- There's a small segment of the retail space that's suddenly doing very well, according to Utendahl Capital Partners analyst Daniel O'Sullivan. It's the pawnshop business. He has several recommendations for investors.
- "Given the current tough economic times for the consumer, people are looking for reasonably-priced merchandise -- TVs, computers, electronics -- so that's really driven growth for them," O'Sullivan told CNBC. "Plus, we saw a benefit this quarter, too, with the economic stimulus checks helping out the pawn companies."
- He also notes that much of the inventory in pawnshops is in jewelry, which has gained greatly in value from soaring gold prices.
- His favorite pawnshop company is EZCorp [EZPW 18.42
0.53 (+2.96%) 
]. "They are in the process of closing on an acquisition of privately held Value Pawn," he said, "I think that's going to add about $125 million in revenue next year...the company's done a wonderful job of moving into the Mexican pawn market." - Other companies in the space on his list are Cash America [CSH 43.79
-0.73 (-1.64%) ] and First Cash Financial Services [FCFS 19.22 0.06 (+0.31%) ].
[Jul 24: Cash America (CSH) and EZCORP (EZPW) Both Report Today - Starting Small Stake in EZCORP]
[Jul 10: Another Payday Loan/Pawn Shop Breaks Out on Higher Guidance - A Trend Seems to be Afoot]
[Jul 7: Missed Opportunity in Cash America]
Long EZCORP in fund and personal account
