Q: You have provided many insights with respect to GoEasy and its recent issues.
Given that PRL is involved in a similar credit market, do you consider PRL a Sell at this point? What is your view on PRL?
Thanks
Tim
Given that PRL is involved in a similar credit market, do you consider PRL a Sell at this point? What is your view on PRL?
Thanks
Tim
5i Research Answer:
PRL is not immune to credit issues, and of course is in the same business. But GSY's issues could be good for PRL, if GSY decides to slow its expansion. It all comes down to credit quality. PRL can still do well if it can control credit risk. The stock is priced well and it has a decent history of raising dividends. Thus, we would not simply assume PRL is a SELL because of GSY. However, PRL is small, and credit conditions do change. It should be considered higher risk, for sure, especially in a changing rate environment.