| Stock (Symbol) | Stock Price | |
Portfolio Recovery Assoc. (PRAA) |
$58 |
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| Data is as of | Expected to Report | Sector |
August 22, 2013 |
Oct 28 – Nov 03 |
Finance |
| Sharek’s Take | ||
 Portfolio Recovery Associates stock isn’t doing much, but its got some good things coming, such as 30% profit growth three and four qtrs from now. The bad debt collection company recently purchased Aktiv Capital, a bad-loan recovery company in Norway, and this will hurt profits thru next qtr but help boost profits after. In fact revenue growth is expected to climb this qtr from 8% to 29%. PRAA should have a P/E of 17, but right now its only 15. The stock’s 16% undervalued and has 41% upside to 2015’s Fair Value. I also think once it makes up for this lost ground it will continue to compound at 17% a year long-term. |
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| One-Year Chart | ||
 Don’t be concerned with the +2% profit growth last quarter, PRAA needed to take a step back to tak two steps forward. Instead focus on the Annual Profits. Other than the recession years, growth has been good as profit have jumped from $1 to $4 in just seven years. |
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| Earnings Table | ||
 Profits only increased 2% last qtr, on an 8% rise in sales. Sales are expected to climb 29% next qtr.PRAA missed estimates by three cents for the 2nd straight qtr, but it’s not a big deal. Annual Profit Estimates for 2015 increased a bit. Quarterly profit growth is set to soar within two-or-three quarters. |
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| Fair Value | ||
 PRAA used to get a P/E of 17 five-to-ten years ago. I think it deserves one now as well. The P/E came down during the recession due to concerns people wouldn’t pay their debts. But profit growth is good again, this stock should be higher. |
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| Ten-Year Chart | ||
 Overall this has been a solid stock to own if you look at the big picture. Sure returns haven’t been consistent, but the stock’s compounded at 20% a year. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
12 of 25 |
Portfolio Recovery Associates might not gain momentum for another quarter or two, but once it does I think the stock will make a nice move higher. PRAA is ranked 17th in the 25 stock Growth Portfolio Power Rankings and 12th in the 12 stock Aggressive Growth Portfolio Power Rankings. |
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Aggressive Growth Portfolio
11 of 12 |
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