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It Is Too Early To Bet On The Potential Upside At Conn's

Shares of specialty retailer Conn's (NASDAQ: [[CONN]]) have been feeling the heat from lower-than-expected profitability in recent quarters, with its stock price selling off more than 50% over the past year. The company has been hurt by a deceleration in its per-store sales productivity during the current fiscal year, as well as from a rise in credit delinquencies that has taken a toll on its credit segment's profitability, as illustrated in the below table. On the upside, though, Conn's management seems to be proactively trying to turn things around through higher underwriting standards and its announcement of an exploration of strategic initiatives, which could lead to better profitability in the future. So, at its discounted price, is the company a good bet for investors?

  3Q 2Q 1Q
Credit delinquencies (% of portfolio) 10.0% 8.7% 8.0%
Credit segment profit $(33.2)M $(0.2)M $11.3M

Source: Conn's 3Q2015 10Q Report, 2Q2015 10QRead More …