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Is FirstCash (FCFS) a Smart Long-term Buy?

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Alex Smith
·3 min read
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Heartland Value Plus Fund recently released its third-quarter investor letter – a copy of which is available for download here. The fund posted a return of -0.2% for the quarter, underperforming its benchmark, the Russell 2000 Value Index which returned 2.6% in the same quarter. You should check out Heartland's top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.

In the Q3 2020 Investor Letter, Heartland Advisors highlighted a few stocks and FirstCash Inc (NASDAQ:FCFS) is one of them. FirstCash Inc (NASDAQ:FCFS) is a leading provider of specialty consumer financial services and related retail products. Year-to-date, FirstCash Inc (NASDAQ:FCFS) stock lost 10.2% and on December 18th it had a closing price of $72.37. Here is what Heartland Advisors said:

"underweight to Financials boosted relative results. Stringent regulations and a low rate environment have created an undifferentiated landscape in the Banking industry. In response, the team continues to focus on identifying standout institutions that can benefit from management initiatives or serve untapped markets. For example, we added to our stake in First Cash Financial Services, Inc. (FCFS), a pawn store operator with locations in the U.S. and Latin America.

Shares of First Cash Financial were down as COVID-19 fears roiled the markets earlier this year. The stock has continued to languish based on concerns that additional stimulus checks will erode future demand for pawn loans. Our thesis is that unemployment will remain elevated and political compromise is unlikely before the Presidential election and thus demand for pawn loans will increase near-term."

In Q3 2020, the number of bullish hedge fund positions on FirstCash Inc (NASDAQ:FCFS) stock decreased by about 5% from the previous quarter (see the chart here), so a number of other hedge fund managers don't believe in FirstCash's growth potential. Our calculations showed that FirstCash Inc (NASDAQ:FCFS) isn't ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds' poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website:

Disclosure: None. This article is originally published at Insider Monkey.