On Nov 19, we upgraded
DFC Global Corp
) to Neutral from Underperform given its continued efforts to
ramp up its operational results, particularly in loan origination
growth that has suffered due to introduction of 3 loan rollovers
per customer. This miscellaneous financial service provider
currently carries a Zacks Rank #3 (Hold).
Why the Upgrade?
DFC Global is focused on its plan to boost loan origination
growth, which was hampered due to new loan rollover limitations.
A restriction of three loan rollovers per customer and stringent
lending-underwriting norms, loan growth in UK was considerably
affected. DFC Global intends to increase awareness in the U.K.
over the next several months so as to influence loan origination
Additionally, DFC Global expects to incur expenses in the range
of $10.0 million - $15.0 million to support ongoing
regulatory-related activities, including regulatory advisory
costs, legal opinions and analysis, and audit and regulatory
compliance costs in fiscal 2014.
Nevertheless, ongoing cost savings from the business'
restructuring is expected to somewhat limit the adverse impact.
The restructuring efforts will also eventually lower operating
cost going forward.
AMER EXPRESS CO (AXP): Free Stock Analysis
DFC GLOBAL CORP (DLLR): Free Stock Analysis
EURONET WORLDWD (EEFT): Free Stock Analysis
FLEETCOR TECH (FLT): Free Stock Analysis
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DFC Global has been diversifying across geographies, besides
engaging in product diversification. It has completed several
acquisitions consistent with its objective to expand and
diversify its core retail financial services business in Canada,
the UK and the U.S. The company has radically expanded its online
presence and gained scalable technological platforms in several
markets, the United Kingdom and Finland in particular.
DFC Global remains committed to return value to its shareholders.
With 1 million shares bought back in the first quarter of fiscal
2014, the company has exhausted its 5.0 million shares repurchase
authorization. It is now authorized to buy back approximately 4.5
million additional shares under its newly authorized share
With respect to earnings performance, DFC Global reported
operating net earnings of 21 cents per share for the fiscal
first-quarter 2014 (ending Sep 30, 2013) that missed the Zacks
Consensus Estimate of 26 cents per share. Results also plunged
61% year over year. As a result, the Zacks Consensus Estimate for
fiscal 2014 moved south by 21% to 89 cents as 3 of 4 estimates
were lowered over the last 30 days. The same for fiscal 2015 also
declined by 17% as all 4 estimates moved down over the same time
Other Stocks to Consider
Better-ranked stocks in the same industry include
Euronet Worldwide Inc
FleetCor Technologies, Inc.
American Express Company
). While Euronet Worldwide and FleetCor Technologies carry a
Zacks Rank #1 (Strong Buy), American Express carries Zacks Rank