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$39.88 -3.94 (-8.99%)
10/6/2008 4:00 PM

Portfolio Recovery Associates, Inc. (PRAA)

CAPS Rating:
*****

A full-service provider of outsourced receivables management and related services. The Company's primary business is the purchase, collection and management of portfolios of defaulted consumer receivables.

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Recs

19

Avatar ctmedic00 (99.97) Submitted: 3/19/07 4:36 PM : Outperform Start Price: $42.86 PRAA Score: 20.08

I really like this company especially in the current economy. Consumer debt is at an all time high, the savings rate is zero and the reason it's zero is the market and home ATM. It would appear that both sources of spending are slowing and the housing market is about done. Combine this with tightening of underwriting (reducing the ability to get cash out of the home) and we have the potential for people defaulting on various loans. When they do PRAA will be there to pick up the debt at a discount and bring home the bacon. Look at the ratios here P/E of 16.25 against the industry of 21.62 and a beta of .61 while the industry shows 1.31. Sales growth rate of 24.50% against the industry of 12.72%. ROA of 16.44, ROI of 17.76 and ROE of 21.42. This stock is on the move. I'm in and riding this elevator to the top floor. Sure it's a tough business... getting money out of people who either don't have it or don't want to give it up. Yikes I would never be able to do that. However these guys can. I believe in the future growth of this company and I like it's chances in this industry.

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Avatar MrMighty (88.80) Submitted: 5/30/07 5:33 PM

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Well, they've only got half the job you envision -- reading through the annual report, it looks like they go after the people who don't want to give it up and leave those who don't have it alone.

The way they work, they can squeeze enough out of those who have the ability to pay to be profitable. I agree they should continue to be successful, and am happy to be a shareholder. I just wish I had more to invest here.

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