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 Encore Capital Group
So what: Encore is essentially being accused of cutting legally required corners to go after debtors, as well as employing unlawful debt collection tactics, so it's no surprise that Mr. Market is taking the charges quite seriously. In fact, the attorney general will try to establish a restitution fund for all the money that Encore illegally collected from Texans, seek civil penalties of up to $20,000 per violation, and enforce all the penalties that apply under the Texas Finance Code for law-violating third-party debt collectors.
Now what: I'd be cautious about jumping into the stock right now. Only time will tell how this all plays out, of course, but given Encore's whopping 80% return over the past nine months, I just can't see investors waiting around too long to finally cash out. Of course, for more speculative Fools looking for a high dose of uncertainty, Encore seems like an ideally potent candidate at this point.
Interested in more info on Encore? Add it to your watchlist.