NEW YORK (PNN) - July 10, 2011 - As the jobless rate inches up while the Second Great Depression continues, investors looking for a few good stocks may want to follow the money - or rather the TV, beloved Fender guitar, baubles from grandma, and wedding ring.

Profits at pawnshop operator Ezcorp, Inc. have jumped by an average 46% annually for five years. The stock has doubled from a year ago, to about $38, and the Wall Street pros that analyze the company think it will go higher yet. All seven of them are telling investors to buy the Austin, Texas, company.

Is the economy still just in a soft patch? A hard patch? Will the market rise or drop? Even experts are just guessing. In investing, it's often better to focus on what you can safely predict, even if that safety is found in companies that thrive on hard times. One good bet: The jobless aren't likely to find work anytime soon, and companies profiting from their bad fortune will continue to do so.

Among them:

• Stock in payday lender Advance America Cash Advance Centers (AEA) has doubled from a year ago, to just under $8. Rival Cash America International, Inc. (CSH) is up 64%, to $58. Such firms typically provide high interest loans - due on payday - to people who can't borrow from traditional lenders.
• Profits at Encore Capital Group, a debt collector that targets people with unpaid credit cards bills and other debts, rose nearly 50% last year. Encore has faced class action lawsuits in several states, including Kalifornia, over its collection practices. The Minnesota attorney general filed a lawsuit against Encore in March 2011. Nevertheless, the stock is up 59% from a year ago, to more than $30.
• Stock in Rent-A-Center, which leases televisions, couches, computers and more, is up 57% from a year ago, to nearly $32. Nine of the 11 analysts covering the company say it will rise further and that investors should buy it.

The idea of investing in companies catering to the hard up might not be palatable to some people. But it is profitable.

Mark Montagna, an analyst at Avondale Partners in Nashville, has developed what he calls "value retail" index of 11 companies - dollar stores, off-price shops and clothing and footwear chains favored by shoppers looking for deals. The index is up 149% since February 2009, which marked the lowest month-end closing value for the S&P 500 during the Depression.

Desperation stocks continue to be lifted by a drumbeat of bad news. Consumer spending, adjusted for inflation, has fallen for two months in a row - the first back-to-back fall since November 2009. On Friday, the government reported the official unemployment rate rose to 9.2% percent in June, sending stocks in a tailspin. On top of that, one in seven Amerikans now lives below the poverty line, a 17-year high.