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World Acceptance Corp Loaning us some profits?

|Includes: World Acceptance Corporation (WRLD)

World Acceptance Corp provides consumer micro loans although this carries some risk the business model allows for very solid level of profitability.

Reasons why this equity looks compelling to me:

The stock trades at eight times earnings and eight times FCF.

They provide a necessary service with extremely high margins.

Management has done a good job of efficiently running the company
return on equity is above 20%
and ROIC is above 10%
Return on Assets of 13%

DCF Valuation method places fair value at 100 dollars a share less than half of the closing price.

Current revenue growth is at 13% with earnings growth around 30% giving you a Peg ratio below 1 as well.

To me this is as close to a conviction buy as you can get in a fairly valued market

Disclosure: Author Is Long Wrld

Disclosure: Author Is long WRLD