International Money Express is among the IBD 50 Growth Stocks To Watch as the wire transfer company forms a new base amid strong demand among workers in the U.S. to move money to their families in Latin America and other regions.
A look at the weekly chart on MarketSmith reveals a flat base forming on top of two previous side-by-side bases. Thus, a base-on-base pattern is forming.
Base-on-base patterns usually occur during times of stock market turmoil but can be powerful launchpads for stocks that break out above them once the market gets going again.
Stock To Watch Had Base Hiccup
The latest formation started after the stock shot up past a 19.06 buy point of a consolidation on March 16. The surge was short-lived. Three days later, after hitting a peak of 21.98, IMXI stock began rolling over and in the next five weeks gave back all of its gains.
But the stock appears to be forming a bottom near the old buy point. A bullish sign is that the 50-day moving average has come up to the previous buy point, offering a springboard for the stock. The new buy point is 22.08.
The company, also known as Intermex, has earned an IBD Composite Rating of 96, based on its fundamental and technical strength. That high rating comes by way of an Earnings Per Share Rating and Relative Strength Rating that are also in the 90s. These are hallmarks of a growth stock to watch.
Earnings have risen an average 32.5% in the past three quarters. Annual earnings have been equally strong, averaging 31% for the past three years, on average sales increases of 17%.
First-quarter results are due May 4. The consensus estimate by analysts tracked by FactSet is earnings per share of 32 cents, up 19% from a year earlier. For all of 2022, Wall Street sees EPS of $1.69, up 15% from the year before.
IMXI stock ranks No. 2 in IBD's specialty financial services group, according to Stock Checkup. The group itself stands at No. 95 out of IBD's 197 industry groups. The group has jumped around in recent weeks. It's down from No. 73 three weeks ago but up from 107 six weeks ago.
Handling Remittances To Latin America
Miami-based Intermex sends funds from customers in the U.S. and Canada to more than 20 countries in Latin America, the Caribbean, Africa and Asia. Funds move digitally through agent retailers and company-operated stores and online through a mobile app and the company's website.
Wire transfers and money remittances accounted for nearly 86% of Intermex's revenue in 2021, while foreign exchange gains provided nearly 14%.
Many of Intermex's customers have roots in Latin American and Caribbean countries and either don't have bank accounts or prefer the convenience of using Intermex to transfer funds. Intermex has 100,00 payout locations, including in rural communities.
Intermex's services include payroll cards. Intermex transfers funds from employers to their employees' card-linked accounts. Employers pay no fee for the service. This service eliminates the need for employers to cut checks and makes it easier for employees to transfer funds to family members across the border.
Fluctuations in exchange rates can affect the volume of customer remittances as well as foreign-exchange-related gains and losses.
Services offered by this growth stock to watch include payroll cards. Intermex transfers funds from employers to their employees' card-linked accounts. Employers pay no fee for the service. This service eliminates the need for employers to cut checks and makes it easier for employees to transfer funds to family across the border.
Competitors include Western Union, MoneyGram International and Euronet Worldwide. Of those, Intermex appears to be in the best shape fundamentally and technically at the moment.
