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9 Consumer Finance Stock Plays From eBay to Capital One

9. Alliance Data Systems
Shares of Alliance Data Systems (ADS) of Plano, Texas, closed at $142.07 Thursday, returning 37% year-to-date, following a 46% return during 2011.

The shares trade for 14.5 times the consensus 2013 earnings estimate of $9.81, among analysts polled by Thomson Reuters.

Sakhrani's price target of $156 implies 10% upside potential for ADS.

The consensus estimate is for the private label credit card lender, payment processor and rewards program administrator to report third-quarter earnings of $2.21 a share (excluding options expenses), increasing from $2.13 in the second quarter, and $2.16 during the third quarter of 2011.

Sakhrani expects Alliance Data Systems to report third-quarter operating earnings of $2.29 a share, with full-year EPS estimates of $8.54 for 2012 and $10.18 for 2013.

The analyst said that "ADS has seen strong momentum in the portfolio growth front following the acquisitions of the Pier 1 portfolio, the Bon-Ton portfolio, and most recently the Talbots portfolio," and that "while accretion to EPS from these acquisitions may not likely occur until 2013 due to the fair value accounting treatments of the acquired portfolios, we believe the steps have been a positive for the company and will help to achieve its stated goal of 20% yr/yr receivables growth in 2012."

ADS Chart ADS data by YCharts

Interested in more on Alliance Data Systems? See TheStreet Ratings' report card for this stock.

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