Asta Funding Attracting the Attention of Wall Street

Many companies allow their customers to buy things on credit. But, not all customers are equally as good at paying their bills. So, many companies end up writing-off the accounts receivables that they really don’t expect to receive payment on. Along comes a firm that is willing to buy a bundle of those receivables at a discount to the amount actually owed by the borrowers. The company then makes out, because it is getting some money on receivables it expected to receive nothing on. The firm also potentially makes out, as long as it collects more than it paid for the entire bundle, hence making money in an area where another company did not think any money, or at least not enough, would be made. It is an interesting business model, to say the least.

This week, Reuters Select Top Down Company Focus articles concentrate on companies in the Finance sector. Today, we look at Asta Funding, Inc. (ASFI.O), a company in the Consumer Financial Services industry, that goes around and picks up the accounts receivables from other companies. ASFI recently came to light the Reuters Select Growth screen for Accelerating EPS Growth. And, after taking a closer look, we can understand why the analysts who cover ASFI expect continued gains in EPS going forward.

Accelerating Growth, Indeed
In order for a company to appear on the Accelerating Growth screen, its EPS must have grown at an average annual rate of at least 15% for the past three years. But, it is not enough for earnings to be growing at a solid clip; they have to be growing faster now than they did before.

How well has ASFI performed in this regard? For the trailing twelve-month (TTM) span, versus the year-earlier period, EPS growth hit 23.33%. Then, for the most recent quarter (MRQ), again, against the prior-year period, EPS climbed 43.43%, easily eclipsing the Industry’s 24.44% average.

ASFI’s longer-term performance similarly eclipses the Industry norm. Its five-year EPS growth rate was 34.54%, well above the 19.12% posted by its peers.

For this complete story, please visit Asta Funding Attracting the Attention of Wall Street.