You seem knowledgeable about EZPW.
Could you summarize this situation?
I know about the two different share classes, and that it gives him prety much absolute control of the board. But don't board members have fiduciary responsibilities that they are required to meet?
Also, I recall hearing that there was some sort of "consulting agreement" that allowed him to siphon off an ongoing stream of fees. Can you remind us all about that?
Free cash flow is north of $300 million by a tad, meaning the FCF Yield is aver 11%.
2.4% of it comes as a dividend; The company is buying back stock.
Eventually, it won;t trade for 10x earnings.
The company could garner about $600 million from selling company owned stores to franchisees without sacrificing much in the way of EBITDA, provising the means to shrink the share count even faster and goosing eps growth.
Aside from a few bogus lawsuits, flattish overall revenue growth and declining same store sales, what's not to like?
past history seems to contradict your argument, I think.
What is different about that situation since the last time the stock was 25, or 20, or 15, or 10?
I have a position in EZPW.
After restating some financials, tangible book value is about $7.35/share. Stock is $5.75.
Wells Fargo thinks they made $1.14 in the FY ended 9/30, but we're waiting on the full-year numbers.
There is a fair amount of uncertainty and an unfavorable share voting structure. But ut us interesting nonetheless.
Absent the uncertainties it probably wouldn't be cheap. I'm looking for $8 within 9 months, so almost 50% upside.
its a pawn shop chain with a Mexican subsidiary.
Wells Fargo's equity analyst recently published on EZPW
He has a price target of $5-$6.
He also thinks year's end book value will be more than $7 per share.
He estimates FY2015 e.p.s. (I believe this is excluding charges to shut down the payday lending business) of $1.14 per share.
He believes the stock should trad in a range of 5x to 6x earnings.
In my opinion, he is off his rocker.
If the company is earnings $1 per share, and has a book value of $7 per share, there is NO WAY the stock should sell for less than $8, and a price target range of $8-$9 seems entirely reasonable to me.
With the stock at $5.70, it has 25%-40% upside, in my view, over the coming year, as the company demonstrates its earnings power in its current configuration.
This seems to fall under the category of
"Fool me once, shame on you;
Fool me twice, shame on me."
Grow up and be responsible for your own investing.
If you "know the pattern" you should be taking advantage of it in your trading
instead of whining about how unfair life us.
Give us a break.
Auto production in China has reached 24 million per year.
Few are replacement vehicles so the "fleet" of autos in China is growing rapidly.
In the US it is 18 million and most are "replacement" vehicles.
Figure what all that does for global oil demand.
The thing I can't figure out is what took Carl so long to get involved here.
This one has been begging for him for quite a while.
The CEO has already done some of his work for him by buying back about
300 million shares over the past 3 years or so. The share count used to be around 1.3 billion,
now it is only 3 billion.
Frankly, a company with a strong brand name with on the order of $1.3 billion of annual free cash flow should NOT be selling for a $10 billion equity market cap.
There is a pretty easy fix here:
1) Sell the financing business and get around $4 billion of its debt off the balance sheet. Maybe get a few hundred million in cash for it from the buyer and use it to buy back some more stock.
With only $4 billion of remaining debt on the balance sheet, the Debt/EBITDA ratio will be only 2.0x.
Given the FCF generation capability, the company can EASILY borrow another 4 billion, bringing it up to 4x Debt/EBITDA. and they can buy back another 35% of the float with that.
You keep the rating agencies at bay by telling them the intention is to use the FCF to reduce the debt within 18 months by about $2 billion, bringing Debt/EBITDA to around 3x, leaving the company still IG rated.
2) You can make a decision about how you are going to allocate cash flow.
The company is using $300 million annually for dividends, targeting $500 million for M&A, and using the rest for buybacks.
Here's the problem:
1) Nobody is buying the stock for its yield. Can the dividend.
2) The M&A deals that they have done don't seem to have had any impact on results/performance.
Their impact is invisible. Stop doing M&A deals.
3) Focus the use of cash flow into a single channel: buybacks.
$1.3 billion of Free cash flow on 1 billion shares is $1.30 per share.
If you get the share count down to 600 million shares, that $1.3 billion of FCF is $2/share.
At the current FCF Yield of around 13%, buying back 40% of the stock will give us about a 65% boost in the share price.
They did it because they need to do options trading to supplement their incomes as government drones.
I really like how you support your argument with facts and reasoning.
I guess fitness is just a "fad."
You are assuming that the pipeline is not maintained.
Just because it has a 30-year life for depreciation/tax purposes, does not mean it has a useful life of 30 years.
And of course, since the asset IS depreciated over time, that depreciation represents cash flow that is in addition to the earnings of the pipeline.
There is no "emergency."
Are business conditions a bit uncomfortable right now?
They business is largely not based on commodity prices (outside the 18% of the CO2 segment which itself is largely hedged through next year and even into 2017), and they will deliver projects into service over the course of the coming year that will lead to continued growth in EBITDa and Cash Flow in absolute terms, though maybe not at as great a rate when measured in per share terms.
The dividend paid a year from now WILL be higher than the one most recently paid.