| Stock (Symbol) | Stock Price | |
PRA Group (PRAA) |
$58 |
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| Data is as of | Expected to Report | Sector |
November 18, 2014 |
Feb 17 – Feb 23 |
Finance |
| Sharek’s Take | ||
 In July, Portfolio Recovery Associates completed its acquisition of Aktiv Kapital a Norway consumer debt collector, and the combined companies will be known as PRA Group, and make it one of the largest debt buyers in the world. Aktiv is the reason profit growth was poor the past couple of qtrs, but it is set to help profits moving forward. PRAA has been lackluster this year, but is poised to make a big move. PRAA sells for just 12 times 2015 profit estimates, the median P/E was 14 and 15 these past 2 yrs. If in 2015 PRAA’s P/E rises to 17 (what it was in 2006-2007) — and profits grow 19% as planned — then this stock will be 40% higher by next year. |
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| One-Year Chart | ||
 The last 2 qtrs were impacted negatively because of the Aktiv acquisition, which was expected. Now comparisons going forward will be easy, plus the Aktiv profits are kicking in. Estimates look solid. The P/E of 12 is very low, and I see a bounce back next year. This stock is a real good buy. |
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| Earnings Table | ||
 Qtrly profit growth was only 10% due to the acquisition costs, but sales increased 21%.PRAA beat the street by 2 cents but this wasn’t newsworthy. Annual Profit Estimates are about what they were last quarter. Quarterly profit growth is set to accelerate and perhaps that will bring more eyes to the stock. |
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| Fair Value | ||
 Notice in the top of this table that the P/E used to be 17. Now the P/E is 15 on 2014 earnings estimates, but the stock sells for just 12x 2015 estimates (which we should be looking forward too). PRAA has good upside. |
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| Ten-Year Chart | ||
 Profit growth was above 20% the last four years, and dipped to 15% this year. There’s always questions as to whether PRAA can buy more distressed debt but the company always seems to come through. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
14 of 22 |
PRA Group could have a banner year in 2015, as the stock’s low P/E of 12 gives it good upside potential. The stock’s been doing OK, but needs to start a high volume move higher before I can get more excited. I’ve been waiting a whiile, I figured PRAA would be higher by now. PRAA is ranked 14th in the 22 stock Growth Portfolio Power Rankings and 12th in the 12 stock Aggressive Growth Portfolio Power Rankings. |
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Aggressive Growth Portfolio
12 of 12 |
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