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What: Encore Capital Group
So what: Compared to the year-ago quarter, revenue grew 22%, operating income grew 66%, and EPS grew 65%. Encore also beefed up its balance sheet, expanding its revolving credit facility and taking advantage of current low interest rates with the issuance of seven-year senior secured debt.
Now what: This consumer debt recovery firm is likely benefiting from the improved economy. With the consumer and economy generally forecast to strengthen further in 2011, Encore could continue to deliver strong results. At a P/E ratio of 11.8 times, it appears attractively valued relative to its consumer finance peer group, which is trading at a P/E ratio of 16.0 times.
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