Banking and Finance? How about a pawn shop? - PWN Message Board

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Non-Tech : Banking and Finance? How about a pawn shop? - PWN

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To: Gary Vanier who wrote (22)	9/9/1997 10:49:00 PM
From: Carl R.	of 56

Here is a bunch of data on the two companies. According to my stock reports the return on equity has been: PWN PAWN 1992 8.4% NA 1993 8.3% 5.6% 1994 8.5% 6.1% 1995 7.3% 5.8% 1996 10.2% 6.8% Profit Margin has been: PWN PAWN 1992 7.0% NA 1993 6.1% 6.3% 1994 5.9% 5.3% 1995 5.0% 3.4% 1996 5.6% 3.7% Some other numbers: PWN PAWN Sales/Emp $106641 $117899 Cash Flow $1.09/sh $.69/share EPS/Last 4 qtrs $.60 $.53 Rev Grow L5 yrs 10% 40% EPS Grow L5 yrs 2% 7% Int Coverage 3.7 NA Tangible Book Val $6.35 NMF Trailing PE (Last4) 17.9 12.7 Price/CF 9.8 9.8 Analysts covering 5 0 First Call Est 97 .66 NA F.C. Est 98 .76 NA F.C Growth Nxt 5yrs 18.0% NA You will have to reach your own conclusions as to which is the better value. I will point out that the last time I check PAWN I am sure that the sales/employee was only 85,000, so this is very interesting. I also note some big differences from your numbers in the ROE numbers for First Cash. Also, I note that you show a book value for First Cash, while I show tangible book value for them as NMF. Do they have a bunch of intangibles on the books? It seems that First Cash has grown much faster over the last 5 years, particularly in terms of revenue. Probably they have some intangibles on the books as a result of acquisitions. Cash America has consistantly had higher return on equity. Based on trailing PE, First Cash is the better value. Based on a price per cash flow, they are equivalent, and this may better represent their ability to grow in the future. I have an acquantance who has more knowledge of both companies than I do (mine just comes from the stock reports). He feels that Cash America uses more conservative accounting practices than First Cash, and therefore prefers Cash America as an investment. But both look like reasonably good values. One warning I should make though, is that many states may regulate the check cashing business that has benefited pawn shops recently, and therefore one or both take a hit in the future. Good luck, Carl

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