EZPW ranked 5 on my 1-5 scale in confidence, and I will pay the price in Top 20. The company reported that it has been crushed by the gold price decline. These guys have continually denied how much exposure they have to gold, and it's much bigger than anyone could have imagined apparently. The stock will likely trade to $12.50-13 when it is all said and done. Not only are earnings imploding, but the company is reorienting its Mexican and Canadian operations by ditching older stores to create newer, larger ones and taking a $21-24mm charge.
Earnings for the second half of the year by consensus were supposed to be about $1.28. The company now expects them to be reduced by at least 0.35 (not sure why they didn't put a cap on it). Some of this is likely priced in - everyone knew falling gold would hurt earnings to some degree. At 75% of book value, the stock would trade about $13. 7 PE sounds about right here, and that should be about $12.50. A large sale by the Chairman the other day above 18, in retrospect, was a tell.
Great friggin way to start the quarter...
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