payday-loansTomahawk, WI 4/1/2013 (Expedated) – As April begins we whom live in the northern reaches of our country long for sunny days and that is also  the case for our one our  Monday stocks who is headed in the wrong direction this morning.

DFC Global (DLLR)  is off some 18% in the morning session. DFC Global through its subsidiaries, provides retail financial services to unbanked and under-banked consumers, and small businesses. The company’s primary products and services include unsecured short-term consumer loans, secured pawn lending, check cashing, gold buying, and Western Union money transfer and money order, as well as foreign currency exchange, reloadable VISA prepaid debit cards, and electronic tax filing.

The risky credit market or payday loan market is simply put, risky. Investors are taking a hard look at DFC after the company issued s worse than expected earnings per share guidance for its third quarter. They have also lowered the company’s view of expected profit for the full year. The company has cited issues caused by new regulations in the United Kingdom as reasons for their poor performance and changed outlook.

In early March, a British regulator at the Office of Fair Trading,  said it would give “payday lenders” 12 weeks to change their business practices. There has always been a question about such businesses  granting consumers loans that they could not afford to repay, and then profiting from multiple rollovers of those loans. DFC Global said that it has responded to these developments by implementing higher lending standards. The lender obtained 48% of its revenue from the United Kingdom in fiscal 2012, according to the company’s annual report which is probably one of the reasons for the downturn in stock value today.

Disclaimer: This article is intended for informational and entertainment use only, and should not be construed as professional investment advice. They are my opinions only. Trading stocks is risky — always be sure to know and understand your risk tolerance. You can incur substantial financial losses in any trade or investment. Always do your own due diligence before buying and selling any stock, and/or consult with a licensed financial adviser.

 

 

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