"The Echo"
1. EZPW (EZCorp $17.98)
Location: Austin, TX
WSB Rank: #1
Industry: Credit Services
Market Cap: $885mil
Cash: $14.9mil
Fundamentals of Note:
P/E = 10.0 F/PE = 8.1 P/CF = 8.6 D/E = 0.06 EV/EBITDA = 6.2
5yr Sales Growth = 21.3%
5yr Income Growth = 49.7%
Gross Margin = 60.9%
Net Margin = 12.9%
Current Ratio = 4.5 Quick Ratio = 3.5 Leverage Ratio = 1.2
RoE = 20.5% RoA = 17.3% RoC = 19.3%
BeanScreen Breakdown: Overall fundamentals are very strong, with valuations attractive here as well. Recently named one of Fortune's fastest growing companies, growth rates are steady and long term rate trends look strong. Profit margins are solid and outpacing industry averages by a wide spread. Financial condition is in great shape with little debt and overall healthy balance sheet. Investment returns have been outstanding over near and long term time frames. Management efficiency is strong and insider ownership is at 22.9%. One hurdle EZCorp may have to face in the future is stricter government regulation on payday loan companies. To counter this, EZCorp is expanding its international presence through investments and acquisitions, as well as opening and buying more pawn shops.
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2. TRLG (True Religion $17.54)
Location: Vernon, CA
WSB Rank: #2
Industry: Textile - Apparel Clothing
Market Cap: $447mil
Cash: $123mil
Fundamentals of Note:
P/E = 10.2 FP/E = 7.3 P/S = 1.4 P/CF = 8.8 PEG5yr = 0.4
5yr Sales Growth = 62.2%
5yr Income Growth = 65.3%
Gross Margin = 64%
Net Margin = 13.3%
Leverage Ratio = 1.2 Quick Ratio = 7.1 Current Ratio = 8.8
Enterprise Value/Revenue = 1.0 EV/EBITDA = 4.1
RoE = 23.5% RoA = 20.1% RoC = 22.3%
BeanScreen Breakdown: Overall fundamentals are very strong and valuations are attractive, especially when compared to industry averages. Recent growth rates are weak, but longer term trends remain healthy. In their latest earnings report, the company noted that net income fell because costs rose faster than revenues in 2Q, but this was due in part to its international expansion into cities such as Tokyo and London. Profit margins remain impressive and are outpacing all industry averages that we screen against. Financial condition is very strong (debt/equity ratio is 0). Investment returns are very impressive over the near and long term and blowing away all industry averages. A possible headwind for this high-end retailer going forward is the cautious outlook many consumers still have on the overall economy and unemployment.
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3. INTC (Intel $17.67)
Location: Santa Clara, CA
WSB Rank: #47
Industry: Semiconductor - Broadline
Market Cap: $98.4bil
Cash: $18.3bil (does not reflect recent McAfee & Infineon acquisitions)
Fundamentals of Note:
P/E = 11 FP/E = 9 P/S = 2.5 PEG5yr = 0.75 D/E = 0.05
Sales Growth YoY = 34.2%
5yr Dividend Growth = 28.5%
Dividend Yield = 3.4%
Gross Margin = 63.4%
Net Margin = 23.1%
Quick Ratio = 2.9 Current Ratio = 3.3 Leverage Ratio = 1.3
RoE = 22.3% RoA = 17.7% RoC = 20.6%
BeanScreen Breakdown: Overall fundamentals are strong, with valuations looking attractive here. Its recent deal with Infineon and buyout of McAfee has spooked many investors, but we believe Intel's foray into the software security and wireless arena will payoff in the long run. Their worldwide market exposure and attractive dividend should help lure back timid investors over time as these purchases mature. Recent growth rates have been good, and profit margins are holding up well and outpacing all industry averages. Financial condition remains stellar with a clean balance sheet, and recent investment returns have been solid. On the flip side, if the two recent acquisitions turn out to be duds, INTC shares could flounder for quite some time.
Our goal is not to beat the market every month with every stock pick, but to have every pick outpace the market over the years to come.
Please consult a licensed financial adviser before purchasing any stocks mentioned on this website.
