WINDSOR, ON / ACCESSWIRE / November 10, 2015 / The Silicon Valley Insider (or "SVI") would like to alert investors regarding several emerging investment opportunities that present unprecedented ongoing growth potential.
US stocks are seeing sharp growth, prompting investors to double down on equities and push forward with the most optimism Wall Street has seen in years. Across the major indexes stocks posted an 8% rally and with November still unfinished, many are predicting another bullish month. The S&P 500 is expected to have another bullish surge after climbing back to within 1% of its peak back in May. Investors watching the DOW are also optimistic after the index pulled to within 400% of its peak.
The strong growth is being underlined by the usual tech suspects. Apple is leading the pack, of course. Google or Alphabet (that's what it's called now) is also doing well but good luck buying any of those.
We've dug a bit deeper than other publications and we are happy to say we've found the next big thing and it's in a market that although quite techy, is often ignored by investors. That sector is FinTech, specifically the area that deals with online lending platforms.
We believe we've unearthed the next Unicorn (a Unicorn refers to any tech startup company that reaches a $1 billion dollar market valuation - these are not to be confused with Dragons which are worth 4 times more).
If there's a vertical that can produce the next FinTech unicorn it is definitely online lending. 2014 saw some $12 billion worth of new loans generated and Morgan Stanley projects a 47% CAGR for unsecured online lending through 2020.
Many established players in finance have entered the online lending space, most notably Goldman Sachs. Venture capital interest in online lending is also at an all-time high with some companies raising as much as $870 million.
The buzzword for online lending is growth so here are our top 4 picks to power outsized returns for investors in the coming months.
IEG Holdings Corp. (OTC: IEGH) provides online unsecured consumer loans to individuals. It offers loans for any reason: debt consolidation, medical expenses, home improvements, auto repairs, major purchases or discretionary spending.
IEGH is coming off a record Q3. The company announced that its Q3 three month total revenues increased 272% from $145,159 in 2014 to $539,867 in 2015 and Q3 nine month total revenues increased 453% from $239,832 in 2014 to $1,327,329 in 2015.
IEGH broke $10 million in US cumulative loan volume and has confirmed plans for an aggressive state expansion over the next 6 months.
IEGH's balance sheet is also looking better thanks to full repayments of all debts over the course of Q3. Even greater upside comes from the company's increase of net assets which now stand at $8.3 million.
Those numbers certainly look like they are set to grow over the coming months/ quarters/ years and with plans to start offering loans in 25 US states by early 2015, it's hard not to see investors beating a path to the doors of IEGH.
Investors certainly will not be able to stay away if the company's push to be uplisted to the NASDAQ is approved. Management has announced its open application which could be approved any day, and opens another huge door for the company to get its shares in front of millions of new investors. IEGH provides investors with the most cost effective solution and greatest potential for returns on investment.
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World Acceptance Corp. (NASDAQ: WRLD) engages in small-loan consumer finance business. The company offers short-term small and medium-term larger installment loans, related credit insurance and ancillary products and services to individuals.
Unlike IEGH, WRLD is already on the NASDAQ which shows the sheer power of what is possible in this space. Trading at around $47 a share, WRLD recently reported results for Q2 and six months ending September 30, 2015.
The big news surrounded the benefits of share buy-backs completed in 2015. WLRD also made changes to its branch level incentive plan which in its words, "will reduce our net charge-offs on a long-term basis."
WLRD also showed some efficiency on the cost side and announced that general and administrative expenses amounted to $63.4 million in the second fiscal quarter, a 11.5% decrease over the revised $71.7 million in the same quarter of the prior fiscal year.
All in all, WRLD is a solid prospect even at $47 a share. The company managed $1.16 billion worth of gross loans for the six-month period ending September and this by any standard in the online space right now, is huge. Keep in mind, much of the growth opportunity may have been already priced in.
Enova International, Inc. (NYSE: ENVA) is a leading provider of online financial services to the large and growing number of customers who use alternative financial services because of their limited access to more traditional credit - these are your "unbanked" or "underbanked".
Don't let the current share price of ENVA fool you; it's a huge going concern that arranges loans for consumers and/or financing for small businesses in all 50 states and Washington D.C. in the United States and in five foreign countries.
Company CEO David Fisher presented at the JMP Financial Services and Real Estate Conference back in September and by all accounts he did well. The stock itself has been enjoying a bit of resurgence having fallen to a 12-month low of $8.73. It's a long way from its 12-month high of $32.10 a share but we believe given its solid operations it could be relatively undervalued at current prices.
Investors will be taking a closer look at the stock in wake of recently reported earnings. ENVA announced a 6% year-over-year increase to $133.7 million for its third quarter (3Q 2015). The company also saw a 40% year-over-year increase in US installment loan and receivables purchase agreement to $53.6 million.
ENVA also saw good progress in the UK, reporting a 23% sequential rise in loan originations for Q3. "Our recent product introductions continue to exceed our expectations and now account for nearly half of our loan portfolio," said David Fisher, CEO of ENVA. "Our investments in these new initiatives have muted the impact of U.K. regulatory changes on our business and will continue to reduce regulatory risk both in the U.S. and the U.K. for years to come.”
We like the sound of that and believe you can make good on the huge upside opportunity available in ENVA.
Regional Management Corp. (NYSE: RM) is another provider of various loan products primarily to customers with limited access to consumer credit from banks, thrifts, credit card companies, and other traditional lenders.
RM missed Wall Street estimates for Q3 revenues by 1 cent but nobody's making a big deal about it because the company still managed third-quarter net income of $6.5 million. The stock has hit a high of $20.27 over the last 12 months and with the general bullish investor sentiment in the online lending space, it could yet climb higher.
Overall we are bullish on online lending and believe that IEG Holdings Corp. (OTC: IEGH) has Unicorn-potential given the strong growth across the FinTech space as well as company specific fundamentals and technical indicators.
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