Tag - Fcfs

High-unemployment continues to plague the U.S. economy.

According to the Department of Labor, the official unemployment rate recently increased to 9.1%. It's tough to imagine the illusion of a recovery extending much longer when millions of people are unemployed.

And it doesn't take a market expert to absorb all of the aforementioned economic data and come to the conclusion that the U.S. economy is in trouble.

So the question as a small cap investor or any investor for that matter is - how can we profit from high-unemployment and a struggling economy.

Small-cap stocks got hammered today as worries about the economy amid rising unemployment and fresh profit warnings in the technology sector sparked a wave of selling. Some of today’s small-cap gainers are InterOil (NYSE:IOC), ICT Group (Nasdaq: ICTG) and Synaptics Inc. (Nasdaq:SYNA).

Other Market Watch highlights today included:

• Decliners are leading advancers five to one on the Russell 2000.  
• President-elect Obama this morning said his stimulus plan will likely be at the high end of expectations, which helped pull stocks off the lows.  
• Intel issued a warning about revenue, which sent chills through the tech sector and kept concerns about the recession on the front burner.  
• Before the opening, the ADP National Employment Survey reported that 693,000 private sector jobs were lost in December, a record high for the survey which started in 2001.

Small Cap Gainers:

• InterOil said it commenced drilling into the Antelope reservoir, following the confirmation of gas and condensate at the top of the reef announced on Dec. 31. Shares are 15.7% higher at $17.45. (See NYSE:IOC)  
• Customer management outsourcing firm ICT Group is up 12.7% at $6.64 after Tuesday's announcement of a "refocusing" of its resources. (See Nasdaq:ICTG)  
• Synaptics Inc. is up 7.3% to $20.38 after news this morning of an upgrade by Lazard Capital. (See Nasdaq:SYNA)  
• Avocada company Calavo Growers, Inc. is up 6.6% to $12.51 after reporting record 4Q and FY2008 results before the opening. (See Nasdaq:CVGW)  

Small Cap Losers:

• Shoe, accessory and apparel maker Steven Madden Ltd. is down 12.5% to $19.95 after a downgrade by CL King. (See Nasdaq:SHOO)  
• The Knot, Inc., a lifestage media company that provides multiplatform media services to the wedding and newlywed markets in the U.S., is down 14% to $7.75. (See Nasdaq:KNOT)  
• Payday lending companies EZCorp and First Cash Financial Services are down by double-digit percentages amid expectations the incoming administaration will tighten regulations on the industry. (See Nasdaq:EZPW, Nasdaq:FCFS)

Small-cap stocks remained sharply lower into mid-session, but were up from the extreme morning lows. Losses were stirred by worries over the economy, a revenue warning from key tech player Intel Corp and news of a big fraud from a major Indian outsourcing firm.  Some of today’s small-cap gainers are InterOil (NYSE:IOC), ICT Group (Nasdaq:ICTG) and AK Steel (NYSE:AKS).

Other Market Watch highlights today included:

• Looking at the chart picture, the Russell 2000 finished Tuesday near a test of logical resistance at 514.50 but appears set to retreat from that zone early today.  
• The ADP National Employment Report showed a startling drop in jobs of 693,000, way above the forecast for a decline of 480,000.  
•The Dow is expected to open about 125 points lower, while the Russell 2000 is seen down about 1.2%, near 508.50.  
• U.S. stocks are expected to open lower, pulled down by declines in Europe and a private employment survey this morning that came in weaker-than-expected.

Small Cap Gainers:

• InterOil said it commenced drilling into the Antelope reservoir, following the confirmation of gas and condensate at the top of the reef announced on Dec. 31. Shares are 15.7% higher at $17.45. (See NYSE:IOC)  
• Customer management outsourcing firm ICT Group is up 12.7% at $6.64 after Tuesday's announcement of a "refocusing" of its resources. (See Nasdaq:ICTG)  
• AK Steel is 7.1% higher at $11.96 after Goldman Sachs upgraded the firm to "Buy" from "Neutral." (See NYSE:AKS)  
• Finish Line Inc. is up 6.5% at $5.73 after reporting a narrower 3Q loss after the close Tuesday. (See Nasdaq:FINL)  

Small Cap Losers:

• Shoe, accessory and apparel maker Steven Madden Ltd. is down 12.5% to $19.95 after a downgrade by CL King. (See Nasdaq:SHOO)  
• The Knot, Inc., a lifestage media company that provides multiplatform media services to the wedding and newlywed markets in the U.S., is down 14% to $7.75. (See Nasdaq:KNOT)  
• Payday lending companies EZCorp and First Cash Financial Services are down by double-digit percentages amid expectations the incoming administaration will tighten regulations on the industry. (See Nasdaq:EZPW, Nasdaq:FCFS)

The Russell 2000 (NYSE: IWM) went through the roof today as a late rally in financial shares lifted all the major U.S. indices. The small-cap index advanced 21.86 points, or 3.26%, to 693.43. The Dow Jones Industrial Average (INDU) gained 298.98 points, or 2.50%, to 12,270.17.

