AEA: Heading Up Amid Investigation

February 17, 2012
Advance America, Cash Advance Centers, Inc. (NYSE:AEA) skyrocketed to hit its new 52-high.
After trading as low as well below the value of $9.00 AEA experienced a sudden increase and gained $2.53 or 31.98% per share. The entire trading session on Thursday (February, 16) ended up at $10.44 before the closing bell. Furthermore, in the after-hours the company gained 0.27% more. The unusual price movement resulted in the increasing trading volume that reached 45.54 million shares as compared to the average trading volume of 517,301.00.
The share price started heading up with regard to the announcement made by Law office of Brodsky & Smith, LLC. The point is that the lawyers launched an investigation procedure related to the potential claims against the management of AEA in terms of the possible breaches of fiduciary duty given the acquisition deal proposed by the Grupo Elektra, S.A.B. de C. V. According to the terms and conditions of the transaction the owners of the company’s stocks in their stock market portfolios are expected to receive $10.50 in cash per share. However, the analysts forecasted the target price of $11.00, thus the proposed transaction undervalues the possible investors’ income.
The market capitalization of the company currently amounts to $651.83 million, thus referring AEA to the list of small cap companies. On the basis of the last four quarters the company has a price-to-earnings ratio of 11.33 and the net income per share of 0.92 resulted from the recent quarterly financial results. The company owns 62.44 million outstanding shares distributed among stock market portfolios of different investors.
Currently AEA is regarded as a high risk company because it has a beta of 2.69 which indicates that the stock is significantly more volatile than the market.
Advance America, Cash Advance Centers, Inc. belongs to the Consumer Financial Services industry of the Financial sector. The company is focused on providing cash advance services all over the USA.
By Richard Evans

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