PennyOmega.com Stock Report!

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Wednesday August 19, 2009

PennyOmega.com Stock Report!

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TechTeam Global, Inc., (Nasdaq: TEAM) today announced that it has been named No. 1 globally in help desk outsourcing across both Tier 1 and Mid Tier customers in the Black Book of Outsourcing 2009 Survey on Top Infrastructure Management Outsourcing Vendors. Across the broader scope of information technology (IT) infrastructure outsourcing, TechTeam was named the No. 1 vendor globally for Mid Tier customers. The report classifies Tier 1 customers as organizations with revenues greater than $1 billion and Mid Tier customers as organizations with revenues between $500 million and $1 billion.

The Hartford Financial Services Group, Inc. (NYSE: HIG), in

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Rent A Center, Inc. (...

Rent A Center, Inc. (...

Aaron’s Inc (NYSE: AAN): Stock of the Day

Alexander Wissel, Editor in Chief, Investment U

Renting Becomes Fashionable… Or Not?

After the bell yesterday, we had a double whammy on earnings surprises.

Both Aaron’s Inc (NYSE: AAN) and Rent-a-Center (Nasdaq: RCII) reported upside surprises… but the end result couldn’t be more different.

Aaron’s reported EPS of $0.65 versus an expected $0.52 percent, a 25% surprise.

It appears as though Aaron’s 1,577 total locations has found new cash-strapped consumers looking to rent or lease rather than purchase home furnishings. Revenues increased 15% for the first quarter, year-over-year.

So did the same happen at Rent-A-Center? Yes… kind of.

Rent-A-Center checked in with $0.65 per share, 20% over the expected $0.54.

But the EPS surprise came from some cost cutting measures that improved margins, not from revenue growth.

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Avis Budget (NYSE:CAR) and Rental Agencies All Fall Travel volume has dropped along with consumer spending and consumer sentiment over the past several months. And Avis Budget Group suffered from the decline in travel losing $1 billion dollars and having to cut 700 jobs in the most recent quarter preliminarily reported last night. Revised Outlook The company now expects to see ...

My latest column is up at RealMoney.

I usually want a stock to score highly in four out of five categories before giving it much consideration: earnings momentum, earnings quality, price momentum, free cash flow and return potential.

This week, only three stocks went four for five, and I’ve talked about them all before: W&T Offshore (WTI) , Pitney Bowes (PBI) and Rent-a-Center (RCII) . As I look for new investment ideas, I’m left with three options, each of which has significant drawbacks.

Go short Change strategy Stay on the sidelines

I seldom

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My latest column is up at RealMoney.

I think Rent-A-Center (RCII) can benefit from the slowdown in consumer spending and the tightening of credit standards.

If Rent-A-Center were to receive the same price-to-book multiple as Aaron Rents, it could trade above $28 per share today. While I don’t believe that will happen overnight, over the next five years Rent-A-Center could see high-single-digit earnings per share growth and also expand its price-to-book multiple to the 1.9 level. The combination of earnings growth and valuation expansion could generate annual returns averaging 15% or more.

Here’s how the company scores on the Stock Market Beat models:

Earnings momentum: Positive Earnings quality: Positive Price momentum: Neutral Free cash flow: Positive Return potential: Positive

Disclosure: At time of publication, William Trent has no financial position in the companies mentioned in this article.

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