Will FirstCash Holdings (FCFS) be Able to Generate Strong Growth?

2 months ago 21

Soumya Eswaran

Thu, Apr 17, 2025, 8:03 AM 3 min read

Fiduciary Management Inc. (FMI), an autarkic wealth absorption firm, released its first-quarter 2025 capitalist letter. A transcript of the missive tin beryllium downloaded here. US banal markets experienced a diminution successful Q1 owed to changing commercialized policies and skepticism astir AI, with the S&P 500 Index and Russell 2000 Index falling 4.27% and 9.48%, respectively. Consumer assurance fell to a 12-year debased amid uncertainty. International banal markets performed better. Value equities are outperforming the maturation banal truthful acold successful 2025, which is encouraging. All the FMI portfolios person an progressive stock supra 90%. The firm’s absorption is to find the champion opportunities, and it has successfully executed a disciplined, value-oriented process for implicit 45 years. In addition, delight cheque the fund’s apical 5 holdings to cognize its champion picks successful 2025.

In its first-quarter 2025 capitalist letter, Fiduciary Management Inc. highlighted stocks specified arsenic FirstCash Holdings, Inc. (NASDAQ:FCFS). Headquartered successful Fort Worth, Texas, FirstCash Holdings, Inc. (NASDAQ:FCFS) is simply a retail pawn store operator. The one-month instrumentality of FirstCash Holdings, Inc. (NASDAQ:FCFS) was 1.61%, and its shares mislaid 7.39% of their worth implicit the past 52 weeks. On April 16, 2025, FirstCash Holdings, Inc. (NASDAQ:FCFS) banal closed astatine $120.06 per stock with a marketplace capitalization of $5.37 billion.

Fiduciary Management Inc. stated the pursuing regarding FirstCash Holdings, Inc. (NASDAQ:FCFS) successful its Q1 2025 capitalist letter:

"FirstCash Holdings, Inc. (NASDAQ:FCFS) is 1 of the largest pawn operators successful the satellite with astir 3,000 full stores. We similar the pawn concern due to the fact that it’s a defensive, needs-based business. Pawn request typically strengthens arsenic economical enactment declines, which is an property not shared by galore businesses. Pawn loans are besides tiny successful size, person abbreviated maturities, and are afloat collateralized astatine charismatic loan-to-values, making them precise low-risk loans. Many states person adopted regulations that marque it hard to unfastened caller pawn stores, which insulates incumbent players from caller competition. This leads to charismatic returns connected invested superior for manufacture participants. FirstCash has been a consolidator wrong the fragmented pawn manufacture successful some the U.S. and Mexico. We expect this to continue. Therefore, adjacent though it’s been a favorable microeconomic situation for pawn operators, we judge the institution should beryllium capable to make beardown maturation implicit the mid-to-long term. The shares are trading astatine comparatively undemanding mid-teens net multiple."

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