EZCORP, Inc. is a provider of pawn loans in the United States and Latin America. At its pawn stores, it advances cash against the value of collateralised tangible personal property and sells merchandise to customers looking for good value. The merchandise it sells primarily consists of second-hand collateral forfeited from its pawn activities or merchandise purchased from customers.
Technically, the price is close to the lower range of an inclining channel pattern, which makes for an attractive investment opportunity (see black parallel trendlines).
The pattern is formed when the price approaches the lower trendline of the channel and shows signs of bouncing off it. This is considered a bullish continuation pattern.
The presence of an upward-sloping lower trendline implies that buyers are consistently willing to step in and support the price at higher levels. This indicates bullish sentiment and suggests that there is buying interest even when the price dips to the lower end of the channel.
The stock is trading below is 200-day simple moving average (SMA) of $8.66. A green Heikin-Ashi candle supports a bullish trend direction on the weekly time interval.
Fading downside momentum, according to the MACD histogram, and the recent sideways trajectory of the On-Balance Volume (OBV) indicator, offers further support for the bullish sentiment.
Share Information
| Share code | EZPW |
|---|---|
| Industry | Financial Services |
| Market Capital (USD) | 0.46 billion |
| One Year Total Return | 2.35% |
| Return Year-to-date | 1.60% |
| Current Price (USD) | 8.28 |
| 52 Week High (USD) | 10.68 |
| 52 Week Low (USD) | 7.05 |
| Financial Year End | September |
| Several technical indicators confirm a bullish bias. It is expected that the stock price will experience moderate-price fluctuations. |
Consensus expectations
(Bloomberg)
| FY23 | FY24E | FY25E | FY26E | |
|---|---|---|---|---|
| Headline Earnings per Share (USD) | 0.75 | 0.75 | 0.87 | 1.09 |
| Growth (%) | 0.40 | 15.94 | 24.86 | |
| Dividend Per Share (USD) | 0.00 | 1.21 | 1.33 | - |
| Growth (%) | - | 9.92 | - | |
| Forward PE (times) | 11.00 | 9.48 | 7.60 | |
| Forward Dividend Yield (%) | 14.61 | 16.06 | - | |
| Solid earnings growth is expected from FY24 onwards. The stock holds a Beta of 0.75, which indicates that it is slightly less volatile than the S&P 500 index. | ||||
Buy/Sell Rationale
Technical Analysis:
Long-term fundamental view:
| Share Name and position | FHI - Stop-loss (Close the position) |
BTAL - Buy (Continue to hold) |
CNC - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 34.22 | 19.20 | 66.44 |
| Current | 32.54 | 20.22 | 68.24 |
| Movement | -4.9% | 5.3% | 2.7% |
| The stock breached our stop-loss level, leading us to close the position. |
The development of a falling wedge pattern remains of interest. The stock is testing its 200-day simple moving average, with upside momentum supportive of the trade idea.
Our profit target is $21 with a stop-loss of $19.50. Exit the position on 13 December 2023. |
The stock remains above key support levels and is testing its 200-day simple moving average. Upside momentum remains supportive.
Our profit target is $76 with a trailing stop-loss of $64.60. Exit the position on 30 November 2023. |
| Share Name and position | UNH - Buy (Continue to hold) |
STRA - Buy (Continue to hold) |
IEX - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 505.45 | 76.64 | 212.62 |
| Current | 509.47 | 75.77 | 206.94 |
| Movement | 0.8% | -1.1% | -2.7% |
|
The price is stable and remains of interest. Trading above its 200-day simple moving average. Upside momentum supports the trade idea.
Our profit target is $560 with a trailing stop-loss of $490. Exit the position on 3 January 2024. |
The price appears to be in the accumulation phase of the stock market cycle and remains of interest. Trading below its 200-day simple moving average. Fading upside momentum remains a concern.
Our profit target is $85 with a trailing stop-loss of $72.35. Exit the position on 22 November 2023. |
The price remains above key support. Currently below its 200-day simple moving average. Downside price momentum is a concern.
Our profit target is $240 with a trailing stop-loss of $202.80. Exit the position on 20 October 2023. |
