DFC Global Corp.
) is set to report fiscal second-quarter 2014 (ending Dec 30,
2013) results on Jan 30, 2014. Last quarter, it posted a 23.8%
positive surprise. Let's see how things are shaping up for this
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Growth Factors this Past Quarter
Regulatory activities, including regulatory advisory costs, legal
opinions and analyses, and audit and regulatory compliance costs
are expected to aggravate total expense, which has already been
witnessing an escalation. The company expects to incur expenses
in the range of $10.0 million to $15.0 million in fiscal 2014.
Due to new loan rollover limitations (three loan rollovers per
customer), DFC Global tightened the lending-underwriting norms,
which will again weigh on loan growth in the U.K.
Our proven model conclusively shows that DFC Global is likely to
miss earnings this quarter. That is because we caution against
stocks with a combination of a negative
(Expected Surprise Prediction) and a Zacks Rank #4 or 5.
Negative Zacks ESP
: That is because the Most Accurate estimate is at 15 cents
while the Zacks Consensus Estimate is higher at 19 cents. That
leads to a difference of -21.05%.
: DFC Global carries a Zacks Rank #4 (Sell). Stocks with a
Zacks Rank #4 and #5 have a significantly higher chance of
DFC Global's combination of a Zacks Rank #4 and an Earnings ESP
of -21.05% makes us apprehensive of an earnings miss by the
company on Jan 30.
Stocks to Consider
Here are some companies you may want to consider, as our model
shows they have the right combination of elements to post an
earnings beat this quarter:
), earnings ESP of +1.3% and a Zacks Rank #2 (Buy).
Main Street Capital Corporation
), earnings ESP of +1.85% and a Zacks Rank #2.
Hercules Technology Growth Capital, Inc
), earnings ESP of +9.68% and a Zacks Rank #3 (Hold).