First Cash Financial Services, Inc. (FCFS), EZCORP Inc (EZPW): Gold Is a Headwind for Pawn Shops

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Conclusion

It’s hard to say where the price of gold is headed. Dennis Gartman of The Gartman Letter says the price of gold is headed hundreds of dollars higher. If that’s the case, there could be some relief for pawn stocks soon.

EZCORP Inc (NASDAQ:EZPW) is trading at a forward Price/Earnings (P/E) multiple of only 7.2 and it’s working to turn things around. If you’re bullish on the price of gold I would consider this a point to get into the stock.

Cash America International, Inc. (NYSE:CSH) is in a lose/lose situation between its loan and retail businesses, and e-commerce doesn’t appear to be lifting the company’s boat.

First Cash Financial Services, Inc. (NASDAQ:FCFS) is more expensive with a P/E closer to 17, but its commitment to repurchasing shares makes it more attractive. Of the three companies, I recommend First Cash.

Gerelyn Terzo has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

The article Gold Is a Headwind for Pawn Shops originally appeared on Fool.com.

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