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$$$MR. MARKET$$$ Loves WRLD
by: mr_market63 (43/M)
Long-Term Sentiment: Strong Buy 06/03/03 12:05 pm
Msg: 478 of 645
We are the world, we are the children…….I feel like hugging a tree
today. Why, I want World Acceptance. Yea..that's it…I want to buy a
stock today called World Acceptance. Has a nice ring to it.
Today I bought WRLD at 14.43. I will sell it in 4 to 6 weeks at
16.75. Here's why I like WRLD:
World Acceptance Corp. (WRLD) is in the small loan consumer finance
business, offering short-term small loans, medium-term larger loans,
related credit insurance and ancillary products and services to
individuals. It generally offers standardized installment loans of
$130 to $3,000, and generally serves individuals with limited access
to other sources of consumer credit from banks, savings and loans,
other consumer finance businesses and credit cards. Once again we
see the cash machine model in this low low interest rate
environment. The priviledged have access to cheap money. The less
than priviledged want more money. Borrow money on the cheap, lend at
a fair price and hedge your bets. Looks like a winner to me.
WRLD's stock is up 124% over the last 12 months. It still only
sports a P/E of 11.30. Over the last 6 months, it's r^2 correlation
coefficient is a solid 0.80 in a time series regression. Nice
momentum.
The company says its earnings potential has accelerated as a result
of an increase in loans stemming from strong internal growth and
contributions from new offices and acquisitions. WRLD opened or
acquired 33 offices in FY 03 (Mar.), and four nonperforming offices
were closed, giving the company a total of 470 offices at March 31,
2003. The company's loan loss ratio improved in the fourth quarter
of FY 03, to 14.6%, from 15.4% in the year-earlier period. So while
WRLD is growing its market share, it's risk profile is actually
decreasing…..NICE!
Revenues have grown at a steady eddy 15% clip for the last 3 years
while earnings have grown similarly at a rate of 23% per year. This
is great fuel for a momentum play. $$$MR. MARKET$$$ predicts next
year's earnings to come in at $1.53 (First Call estimates $1.47).
Even at the paltry P/E of 11.30 that Wall Street offers to WRLD
shareholders, this would put the stock price at a handsome
$17.29/share which is well past my target.
WRLD believes virtually all participants in the small-loan consumer
finance industry charge the maximum rates permitted under applicable
state laws. This means no price cutting…yippee!
The average originated loan size and term were about $647 and nine
months, respectively, in FY 02. At the end of FY 02, the annual
percentage rates on loans offered ranged from 24% to 214%, depending
on the loan size, maturity and the state in which the loan was made.
In certain states, the company also sells credit insurance in
connection with its loans. Excuse me while I cough up my breakfast.
214% loans? Hey… looks like a good spread to me.
Return on Equity is 21% vs S&P 500 average of 8.3%. Return on assets
is 10.2%. Debt / Equity ratio is a very safe 1.30 vs 2.90 for the
Industry averages. This is healthy stuff.
Neither a borrower or a lender be……this may be true, but there's
nothing wrong in owning stock in this company for a few weeks.
I am HUGE!!
Bring me your finest meats and cheeses!
$$$MR. MARKET$$$
by: mr_market63 (43/M)
Long-Term Sentiment: Strong Buy 06/03/03 12:05 pm
Msg: 478 of 645
We are the world, we are the children…….I feel like hugging a tree
today. Why, I want World Acceptance. Yea..that's it…I want to buy a
stock today called World Acceptance. Has a nice ring to it.
Today I bought WRLD at 14.43. I will sell it in 4 to 6 weeks at
16.75. Here's why I like WRLD:
World Acceptance Corp. (WRLD) is in the small loan consumer finance
business, offering short-term small loans, medium-term larger loans,
related credit insurance and ancillary products and services to
individuals. It generally offers standardized installment loans of
$130 to $3,000, and generally serves individuals with limited access
to other sources of consumer credit from banks, savings and loans,
other consumer finance businesses and credit cards. Once again we
see the cash machine model in this low low interest rate
environment. The priviledged have access to cheap money. The less
than priviledged want more money. Borrow money on the cheap, lend at
a fair price and hedge your bets. Looks like a winner to me.
WRLD's stock is up 124% over the last 12 months. It still only
sports a P/E of 11.30. Over the last 6 months, it's r^2 correlation
coefficient is a solid 0.80 in a time series regression. Nice
momentum.
The company says its earnings potential has accelerated as a result
of an increase in loans stemming from strong internal growth and
contributions from new offices and acquisitions. WRLD opened or
acquired 33 offices in FY 03 (Mar.), and four nonperforming offices
were closed, giving the company a total of 470 offices at March 31,
2003. The company's loan loss ratio improved in the fourth quarter
of FY 03, to 14.6%, from 15.4% in the year-earlier period. So while
WRLD is growing its market share, it's risk profile is actually
decreasing…..NICE!
Revenues have grown at a steady eddy 15% clip for the last 3 years
while earnings have grown similarly at a rate of 23% per year. This
is great fuel for a momentum play. $$$MR. MARKET$$$ predicts next
year's earnings to come in at $1.53 (First Call estimates $1.47).
Even at the paltry P/E of 11.30 that Wall Street offers to WRLD
shareholders, this would put the stock price at a handsome
$17.29/share which is well past my target.
WRLD believes virtually all participants in the small-loan consumer
finance industry charge the maximum rates permitted under applicable
state laws. This means no price cutting…yippee!
The average originated loan size and term were about $647 and nine
months, respectively, in FY 02. At the end of FY 02, the annual
percentage rates on loans offered ranged from 24% to 214%, depending
on the loan size, maturity and the state in which the loan was made.
In certain states, the company also sells credit insurance in
connection with its loans. Excuse me while I cough up my breakfast.
214% loans? Hey… looks like a good spread to me.
Return on Equity is 21% vs S&P 500 average of 8.3%. Return on assets
is 10.2%. Debt / Equity ratio is a very safe 1.30 vs 2.90 for the
Industry averages. This is healthy stuff.
Neither a borrower or a lender be……this may be true, but there's
nothing wrong in owning stock in this company for a few weeks.
I am HUGE!!
Bring me your finest meats and cheeses!
$$$MR. MARKET$$$
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