- Market Slices 25% from AAN Market Cap After 3Q Results Miss; Mostly Undeserved

- Unique Customer Base; Steady and Solid EPS Growth History; High Barriers to Entry

-AAN Stock Looks Cheap in a Broad Market Setting New Highs Nearly Every Day

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The rent-to-own segment is a small and somewhat dark corner of Wall Street.  The industry, which allows credit-challenged individuals to lease and eventually own furniture, appliances and jewelry, among other small ticket items, regularly attracts negative press and regulatory action. In terms of public relations, the industry is viewed as one slippery rung above payday lenders and pawn shops.

While there’s a negative—and undeserved—taint, if investors look at the long term returns of Aaron’s (AAN), for example, they’ll find a mid-cap stock ($3.9 billion) that has consistently beaten the benchmarks, its main competitor, Rent-A-Center (RCII), and the broader market over decades—and by a significant factor. Revenue and earnings tend to grow solidly and steadily, so sniff if you want, but AAN has been a winning stock for a long time. 

Moreover, the fact remains that AAN provides an underserved low-income community, a sizeable demographic in the U.S. as you’ll see below, with an ability to purchase...

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