Why Portfolio Recovery Shares Charged Higher

Before you go, we thought you'd like these...
Before you go close icon

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 Portfolio Recovery Associates were uncovering some strong gains today, climbing as much as 10% after posting a strong earnings report.

So what: The debt collection and factoring specialist topped estimates once again, posting an EPS of $2.56 against expectations of $2.25, up 37% from $1.87 a year ago. Revenue improved 24% to $183 million, also beating estimates, while cash collections were up 28% to $296 million. CEO Steve Fredrickson said the results were "exceptional by any measure," noting a significant investment of $200 million in new portfolio purchases. Fredrickson also said the company's competitive advantage with competencies in multiple asset classes, access to low-cost funding, and top-notch analytics should continue to drive growth.

Now what: This was the fourth straight earnings beat for Portfolio Recovery as the company appears to be firing on all cylinders. Considering the growth rate it's managed to keep up, shares seem undervalued at a P/E near 18, and actually faded through the session to trade at just 4% up toward the end of the session. With the economy continuing to underperform, it stands to reason that there will be plenty of bad debt going around to drive more business. I'd expect more standout quarters like this one from Portfolio Recovery.

Are you looking for more stocks that just keep growing and growing? Check out The Motley Fool's FREE report called "6 Picks for Ultimate Growth." Just click HERE for instant access to a whole new game plan of stock picks to help power your portfolio.

The article Why Portfolio Recovery Shares Charged Higher originally appeared on Fool.com.

Fool contributor Jeremy Bowman has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Portfolio Recovery Associates. 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. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

People are Reading