Perilous Reversal Stock: PRA Group (PRAA)

Trade-Ideas LLC identified PRA Group (PRAA) as a "perilous reversal" (up big yesterday but down big today) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

PRA Group

(

PRAA

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified PRA Group as such a stock due to the following factors:

  • PRAA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $39.1 million.
  • PRAA has traded 119,803 shares today.
  • PRAA is down 3.6% today.
  • PRAA was up 5.3% yesterday.

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More details on PRAA:

PRA Group, Inc., a financial and business service company, engages in the purchase, collection, and management of portfolios of defaulted consumer receivables in North America and Europe. PRAA has a PE ratio of 12. Currently there are 4 analysts that rate PRA Group a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for PRA Group has been 507,700 shares per day over the past 30 days. PRA Group has a market cap of $2.4 billion and is part of the services sector and diversified services industry. The stock has a beta of 0.78 and a short float of 31.5% with 17.19 days to cover. Shares are down 9.6% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates PRA Group as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, notable return on equity and expanding profit margins. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 5.4%. Since the same quarter one year prior, revenues rose by 20.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • PRA GROUP INC has improved earnings per share by 43.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, PRA GROUP INC increased its bottom line by earning $3.49 versus $3.45 in the prior year. This year, the market expects an improvement in earnings ($4.63 versus $3.49).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Consumer Finance industry. The net income increased by 37.1% when compared to the same quarter one year prior, rising from $37.51 million to $51.43 million.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Consumer Finance industry and the overall market, PRA GROUP INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • 39.54% is the gross profit margin for PRA GROUP INC which we consider to be strong. Regardless of PRAA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PRAA's net profit margin of 21.68% compares favorably to the industry average.

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