DFC Global (DLLR)
Company Profile: Formerly known as Dollar Financial, DFC Global offers financial services to unbanked and under-banked consumers and small business owners, many of whom receive income on an irregular basis or from multiple employers.Share Price: $18.87 (Dec. 6) 2011 Return: -1.2% Investment Thesis: William Blair analysts don't mince words when talking about DFC Global; They argue the market opportunity is "significant" and that business trends are strong and accelerating in the U.K. and Europe and remain solid in U.S. and Canada. "We believe DFC is well positioned to provide alternative financial services to the 2.5 billion underserved/underbanked consumers worldwide (about 60 million in the United States) given its diverse product offering, geographic diversity, and strong balance sheet," the analysts write. They add that DFC's recent acquisitions provide platforms for growth. "We believe DFC's acquisition pipeline remains active and that DFC will focus primarily on using its recent U.K. and Scandinavian pawn acquisitions as platforms for expansion in existing and adjacent European markets," they add. Shares of DFC have fallen hard in recent weeks due to regulatory concerns in the U.K., although William Blair analysts say the selloff is overdone. "A November 2011 review published by HM Treasury increases our conviction that the U.K. government wants to make sure consumers have access to high cost loans with proper disclosures," they add.
Crawford & Co. (CRD.B) Company Profile: Crawford & Co. is the world's largest independent provider of claims management solutions to insurance companies and self-insured entities. Share Price: $5.87 (Dec. 6) 2011 Return: 72.7% Investment Thesis: William Blair analysts argue that Crawford "is a classic example of an underutilized marquee franchise." "Jeffrey Bowman, CEO since 2008, has a track record of success at the company, turning the international [property and casualty insurance] segment into a profit driver for the firm," the analysts write. "We believe that current management has the ability to significantly turn the company around." The analysts say the company should benefit from improving claims trends and that a return to secular growth is possible over the next several years. They also argue there is potential for significant upside to 2012 estimates thanks to the potential for a faster rebound in Broadspire.
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