New Trade for January 13th, 2021

Trading activity is muted this morning after a flat session yesterday.  Stocks closed little changed yesterday as traders digested higher rates, possible additional stimulus measures and political turmoil. The yield on the benchmark 10-year Treasury briefly traded at 1.18%, its highest level since March.

Given the rise, Credit Suisse recommended that investors favor pro-cyclical sectors, including financials and energy. Rising rates could hurt growth stocks, however, and a number of tech heavyweights including Facebook and Apple declined during yesterday’s session.

Our trade alert for today highlights a stock within the financial sector.  You may not have heard of this one, but it seems to be well set up for a breathtaking performance in 2021.  

PROG Holdings (PRG) is a provider of lease-purchases solutions, which it provides via more than 30,000 retail partner locations and e-commerce sites across most of the country.

If the name isn’t familiar, however, that’s because PROG Holdings has only been trading in its current form for a couple of months. The company previously operated under the Aaron’s banner; that rent-to-own business was spun off at the start of December as The Aaron’s Company (AAN).

PROG Holdings has nonetheless been picking up bullish sentiment since the spinoff, including two Buy calls – one new, and one reiteration.

For Loop Capital analyst Anthony Chukumba “Buy”, PROG‘s commercial equipment finance and leasing services provider is a standout in the space based on the fact that it boasts a substantial total available market and its competition for national retail partners is relatively limited. He also thinks the company can deliver additional revenue growth by “fully integrating” its own platform with e-commerce channels offered by its current retail partners and via direct marketing to its customers.

Jefferies’ Ryan Carr “Buy” is also optimistic about this financial stock. According to the analyst, the company is a “pioneer in the virtual lease-to-own world” and is poised for gains in a “large market that remains underserved.”

All told, the stock has eight “Buy” ratings, according to S&P Global Market Intelligence. That includes five “Buys” issued over the past three months. Moreover, a $70 price target implies the stock could run another 22% over the next year, which should put it among the best stocks in the financial sector. 

Where to invest $1,000 right now...

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But you have to act now, because a catalyst coming in a few weeks is set to take this company mainstream... And by then, it could be too late.

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