Five interesting things that Hodges Capital research analysts discovered this week...

#1 BNPL: A new report from Accenture indicates that 45 million Americans utilized a buy now, pay later (BNPL) option in 2021, an increase of 300% from 2018. The rapid growth is attracting unwanted attention from state and federal regulators. A September survey from Credit Karma of U.S. shoppers indicated that 44% used BNPL over the last year, with 34% missing at least one payment.

#2 CASHLESS ECONOMY: A recent article in American Banker indicated that just 19% of all purchases in 2020 were made in cash, representing a significant decline from 30% in 2010. The pandemic likely accelerated the trend as cash’s share of all payments decreased by seven percentage points in 2020.

#3 INFLATION: Consumer Price Index data for January showed that prices increased 7.5 percent over the past year. After stripping out food and fuel, inflation rose 6 percent, the fastest pace since 1982. We believe that the market will closely monitor inflation, wage growth, and consumer purchasing power in 2022.

#4 BOOKS: The average number of books Americans read has dropped to its lowest level since at least 1990, according to a recent Gallup poll. Comparing the average number of books read per year over the last two decades, the declines become greater moving up the age ladder. Neil Howe of Hedgeye Risk Management believes that the older Americans reported the largest decline because they have more recently adopted digital entertainment.

#5 PERCEPTION VS. REALITY: “Since 1963, there have been nine periods where the federal funds rate has grown in the 40%-plus range. We grew every year, but we averaged double-digit growth during the rising interest rate periods. So it gives us a lot of comfort that in a rising rate environment, the company has performed very well.” - Michael Egeck, CEO of Leslie’s

Subscribe to the Hodges Friday Fast Five to receive the latest Fast Five via email every Friday.

Hodges Private Client is a program offered through Hodges Capital Management, Inc. (“HCM”). HCM is an Investment Advisory Firm registered with the Securities and Exchange Commission (“SEC”), is a wholly owned subsidiary of Hodges Capital Holdings and serves as investment advisor to the Hodges Funds. HCM is affiliated with First Dallas Securities, Inc, a broker-dealer, and investment advisor registered with the SEC.

This discussion is not intended to be a forecast of future events and should not be considered a recommendation to buy or sell any security. Past performance is not indicative of future results. Investing involves risk. Principal loss is possible. Investing in smaller companies involves additional risks such as limited liquidity and greater volatility. No current or prospective client should assume that information referenced in this communication is a recommendation to buy or sell any security or is a substitute for personalized investment advice from your individual advisor. HCM does not provide tax or legal advice. Consult your tax or legal advisor for any related questions.

All information referenced herein is from sources believed to be reliable and is provided as general market commentary and does not constitute investment advice. This material was created for informational purposes only and the opinions expressed are solely those of HCM. HCM shall not in any way be liable for claims and makes no expressed or implied representations or warranties as to the accuracy or completeness of the data and other information. The data and information are provided as of the date referenced and are subject to change without notice.