ECPG
Encore Capital Group Inc.
Finance/Real Estate
04/07/2014
Presented
| Date | 04/02/2014 |
| Price | $46.23 |
| Market Cap | $1.18B |
| Ent Value | $2.93B |
| P/E Ratio | 10.62x |
| Book Value | $24.15 |
| Div Yield | N/A |
| Shares O/S | 25.48M |
| Ave Daily Vol | 310,000 |
| Short Int | 24.37% |
Current
| Price | $45.31 |
| Market Cap | $1.07B |
| Encore Capital Group, Inc., a specialty finance company, provides debt recovery solutions for consumers and property owners across a range of financial assets worldwide. The company operates in two segments, Portfolio Purchasing and Recovery, and Tax Liens. The Portfolio Purchasing and Recovery segment purchases portfolios of defaulted consumer receivables at deep discounts to face value, as well as manage them by working with individuals as they repay their obligations. This segment is also involved in the debt management of portfolios consisting of higher balance and semi-performing accounts; and the management of non-performing loans. In addition, it provides portfolio management services to banks for non-performing loans; financial solutions to individuals who have previously defaulted on their obligations; payment plan guarantee services to merchants; and loan guarantee services to financial institutions. Further, this segment focuses on consumer non-performing loans, including insolvencies and non-bank receivables. The Tax Liens segment is engaged in the acquisition and servicing of residential and commercial tax liens on real property. This segment assists property owners who are delinquent on their property taxes by paying these taxes on behalf of the property owners in exchange for payment agreements collateralized by a tax lien on the property. It also purchases tax liens directly from taxing authorities. This segment’s property tax liens include Texas tax liens, Nevada tax liens, and tax lien certificates. Encore Capital Group, Inc. was founded in 1998 and is headquartered in San Diego, California. |
Highlights
Encore’s (ECPG) core business is the purchase of charged-off credit card debt for a fraction of face value, and they typically collect a multiple of what was paid over as long as 7 years, said the presenter. The industry is highly fragmented, and he thinks the various concerns surrounding the CFPB’s focus on regulating debt collection activities in the US are overblown, because regulation actually works in ECPG’s favor. The company has scale and deep enough pockets to run systems - and upgrade them – that help them stay in compliance with applicable laws. At 9x the Street’s 2015 EPS estimate, shares are attractively valued. He is long the stock and explained his bullish view on ECPG as follows:
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