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I've been an AACE shareholder for the past two is my reasoning for owning this company:

1) 12 million families w/o checking accounts.

2) New stores targets constantly being met. Unlike check cashing stores in most areas I have seen, theirs are the cleanest and treat their customers well (I don't use them, but based on observation--I've visited a couple).

3) New stores add to the bottom line after about two years.

4) Revenues grow at existing stores.

5) They are the No. 1 in their business (about 1000 stores), and are successfully consolidating a fragmented industry.

6) Their business lines (check cashing, money orders, bill paying services, lottery tickets, wire services, payday loans, etc.) are all profitable and growing.

7) Recently made 52nd best franchiser in the country, tops in its sector.

8) There are only two real threats to the company, in my mind: legislation regulating fees in their business and loan turnovers, and default risk. Default risk has shown to be under control, and as long as it is under 20%, the company should do ok. Some states regulate this business, which present barriers to entry.

9) I look at this as a "safe" growth company. If the economy were to head south, marginal bank account owners would be forced to close their accounts and rely on AACE's services. Revenues would increase, but I suspect default rates would too.

10) Not as suspect to interest rate fears. They make 25% on loans, including fees, in 2-3 weeks. Avg. loan is $300.

BTW, This is my first fool post...FWIW.


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