| Stock (Symbol) | Stock Price | |
Portfolio Recovery Assoc. (PRAA) |
$58 |
|
| Data is as of | Expected to Report | Sector |
March 20, 2013 |
Apr 28 – May 02 |
Finance |
| Sharek’s Take | ||
 Portfolio Recovery Associates’s (PRAA) momemtum is stalling, but some of it is for the good. What really brought momentum down was PRAA only beat by a penny LstQtr, it had been beating by at least a dime every qtr. Then the company bought Aktiv Capital, a bad-loan recovery company out of Norway, and this will result in reduced profit growth the next two quarters. But now this quality Finance stock is selling for only 15 times earnings. I feel the P/E should be 18 and PRAA has 23% upside to its Fair Value. |
||
| One-Year Chart | ||
 PRAA had lots of momentum late last year, then the stock went through a correction, and has since rebounded. Analysts have taken away their Est. LTG, but I feel this is a 17% grower. Notice Estimates show teens profit growth coming. P/E of 15 makes PRAA a bargain. |
||
| Earnings Table | ||
 Profit growth was 30% last quarter on a solid 20% increase in sales. Cash collections were up 22%.PRAA only beat by a penny last quarter, it had been whipping estimates before this. Annual Profit Estimates didn’t grow by much. Quarterly profit growth looks decent, I anticipate high-teens profit growth this year (growth was 40% in 2013). |
||
| Fair Value | ||
 I’m taking my Fair Value P/E down from 20 to 18. I feel PRAA is worth 17 times earnings in the long-term, it was selling for 17 times earnings before the financial crisis. Aktiv lowers short-term EPS, raises profits in the long-term. Solid upside in these shares for long-term investors. |
||
| Ten-Year Chart | ||
 Last qtr I said in this space “This looks like a parabolic run — often a sign a stock’s due for a fall” and now we got our correction. When I look at the one-year chart (above) I think this stock is setting up a cup-and-handle and will breakout and go on a run later this year. I love the bottom/right corner of this ten-year chart — 21% profit growth and stock growth on a long-term basis. |
||
| Power Ranking | Bottom Line | |
Growth Portfolio
9 of 25 |
Portfolio Recovery Associates is coming down off its 2013 high when profits grew 40%. Now we should expect more moderate high-teens profit growth. But now the stock’s corrected and the P/E is only 15. There’s good upside for long-term shareholders. PRAA is ranked 9th in the 25 stock Growth Portfolio Power Rankings and 9th in the 11 stock Aggressive Growth Portfolio Power Rankings. |
|
Aggressive Growth Portfolio
9 of 11 |
||
