Canadian leader serves a growing market

Article Excerpt

CASH STORE FINANCIAL SERVICES INC. $16.54 (Toronto symbol CSF; SI Rating: Speculative) (780-408-5110;; Shares outstanding: 17.1 million; Market cap: $282.3 million; Dividend yield: 2.4%) operates 525 stores under two banners: The Cash Store and Instaloans. Both stores offer consumer payday loans (advances on upcoming paycheques). Advances to customers range from $100 to $1,500. Customers must provide proof of income, copies of recent bank statements, current proof of residence, and current telephone and utility bills. These requirements keep the company’s loan losses to a manageable 4%. Cash Store Financial’s stores also offer cheque cashing, money transfers, debit cards, prepaid credit cards, collections and telephone reconnection. Lawsuits are almost behind it Over the past two years, Cash Store has settled two of three class-action lawsuits that accused it of charging clients fees and interest that were above Canada’s annual limit of 60%. The company paid $9.8 million to settle lawsuits in Ontario and B.C., and only has an estimated $2 million in one-time charges remaining…

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