MoneyGram Braves Risks To Expand Product Line, Markets

On Sep 13, 2016, we issued our updated research report on MoneyGram International Inc. (NASDAQ:MGI) . The company is exploring opportunities to capitalize on growth and expansion both geographically and through its product offerings. Exciting new technologies are being implemented to the digital business to transform the company and differentiate its brand.

For instance, the company is focusing on an industry-leading kiosk technology. Its staging kiosks in particular are providing a better overall customer experience at the point-of-sale and due to lower operating costs and capital requirements. As a result, the company has decided to scale back its full-service kiosk to focus more on profitable growth and customer centric solutions that come from the staging platform.

The company has also strengthened its presence in high-growth potential markets of Latin America, Russia, the Asia Pacific, Africa, Western and Eastern Europe. It has also intensely penetrated several unexplored and underdeveloped global markets of the Middle East, South America, Vietnam and Myanmar.

MoneyGram is aggressively making investments in ramping up its digital channel for money transfer, given the growing acceptance of the digital forms of remittance. Various components of its digital business MoneyGram.com, mobile account deposit and virtual agents are all showing solid growth.

The company boasts a wide agent network by virtue of its partnership with several post offices, numerous national banks and stores globally.

Moneygram has also undertaken cost saving initiatives which include closing facilities, headcount reduction, improving system processes, investing in automation and offshoring. These initiatives are expected to reduce cost and accrue to the bottom line in the coming years.

Nevertheless, increased commission, operating expenses, foreign exchange volatility as well as compliance spending also exert pressure on operating margins and cash flow at a time when operating revenues are already facing headwinds due to global instability.

MoneyGram continues to be troubled by economic and geopolitical issues impacting its performance in Saudi Arabia, Libya, and Angola, countries that have historically been strong send markets for MoneyGram.

MoneyGram carries a Zacks Rank # 3 (Hold). Some better-ranked stocks in the same space are Euronet Worldwide, Inc. (NASDAQ:EEFT) , ORIX Corporation (NYSE:IX) and Daiwa Securities Group Inc. (OTC:DSEEY) . Each of these stocks carries a Zacks Rank # 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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