Jefferies & Company Reports on Consumer Finance

Jefferies & Company commented on consumer finance companies in a report released today. Jefferies commented on Cash America CSH, First Cash Financial FCFS, and Dollar Financial Group DFG and was positive on the industry. Jefferies writes, "Yesterday the Texas Senate passed two Payday bills, largely as expected. Despite passage, Texas legislators punted any meaningful reform to the next session in 2 years, as votes could not be found for bills with limits on fees and/or refinancing. We believe CSH is the biggest beneficiary with the most payday exposure in the state and that the industry will likely turn focus to Consumer Financial Protection Bureau (CFPB) next." On Cash America, Jefferies writes, "Has 249 storefronts in Texas, and we estimate nearly 73% of its 901 domestic locations offer payday loans. Payday lending accounts for roughly 40% of CSH revenues and we would expect to see valuation multiples react positively as some of the regulatory risk is removed from the stock." On First Cash Financial, Jefferies writes, "Has 80 Payday stores in Texas, and derives approximately 11% of its total revenues from payday. While FCFS is more focused on its pawn book, we would expect the stock to benefit slightly from the reduced regulatory overhang." On Dollar Financial Group, Jefferies writes, "Texas is not a focus for the company. We expect no meaningful impact from the news." Shares of CSH closed on Monday at $49.46. Shares of FCFS closed at $38.37. Shares of DFG closed at $28.28.