| Stock (Symbol) | Stock Price | |
Portfolio Recovery Assoc. (PRAA) |
$97 |
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| Data is as of | Expected to Report | Sector |
August 23, 2012 |
Oct 22 |
Financial |
| Sharek’s Take | ||
 Portfolio Recovery Associates is a stock I have followed for almost a decade now. The company buys defaulted consumer debt and tries to get all or some of the money back from these consumers. PRAA will be purchased today in the Growth Portfolio because the company whipped estimates last quarter and guided higher. This is a quality long-term holding that is timely right now. |
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| One-Year Chart | ||
 Here’s the one-year chart of PRAA. The stock has gapped up after announcing last quarter’s earnings. I really like the profit growth of 30% last quarter when compared to the P/E of 14. PRAA deserves a P/E in the high-teens. |
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| Earnings Table | ||
 Profits rose 30% last quarter on a strong 28% increase in sales. Sales grew 32% in 2010, 23% in 2011 and are expected to climb 26% this year — strong numbers for a stock with a P/E of 14.PRAA has strong momentum in the beat-the-street category. 4QtrsAgo the company beat buy only a penny, then the next quarter by two pennies. The last two quarters the beatdowns have accelerated to 16 cents and now 23 cents.PRAA really increased Annual Profit Estimates, which I think is the real reason the stock’s hot.Quarterly estimates are solid and increasing. |
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| Fair Value | ||
 I looked back at past years of PRAA and think 17 times earnings is reasonable. Solid upside here. |
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| Ten-Year Chart | ||
 The best thing about this stock is the ten-year chart. From $15 to almost $100 in less than ten years. The only hiccups were in 2007-2009 when the economy was down. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
9 of 16 |
With the economy doing better, Portfolio Recovery Associates is having an easier time getting money back from people on defaulted accounts. This is a stock I feel comfortable owning both in the short run and long run as well.PRAA is ranked 9th in the 16 stock Growth Portfolio Power Rankings. I won’t purchase if for the Aggressive Growth Portfolio yet, mainly because PRAA has an estimated Long Term Growth Rate of only 15%. | |
Aggressive Growth Portfolio
N/A |
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