Financial/Consumer Financial Services (.FCF) Sector to Continue Growth - Asta Funding (ASFI) to Follow
The newest stock to capture my attention emerged due of the increasing institutional cash flow into the sector and how the market is positioned. Often times when the market becomes very choppy like this, institutions look to move their money into the Financial/Consumer Financial Services (.FCF) sector. There are a number of stocks within the group that are benefiting from this and have been benefiting since mid November. The one that has caught my attention is Asta Funding Inc (ASFI). With strong earnings, positive upward trend, and industry momentum, Asta Funding is positioned well for future growth. A recent pull back has setup a good entry point as the MACD and FULL STO start to turn bullish again.
Asta Funding Inc. (Nasdaq:ASFI), describes itself as a leading consumer receivable asset management company that specializes in the purchase, management and liquidation of performing and non-performing consumer receivables. Asta generates revenues and earnings primarily through the purchase and collection of performing and non-performing consumer receivables that have typically been either charged-off by the credit grantors or not considered to be prime receivables. These receivables include MasterCard, Visa and other credit card accounts issued by banks and other consumer loans issued by credit grantors. Asta may also purchase bulk receivable portfolios that include both distressed and non-conforming loans.
The fundamentals of Asta look solid and that is demonstrated by the strong earnings report for the fiscal first-quarter. Earnings of 64 cents per share, outpaced the consensus estimate by about 12% and improving on the previous year's 43 cents. ASFI has a net margin of .45, currently the highest listed under this Profit Track, and produced annual earnings growth of 37% above the previous year. The strong price pattern, PE ratio, price and group rank all add to the companies current positive position. Look for both the Financial/Consumer Financial Services (.FCF) sector and Asta Funding (ASFI) to continue their strong performance in coming months, especially if markets remain choppy.