| Stock (Symbol) | Stock Price | |
PRA Group (PRAA) |
$50 |
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| Data is as of | Expected to Report | Sector |
March 9, 2015 |
Apr 28 – May 4 |
Finance |
| Sharek’s Take | ||
 PRA Group (PRAA), formerly known as Portfolio Recovery Associates, is one of the last undervalued stocks in the stock market. The current market situation is one in which most stocks are overvalued this time. From Blue Chips to Growth Stocks, most are too high to buy, and PRAA is the exception. Before the recession hit in 2008, PRAA has a median P/E of 17 in 2006/2007. Then the P/E dipped, like with many stocks. But unlike the others, this P/E has yet to bounce back. PRAA is a good company, it buys bad debt then calls people and tries to negotiate a settlement while being nice. Business is good, with sales up 36% last qtr, but profits were hurt by one-time charges related to foreign exchange and taxes. Also, buying bad debt is expensive nowadays as the economy is good. PRAA has a $100 million stock buyback program going, and has bought back $80 million in stock so far. At 11 times earnings this stock has vast upside, but PRAA is unfortunately lacking momentum so it might be a while before the stock gets where it should be. |
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| One-Year Chart | ||
 Last qtr’s surprising miss was due to the company placing bad bets on currency and also a one-time tax bill. The stock fell but has since bounced back and is now $55. Estimates look good as does the low P/E of 11. Do note however the stock isn’t admired at this time. |
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| Earnings Table | ||
 Last quarter revenue growth was a solid 36% but profits grew just 5%.PRAA missed estimates as mentioned earlier. Annual Profit Estimates came down some, but are where they were 4 qtrs ago. Expected quarterly profit growth looks good but has been evaporating a bit the last few qtrs. |
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| Fair Value | ||
 I feel in the long-run this stock will get back to 17x earnings. But that may be too much to expect it to happen in a year. Upside to Fair Value is fantastic. |
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| Ten-Year Chart | ||
 Strange the stock hasn’t moved since early 2013. I don’t understand it. Perhaps it’s because profit growth was just 10% last year, but profits are expected to grow 24% this year and investors are usually a step ahead. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
15 of 22 |
PRA Group is a super value, but the stock needs to get some more momentum before I get excited. The main problem with this stock is it hasn’t gone higher since 2013. Still, this is one of the last true values of the current stock market, if you’re a patient investor I would invest. PRAA is ranked 15th in the 22 stock Growth Portfolio Power Rankings. I will sell the stock from the Aggressive Growth Portfolio as it has been in this portfolio a while yet hasn’t provided a significant return on investment. |
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Aggressive Growth Portfolio
N/A |
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