On a year-to-date basis, the Russell 2000 has lost 9.48%, while the Dow has let go 7.50% and the S&P 500 is missing 8.84%.

Small-cap stocks outpaced their larger brothers today as speculation of more rate cuts fueled the late-session rally.

February fed funds futures overwhelmingly suggest that the U.S. Federal Reserve will vote to lower its target for the federal funds 0.75% during its two-day meeting starting Jan. 29. A reduction of at least 0.50% is seen as a sure bet.

On Tuesday, the Fed lowered the federal funds rate, the rate at which commercial banks make overnight loans to each other, to 3.50% from 4.25%.

Shares representing the financial sector were invigorated and freed themselves of the bears’ grasp. Among the few exceptions was consumer financial services provider First Cash Financial Services, Inc. (Nasdaq: FCFS), which issued a 2008 earnings guidance below analysts’ projections.

Here are the current biggest percentage gainers and losers among companies with a market cap between $100 million and $750 million:


• CompuCredit Corp. (CCRT), up 29%.
• Buckeye Technologies Inc. (BKI), up 24% on news it will lay off between 20 and 25 employees at a production facility in Canada. That’s up to 16.6% of the plant’s workforce.
• Stanley Furniture Co. (STLY), up 22%.


• Human Genome Sciences, Inc. (HGSI), down 44% on news of serious side effects from a study of a hepatitis C drug. Shares have been downgraded by analyst.
• First Cash Financial Services, Inc. (FCFS), down 35% on news it has lowered its full-year earnings forecast.
• The PMI Group, Inc. (PMI), down 15%.

The Russell 2000 (NYSE: IWM) futures are down sharply and the small-cap index will open with a drop.

Helping fuel the bearish mood is Apple Inc. (Nasdaq: AAPL), which forecasted after the close on Tuesday that its second-quarter sales growth will slow to 29% from the 35% growth seen in the first quarter.

The reason: the Cupertino, Calif.-based company does not expect to be able to sustain previously strong sales of its trademark iPod.

Otherwise, Apple reported that its first-quarter profit was $1.58 billion, or $1.76 per share, compared with $1 billion, or $1.14 per share, a year earlier.

Contributing to the pessimism is Motorola Inc. (NYSE: MOT), which forecasted that it will swing to a loss in the current quarter due to sluggish demand for its mobile devices.

Here are the biggest percentage gainers and losers in pre-market trading among companies with a market cap between $100 million and $750 million:

Biggest percentage gainers:

• Globecomm Systems, Inc. (GCOM), up 14%.
• Corinthian Colleges, Inc. (COCO), up 11% despite news on Tuesday that it has lowered its 2008 guidance.
• Pharmasset Inc. (VRUS), up 6%.

Biggest percentage losers:

• First Cash Financial Services, Inc. (FCFS), down 22% on news of a decline in fourth-quarter profit.
• Charlotte Russe Holdings, Inc. (CHIC), down 9%.
• Hoku Scientific, Inc. (HOKU), down 9% on news of a fiscal fourth-quarter sales guidance below Wall Street’s expectations.

First Cash Financial Services, Inc. (Nasdaq: FCFS), an operator of pawn stores that provide consumer financial services in the United States and Mexico, reported disappointing fourth-quarter results after Tuesday’s close and issued 2008 earnings guidance below the consensus on Wall Street.

The missed estimates and lackluster outlook sent shares barreling lower by 21.9%, or $3.08, to a new 52-week low $11 in pre-market trading. Shares of the small cap have been trading in the range of $12.80 to $25.80 for the past 52 weeks.

For the three months ended Dec. 31, 2007, the Arlington, Texas-based company recorded earnings per share of $0.18, below the Thomson Financial mean of $0.38, as polled by five analysts. The current quarter’s results compare with $0.27 earned in the fourth quarter of 2006.

The company attributed the decline in earnings to weaker-than-expected operating results from its Auto Master division and the quicker-than-expected closing of short-term loan operations in the District of Columbia.

First Cash said it will also record, as a component of discontinued operations, a one-time charge of $0.02 per share for store closing expenses.

Fourth-quarter revenues increased 25% to $107 million, but still fell short of the consensus of four analysts surveyed by Thomson Financial of $114.46 million. The company earned $86 million in revenue in the prior-year quarter.

Same-store revenue increased 12% in the company's pawn and short-term loan stores over the fourth quarter of 2006.

