Long/short equity, medium-term horizon, value, growth

Encore Capital Group May Have Risen By 250% Over 5 Years, But It Remains Underappreciated

Providing debt recovery solutions may not be a glamorous business, but one look at the excellent stock market returns of some of these firms may just tempt you. Encore Capital Group (NASDAQ:ECPG) has risen by 250%, whilst the S&P 500 has just risen by a pitiful 21%. Looking at this meteoric rise, you may be forgiven that a correction is due for this stock; however, a closer inspection of the valuations and growth prospects may suggest that this stock has much further to go.

ECPG data by YCharts

How does the debt recovery industry operate?

Debt recovery firms such as Encore Capital Group purchase portfolios of primarily charged-off credit card debt, defaulted consumer loans, and receivables subject to...

Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
"In just the first month of using PRO, I used it to generate two ideas which were actionable for me. As a result of these two positions, I have earned more than 20 times the annual subscription costs for PRO."Michael Yagemann, Greenbridge Capital
"I am pleasantly surprised with the scope of small and mid-cap coverage PRO offers. You can't find that any where else."Patrick Rice, Mainstay Capital Management
You may cancel at any time for any reason, and receive a prompt refund for membership on months paid and not used (max. 6 months). Details