4-Star Stocks Poised to Pop: Portfolio Recovery Associates
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, bad-debt collector Portfolio Recovery Associates (NAS: PRAA) has earned a respected four-star ranking.
With that in mind, let's take a closer look at Portfolio Recovery's business and see what CAPS investors are saying about the stock right now.
Portfolio Recovery facts
|Headquarters (Founded)||Norfolk, Va. (1996)|
|Market Cap||$1.21 billion|
|Trailing-12-Month Revenue||$441.6 million|
|Management||Co-Founder/Chairman/CEO Steven Fredrickson|
Co-Founder/CFO Kevin Stevenson
|Return on Equity (Average, Past 3 Years)||16.1%|
|Cash/Debt||$30 million / $261.6 million|
Encore Capital Group (NAS: ECPG)
Sources: S&P Capital IQ and Motley Fool CAPS.
Earlier this week, robertshrestha listed several of Portfolio Recovery's positives: "Management with great experience/knowledge in debt collection biz, decent growth expectations, stock unfairly pummeled over last few months. Great combination for market-beating."
Portfolio Recovery even boasts a robust three-year average operating margin of 33.4%. That's much higher than that of rivals Asset Acceptance (2.6%) and Encore Capital (22.1%), as well as other debt-related business services companies like Fair Isaac (NYS: FICO) (20%) and Equifax (NYS: EFX) (23.7%).
CAPS member gameguru elaborates on the bargain opportunity:
[Portfolio Recovery] got taken out behind the woodshed and shot. Repeatedly. ... At this level, the company could pretty much shutter its doors, run off existing collections, and still be worth every penny of the share price. Debt collection isn't going away, no matter how much we may dislike those who do it. This is a long-term cash machine on sale.
What do you think about Portfolio Recovery, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!
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At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of and writing puts on Portfolio Recovery. 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 Fool's disclosure policy always gets a perfect score.