RCII

Rent-A-Center Inc

Consumer


Presented:03/11/2015
Price:$26.86
Cap:$1.42B
Current Price:$29.88
Cap:$1.63B

Presented

Date03/11/2015
Price$26.86
Market Cap$1.42B
Ent Value$2.42B
P/E Ratio14.8x
Book Value$26.22
Div Yield3.57%
Shares O/S52.90M
Ave Daily Vol740,000
Short Int9.16%

Current

Price$29.88
Market Cap$1.63B
Rent-A-Center, Inc., together with its subsidiaries, leases household durable goods to customers on a rent-to-own basis. The company operates in four segments: Core U.S., Acceptance Now, Mexico, and Franchising. It offers durable products, such as consumer electronics, appliances, computers, furniture, and accessories under rental purchase agreements. The company also provides merchandise on an installment sales basis; and offers the rent-to-own transaction to consumers who do not qualify for financing from the traditional retailer through kiosks within retailer’s locations. It operates retail installment sales stores under the Get It Now and Home Choice names; and rent-to-own and franchised rent-to-own stores under the Rent-A-Centre names. As of February 26, 2015, the company owned and operated approximately 3,170 stores in the United States, Mexico, Canada, and Puerto Rico; and approximately 1,355 Acceptance Now kiosk locations in the United States and Puerto Rico, as well as franchised approximately 180 rent-to-own stores under the Rent-A-Center, ColorTyme, and RimTyme trade names. Rent-A-Center, Inc. was founded in 1986 and is headquartered in Plano, Texas.

Publicly traded companies mentioned herein: Conn’s Inc (CONN), hhgregg Inc (HHG), Rent-A-Center, Inc. (RCII), Sears Holdings Corp (SHLD)

Highlights

The presenter is short shares of Rent-A-Center (RCII) and thinks the risk/ reward remains favorable for bears in the high $20s. Shares have declined from the mid-$30s year-to-date, but deflation should continue to pressure the company's traditional rental business, and he believes expectations for Acceptance Now and smart phone rentals may be too optimistic. With 2,800 physical stores and a growth plan that he thinks could fall well short of expectations it is difficult for him to see how RCII’s current business model is sustainable.

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Idea Discussion

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