Cash America International (CSH) is Defense for your Portfolio

Investing sucks.  But not with Cash America International, Inc. (Public, NYSE:CSH), America's largest pawn shop and payday loan service operator stock is up 41% in the last 3 months. 

Cash America may be one of the last 'safe stocks' these days headed into a gloomy and unpredictable 2008.

How can you not love this 3 Month chart?

Cash America International Earnings Conference Call (Q1 2008), is coming up on Thu, Apr 24, 2008.

CSH said back on March 31st it may change its cash lending product offering in Florida to an alternative cash advance product, following a regulatory review of a similar product of its competitor.  The regulators were reviewing Ezcorp Inc's (EZPW) credit services organization (CSO) product and could come out with some recommendations, Roth Capital Partners analyst Elizabeth Pierce said.

Cash America said it did not expect the change in the product offering to affect its 2008 earnings-per-share outlook.  But if it does, that's a great buy opportunity Masters.

The news couldn't come at a better time for investors standing on the side line. Cash America is very confident about their business and raised first-quarter earnings. CSH forecast quarterly earnings of 80 cents to 82 cents a share, up from its prior view of 70 cents to 75 cents a share. Analysts were expecting 80 cents a share.

The Street is expecting Cash America to meet its 2008 outlook, but should anything change they may need to take a payday loan themselves.

Even if CSH has a stellar conference call, playing this stock is still a good idea as the Masters expect them to push pass their 52-week high in the next few months.

CSH is the right company and the right time, they make their money via pawn loans, short-term cash advances, and check cashing services.

U.S. citizens need them right now, and more than you think.

It's no secret Americans are strapped for cash these days and it's only going to get worse. 

Here's a fun fact:
There are 2,500 payday lenders in California, more than the number of McDonald's and Burger King outlets combined, yet virtually every one charges the maximum amount allowed by state law.

Here's some insight from Paul Leonard at the LA Times:

Payday loans are typically offered at annual percentage rates of 400%, with the entire loan amount plus accrued interest due in two short weeks, borrowers who pay back their loan are often unable meet their other obligations without taking out a new payday loan during the same pay period. This is the start of the debt trap, which can leave borrowers indebted to payday lenders for several months or years. This repeat borrowing is crucial to the payday lending business model, despite their professed desire to only meet short-term credit needs.

Masters, Cash America is going to keep raking the money in this year and next, it's just easy for them.  They run about 500 pawnshops and 300 loan outlet and they said last month that revenue has grown more rapidly and more customers have been paying their bills than expected.  How can you not believe them?

Evil as they maybe, CSH can defend your portfolio from the lashing that is coming at us everyday with falling stock prices. 

Disclaimer: The Author has no positions in CSH.