Encore Capital Group Shares Plunged: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of debt-collection specialist Encore Capital Group (NAS: ECPG) were sliding today, falling as much as 17% in intraday trading on heavier-than-average volume.

So what: Some investors were obviously very disappointed with Encore Capital's second-quarter results. Gross collections for the company increased 24% from last year, to $195 million, while earnings per share were $0.58, up from $0.47 in 2010. Encore's total revenue of $115.8 million missed analyst expectations of $116.6 million and -- depending which set of estimates you're looking at -- the EPS either missed expectations by $0.01 or hit them on the nose.

Now what: The big reaction to what did not look like a terribly bad earnings report seems a bit overdone. But with a small stock like Encore that has a relatively low trading volume, even a moderate amount of selling pressure can have a big impact. For investors that have had Encore on their radars, this could be a good buying opportunity.

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At the time this article was published Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.Fool contributorMatt Koppenhefferdoes not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting hisCAPS portfolio, or you can follow Matt on Twitter@KoppTheFoolorFacebook. The Fool'sdisclosure policyprefers dividends over a sharp stick in the eye.

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