Cash America (CSH) keeps moving, go Pawn Shops

Back in April I talked up Cash America International (NYSE:CSH) because with the market on edge and American's strapped for cash, it just made sense. America's largest pawn shop and payday loan service is on fire today after raising Q2 estimates.  There's no reason why the trend can't continue.

This stock was a defensive play in April and still is in July.  Shares of CSH are up 15% today after raising their Q2 08 earnings outlook above analyst estimates on higher revenue from its pawn business and lower-than-anticipated loan losses from its online cash advance product.

Cash America now expects to earn between 62 cents to 64 cents a share, compared with its previously guided range of 51 cents to 54 cents a share.

Analysts on average were expecting 51 cents a share, before special items, according to Reuters Estimates.

Cash America said its pawn lending business contributed to better results, as revenue from pawn loans exceeded expectations.  Go figure, American's are hitting the pawn shops more and more just to get by.  $4 Gas and a shrinking U.S. dollar is hitting home.

The National Pawnbrokers Association said the number of pawnshops has nearly doubled from 6,900 in 1988 to 13,000 in 2008, the Hartford (Conn.) Courant reported last week.

Cash America will release second-quarter results on July 24 before the market opens, it said.

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The company said it does not see any expenses from discontinued operations in Ohio in the revised estimates. Earlier in May it said it could close up to 139 cash advance lending locations in Ohio due to a change in the Ohio statutes.

However, Cash America said it continues to evaluate the alternatives in connection with its activities in Ohio and expects additional related expenses.

During the second quarter, the company completed its previously announced closure of 12 lending locations in California and Texas, and has included related costs in the estimated results, it said.

Fellow Masters, CSH has room to move, expect the analysts covering the stock to re-think their price targets.

DISCLIAMER: No positions in CSH

SOURCE: Reuters.com