Wednesday, January 7, 2015

Seeking Alpha: Execution And Purchasing Increasingly Important To PRA Group

PRA Group (NASDAQ:PRAA), the receivables collection company once known as Portfolio Recovery Associates, didn't have the best 2014 as concerns about revenue quality and the company's ability to replenish its store of receivables weighed on the shares after each earnings report. While the stock was in the black for the year (and matched the S&P MidCap 400), it trailed the S&P 500 and doesn't exactly trade at an undemanding valuation.

I'm not bearish on PRA Group, but I do believe the company has to re-earn its benefit of the doubt and there is less margin for error than in the past. The expected return of major sellers of charged-off debt in 2015 would be a boon, but emerging guidelines for the industry are still foggy. What's more, while the company has made strides with its collections efficiency, it is an increasingly large fish in its pond and may find its own size to be a formidable obstacle to maintaining historical growth rates.

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Execution And Purchasing Increasingly Important To PRA Group

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