.

Not saying it is going to happen tomorrow, but I think it is highly likely FCFS buys EZPW at a fat premium within the next 2-3 years.

DTEJD1997

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Re: EZPW - EZCorp
« Reply #196 on: October 24, 2017, 10:38:43 AM »
Food for thought.

EZPW and FCFS are the only players in the pawn market with scale.

For the last few years, FCFS has been an aggressive acquirer.

For the last few years, EZPW has NOT been an aggressive acquirer b/c they had a whole slew of internal problems to deal with.

EZPW has largely moved past their internal problems, and is now once again an acquirer.

For the last few years, FCFS had no competition when they were making acquisitions, so they were able to pay lower prices.

Now, FCFS has to worry about EZPW, and any future acquisition is likely to be a competitive process, driving up prices.

If FCFS bought EZPW - which would require a significant premium based on multiples, massive synergies, and Cohen's control position - it would likely still be worth it to FCFS, because buy paying UP for EZPW, they would be able to pay DOWN for everything else.

Not saying it is going to happen tomorrow, but I think it is highly likely FCFS buys EZPW at a fat premium within the next 2-3 years.

A very interesting thought! 

Do you happen to know about how many smaller operators are being bought out by FCFS?  If I am not mistaken, has this slowed down recently?  I also wonder what the dollar volume of buyouts has been vs. how much it would cost to buy out EZPW?

For example, if they have bought 100 pawn shops and paid $250MM for them...it might not make sense to take out EZPW, as it might cost $750MM to $1BB to acquire EZPW.  That would be simply too much to take out a competing bidder.

Of course, they would get all of EZPW's business too.  They would also get some nice Mexican and S. American operations too...

If EZPW's latest acquisition works out AND they continue to execute according to plan in the USA, they should be earning $1/share or maybe a bit more in 2 years.  I would imagine that a buyout would have to be at a good premium and I would guess somewhere around $20/share?


racemize

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Re: EZPW - EZCorp
« Reply #197 on: October 24, 2017, 10:44:15 AM »
FYI, I've heard of buyouts of U.S. pawn stores at $750k each recently.  Also, with the 25% dilution > $10, I struggle seeing EZPW getting to $1 EPS without a lot of operating leverage coming in.  I decided to sell out as I think it requires a lot of execution, and I'm not happy with the dilution.  They do need scale to get Latin America up to snuff, but they did it at a pretty bad time, stock-wise.  If it drops back down to $7 or $8, I'd be back in.  I can also see this going to $15+ if things go well.

DTEJD1997

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Re: EZPW - EZCorp
« Reply #198 on: November 15, 2017, 09:50:09 PM »
Hey all:

Anybody else besides me & Ragnar watching/owning EZPW?

They came out with pretty good earnings today after the market closed.  EPS of $.21/share even with the two hurricanes and the latest quarter traditionally being one of their slower ones.  This earnings was substantially more than even the most bullish analyst predicted.

I am going to guess that analysts are going to have to revise their estimates UP for the upcoming year.

Making $1/share in the near future does not look like such a stretch now.  If they can do that, the stock is probably undervalued.

Finally, also looks like their Mexican division is doing well.

Will be interesting to see where the stock opens tomorrow.

ragnarisapirate

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Re: EZPW - EZCorp
« Reply #199 on: November 15, 2017, 10:32:22 PM »
Hey all:

Anybody else besides me & Ragnar watching/owning EZPW?

They came out with pretty good earnings today after the market closed.  EPS of $.21/share even with the two hurricanes and the latest quarter traditionally being one of their slower ones.  This earnings was substantially more than even the most bullish analyst predicted.

I am going to guess that analysts are going to have to revise their estimates UP for the upcoming year.

Making $1/share in the near future does not look like such a stretch now.  If they can do that, the stock is probably undervalued.

Finally, also looks like their Mexican division is doing well.

Will be interesting to see where the stock opens tomorrow.

For what itís worth, I really like EZPW. Lots of intreresting things going on. Interesting how quickly, the bad governance practices have been forgotten.Neat business. Seemingly cheap price. Even an interesting hedge for a recession.