Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

Sluggish Collections As PRA Group Begins A New Era

Receivables collection specialist PRA Group (NASDAQ:PRAA) (formerly known as Portfolio Recovery Associates) continues to do reasonably well in a more challenging environment. Concerns about new regulatory standards have shrunk the supply of charge-offs available for purchase, while management's decision to expand its legal collection efforts continues to require accelerated spending ahead of revenue. On a more positive note, though, the Aktiv deal is done and the company's collections estimates continue to increase for recent vintages. Although the slower pace of call center collections is a concern, PRA Group continues to offer worthwhile upside at these levels.

Second Quarter Results Missed, But Not By A Lot

For a company that used to routinely report beat-and-raise quarters, PRA Group's...

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