First of all, I saw this stock some months back and have not posted this as it has not gotten into the most advancing lists. Second, I have just purchased 150 shares of this stock. I always try to let you know when I own a stock or not, and this one I have purchased. Lastly, as I continue to emphasize, I will share with you my thinking on this company. Please consult with your own investment advisor before making any investment decisions based on anything you may read here...I am not an investment advisor but rather a passionate investment amateur!
O.K., enough with the serious stuff, Portfolio Recover Associates, Inc. (PRAA), according to money.cnn.com, "...is a full-service provider of outsourced receivables management who purchases, collects and manages portfolios of defaulted consumer receivables." (If we get through the jargon, they sound like a bill-collector to me!) They reported their earnings yesterday and the stock is making a nice move today trading as I write at $26.93 up $3.33 or 14.11% on the day.
According to Yahoo.com, as reported on MARKET WIRE on October 27, 2003, third quarter results for the quarter ended September 30, 2003, was quite good. Net income for the quarter was $5.5 million or $.35/share compared to $3.2 million or $.27/share last year. Total revenue for the quarter rose to $22.2 million in the third quarter of 2003 from $15.2 million in the same period last year.
Looking at Morningstar.com, we find that revenues have grown from $7 million in 1998, $12 million in 1999, $19 million in 2000, $32 million in 2001, $56 million in 2002, and extrapolating the current quarter would get us over $80 million in 2003.
Free cash flow the last few years has improved nicely from $2 million in 2000, $5 million in 2001, $21 million in 2002.
The balance sheet is excellent with $17.9 million in cash, more than adequate to cover the current liabilities of $5.9 million and long-term liabilities of $1.8 million combined. In addition, they also have $65.5 million in other current assets per Morningstar.com.
Checking Yahoo again for some statistics, we find that the market cap of this company is $406.21 Million, the trailing p/e is quite reasonable at 19.69, the PEG ratio is also nice at 0.94. However, price/sales a bit rich at 5.04.
PRAA has 15.08 million shares outstanding with 13.40 million of them that float. Currently there are 3.60 million shares out SHORT...a HUGE amount with a short ratio of 18.674...meaning it would take 18+ days of average trading volume for the shorts to cover their borrowed shares. This figure was updated on 10/8/03 per Yahoo. Also, the short interest is up from 2.70 million last month. Either the shorts know something I don't see...or they are in for one heck of a squeeze. PRAA does not pay a dividend.
As you can see I like this stock and have purchased 150 shares. This must be a bit of a volatile issue as Fidelity insisted on 100% margin equity...that is NO borrowing allowed to purchase this stock. I would rather not recommend after purchasing, but when I have done this, as this time, I let you know!
Thanks again for stopping by. Please discuss this and all stocks on this site with your own investment advisor prior to making any investment decisions based on what I write here!
If you have any questions, please write me at bobsadviceforstocks@lycos.com
Bob