On Jul 6, 2013, Zacks Investment Research upgraded
Portfolio Recovery Associates Inc.
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Portfolio Recovery reported positive earnings surprise in the
last four quarters with an average beat of 8.28%. The long-term
earnings growth of the company is presently pegged at 15%.
Portfolio Recovery's bottom-line results have shown steady
improvement over the past few quarters. Strong cash collections
drove revenues upward, while an increase in operating income
drove operating margin higher.
Moreover, to make the shares more affordable, Portfolio
Recovery announced a 3:1 stock split in Jun 2013, which will be
conducted on or around Aug 1, 2013. This is the first stock split
being implemented by the company, which went public in 2002.
Further, Portfolio Recovery has expanded beyond its primary
debt collection business into government collections, audit
services and claims settlement with the acquisitions of IGS
Nevada, Alatax, Broussard Partners, MuniServices, Claims
Compensation Bureau and Mackenzie Hall. The ability to acquire
and assimilate businesses in related fields is certainly a
long-term positive as the traditional debt collection business
matures and becomes more competitive.
We expect Portfolio Recovery to grow 20% year over year in the
second quarter of 2013. Consequently, the Zacks Consensus
Estimate is currently pegged at $2.24 per share. Over the last 60
days, 2 out of the 5 analysts covering the stock raised their
estimates for Portfolio Recovery's second quarter and full year
Other Stocks to Consider
Other stocks in the sector that are performing well and are
worth a look are
Sykes Enterprises, Incorporated
) - Zacks Rank #1 (Strong Buy),
Discover Financial Services
) - Zacks Rank #2 (Buy) and
Regional Management Corp.
) - Zacks Rank #2 (Buy).
DISCOVER FIN SV (DFS): Free Stock Analysis
PORTFOLIO RCVRY (PRAA): Free Stock Analysis
REGIONAL MANAGE (RM): Free Stock Analysis
SYKES ENTRP INC (SYKE): Free Stock Analysis
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