Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why Portfolio Recovery Associates Shares Popped

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 (Nasdaq: PRAA  ) , a company that collects and manages portfolios of defaulted consumer receivables (as its name implies), spiked 10.5% earlier in the trading day after reporting better-than-expected first-quarter results.

So what: For the quarter, Portfolio Recovery highlighted a 25% jump in revenue to $140.1 million due to 31% increase in cash collections. Overall profit clocked in at $1.47, 10% higher than the year earlier. This compared favorably to Wall Street's EPS estimate of just $1.32 with revenue also coming in higher than expected. The biggest boost to the company's bottom line was its move into legal collections, which saw cash collections increase by 42% over last year.

Now what: No one likes a debt collector, but collection management services often make for very sound businesses. With a five-year expected growth rate of 14% and the company trading at just nine times forward earnings, it's not unreasonable to expect that its stock could continue to head higher.

Craving more input? Start by adding Portfolio Recovery Associates to your free and personalized watchlist so you can keep up on the latest news with the stock.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

The Motley Fool owns shares of Portfolio Recovery Associates. Motley Fool newsletter services have recommended buying shares of, and writing puts on, Portfolio Recovery Associates. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.

Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1882325, ~/Articles/ArticleHandler.aspx, 10/21/2016 5:18:27 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 8 hours ago Sponsored by:
DOW 18,162.35 -40.27 -0.22%
S&P 500 2,141.34 -2.95 -0.14%
NASD 5,241.83 -4.58 -0.09%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/20/2016 4:00 PM
PRAA $32.05 Down -0.95 -2.88%
PRA Group CAPS Rating: *****