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.
Continue here:
Execution And Purchasing Increasingly Important To PRA Group
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