5-Star Stocks Poised to Pop: Portfolio Recovery

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 (Nasdaq: PRAA  ) has earned a coveted five-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 $1.2 billion
Industry Business services
Trailing-12-Month Revenue $458.9 million
Management Co-Founder/Chairman/CEO Steven Fredrickson
Co-Founder/CFO Kevin Stevenson
Return on Equity (Average, Past 3 Years) 16.7%
Cash/Debt $26.7 million / $221.2 million
Competitors Asta Funding
Encore Capital Group
NCO Group

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 97% of the 3,137 members who have rated Portfolio Recovery believe the stock will outperform the S&P 500 going forward.

Just two weeks ago, one of those Fools, MHenage, highlighted several of Portfolio Recovery's positives:

Growing company in an industry no one seems to want. History of beating earnings estimates, decent balance sheet. Company has tons of free cash flow. Meets 6 of 6 tests to make it a Peter Lynch stock: industry domination, good cash flow, good balance sheet, cheap relative to future earnings, good earnings growth, unlikable industry.

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!

Want to see how well (or not so well) the stocks in this series are performing? Follow the new TrackPoisedTo CAPS account.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Portfolio Recovery. Motley Fool newsletter services have recommended buying shares of and writing puts in 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.


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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.

  • Report this Comment On March 09, 2012, at 8:52 PM, DebtLaw wrote:

    Although PRAA is diversifying their business lines, I would pay more attention to the quality of PRAA's earnings before recommending that investors ante up on PRAA. Portfolio Recovery's portfolio purchase price ($ paid as a percentage of account balances) plunged recently indicating that Portfolio Recovery invested heavily in time barred (probably zombie) accounts. (Zombies are accounts which were charged off at least seven years ago and, therefore, are too old to even appear on the consumer's credit report). Portfolio Recovery appears to be aggressively attempting to collect the zombie accounts and may be vulnerable to government actions such as the recent suit against Asset Acceptance for aggressively collecting time barred accounts. For more information about consumer lawsuits against Portfolio Recovery visit : http://www.fdcpa.me/portfolio-recoverys-zombie-debts/

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