Investors and consumers will always have a need for cash on short notice.
The allure to consumers is that the money is easy to access; the appeal to investors in this sector is that the money is not cheap.
The need for readily available capital is global. Cash America is based in Fort Worth, Texas. IEG Holdings got its start in Australia and now does business in America; it aims to offer loans in 33 states by the end of 2014. First Cash Financial Services has extensive operations in Mexico and the United States.
Wall Street is very bullish on this sector.
During The Great Recession, business boomed for these lenders. Traditional credit dried up as financial institutions hunkered down, due to the adverse economic conditions. The lack of standard credit allowed these firms to expand their customer base.
And their expansion has continued throughout the economic recovery. Earnings growth for First Financial Services is in the double digits for the quarter; growth is also projected to be in the double digits for the next half decade. For this year, earnings growth is nearly 40 percent for Cash America. In less than a year, the online lending program of IEG Holdings has increased more than 300 percent.
Numbers like those attract the attention of the investment community. Cash America is up nearly 20 percent for 2014. Over the last month of market action, First Cash has risen by nearly six percent. Based on analyst target prices, there is still much growth ahead for the sector.
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