Opinions
David Driscoll
First Cash Financial Services
FCFS-N
TOP PICK
Dec 07, 2018
They own pawn stores in America, Mexico and now Colombia . They do well when the economy weakens and trade a lot in gold jewllery. As the US dollar falls and price rises, he'd rather own this than gold or a gold ETF. Dividend has been rising 15% yearly. (Analysts’ price target is $94.14)
$81.230
Stock price when the opinion was issued
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BUY
It's up 43% year to date. They're the biggest operator of 2,400 pawn stores in the US and into Latin America. If the world blows up, you want to be in gold--and people bring in their gold to these stores. It's a way of getting gold expsoure but also a yield. Their dividend is growing., 17% last year. Return on invested capital is 12%.
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PAST TOP PICK
(A Top Pick Dec 07/18, Down 1%) Not a bad return, given what's happening in Latin American markets this year. FCFS runs American pawn shops, as well as in Mexico and South America. They grow at 5% organically; dividend rising 10-15%. But nobody wants to invest in Latin American which holds back this stock. A plus: it isn't correlated to US banks. They also benefit from the rising gold price, since people pawn gold a lot. This is how he invests in gold.
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BUY
It's part of the S&P500 midcap so it moves in tandem with it. They had a very good quarter and their Latin American operations continue to grow. Retail sales and pawn fees have been rising. If they receive more jewellery, and the USD goes down and gold prices go out, they might be a beneficiary. They have owned it for 5 years and will continue to own it.
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