Guiding forward, First Cash (FCFS) said it expects earnings for 2008 in the range of $1.17 to $1.20 per share on account of its discontinued operations in D.C. and a more cautionary outlook for its Auto Master division. The consensus of six analysts surveyed by Thomson Financial is for earnings of $1.51 per share.

A rollercoaster ride of trading today ended with the Russell 2000 (NYSE: IWM) gaining ground while the Dow fell after news of a temporary rise in the price of oil. The small-cap index added 1.54 points, or 0.19%, to 824.89. The Dow Jones Industrial Average (INDU) shed 20.40 points, or 0.15%, to 13,892.54.

On a year-to-date basis, the Russell 2000 has increased 4.76%, while the Dow has added 9.11%.

Stocks began on a bullish note following news of better-than-expected third-quarter earnings from tech sector heavyweights Intel Corp. (Nasdaq: INTC) and United Technologies Corp. (NYSE: UTX), but quickly shed those gains halfway through the trading session as the price of oil briefly rose to an intraday high above $88 a barrel.

Investors got jittery around noon ET, after the Turkish parliament overwhelmingly approved a military attack into northern Iraq in order to fight Kurdish rebels, causing the price of oil to clear $88 a barrel before moderating down to $87.40. A cross-border spat could disrupt Iraq’s oil supplies.

Nevertheless, small caps managed to sneak into positive territory just before the close, while the Dow languished in the red.

Meanwhile, U.S. housing starts fell to the lowest annualized pace in 14 years in September. The U.S. Census Bureau announced today that housing starts fell to 1.191 million, missing economists’ projections of 1.285 million. The level in August was an upwardly revised 1.327 million of privately owned housing units.

The stagnation in the housing sector seems to have no end in sight, as building permits, an indicator of future construction plans, also fell.

Triad Guaranty Inc. (Nasdaq: TGIC), WebMD Health Corp. (Nasdaq: WBMD) and ACA Capital Holdings, Inc. (NYSE: ACA) are among the biggest percentage losers in Wednesday's trading among companies with market capitalizations under $750 million.

Here are today's biggest percentage losers:

Shares of First Cash Financial Services, Inc. (Nasdaq: FCFS) are easing in pre-market trading after the provider of consumer financial services reported third-quarter earnings a penny shy of the Street’s estimates.

For the three months ended Sept. 30, the Arlington, Texas-based small cap recorded earnings per share of $0.32, a shade below the consensus of six analysts surveyed by Thomson Financial of $0.33 per share. First Cash recorded earnings of $0.25 per share in the third quarter last year.

Revenue increased by 51%, to $105 million, compared with $69 million in the third quarter of 2006.  Three analysts polled by Thomson Financial were on average expecting $99.81 million in revenues.

For the full year, the company is maintaining its guidance and anticipates earnings per share in the range of $1.25 to $1.30 per share. Six analysts surveyed by Thomson Financial are on average forecasting earnings per share for the full year at the top end of the guidance range of $1.30.

Shares of First Cash (FCFS) edged down 0.33%, or $0.08, to $24 in pre-market trading. Shares of First Cash have been trading in the range of $19.33 to $26.47 for the past 52 weeks.

Two of the biggest players in the so-called specialty consumer finance segment are small caps EZCORP, Inc. (Nasdaq: EZPW) and First Cash Financial Services, Inc. (Nasdaq: FCFS). Many Americans are living paycheck to paycheck, and a new lending segment, specialty consumer finance, has evolved to meet the needs of this group of customers. Americans with no savings and bad credit ratings have few choices when they need to borrow money. Most are forced to rely on the services of specialty consumer lenders. These lenders generally offer more flexible underwriting and payment terms but charge higher interest rates and fees.  

Cash advance, which entails borrowing against a future paycheck, is the largest specialty finance segment. The number of cash advance stores nationwide grew to 24,000 last year and is forecast to nearly double to 40,000 locations over the next decade. Pawnshops are another familiar specialty lending segment. There are approximately 15,000 pawnshops across the United States, most of which are owned by mom-and-pop operators. Because this market is very fragmented, opportunities exist for a large player to consolidate the market through acquisitions.

EZCORP offers non-recourse loans collateralized by personal property (pawn loans) and also sells merchandise forfeited from its pawn lending operations. The company also owns a network of cash advance locations that provide short-term, non-collateralized loans (payday loans) and fee-based credit services to customers seeking loans (signature loans).

At June 30, 2007, EZCORP was providing pawn loans at 295 U.S. and three Mexican EZPAWN locations and payday loans at 390 EZMONEY and 80 EZPAWN locations. In the nine months ended June 30, EZCORP’s revenues grew 17% year-over-year to $268 million and net earnings jumped 33% to $26.7 million, or $0.62 per share, from $20.1 million, or $0.48 per share, in the same period one year ago. The company’s management is forecasting a 28% increase in full-year 2007 earnings.