Trade-Ideas LLC identified

Encore Capital Group

(

ECPG

) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Encore Capital Group as such a stock due to the following factors:

  • ECPG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $17.1 million.
  • ECPG has traded 65,229 shares today.
  • ECPG is trading at 5.07 times the normal volume for the stock at this time of day.
  • ECPG is trading at a new high 4.02% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on ECPG:

Encore Capital Group, Inc., a specialty finance company, together with its subsidiaries, 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. ECPG has a PE ratio of 6. Currently there are 5 analysts that rate Encore Capital Group a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Encore Capital Group has been 415,600 shares per day over the past 30 days. Encore Capital Group has a market cap of $419.5 million and is part of the financial sector and financial services industry. The stock has a beta of 1.30 and a short float of 47.6% with 10.77 days to cover. Shares are down 32.4% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Encore Capital Group as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and generally higher debt management risk.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 4.6%. Since the same quarter one year prior, revenues slightly increased by 8.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • ENCORE CAPITAL GROUP INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ENCORE CAPITAL GROUP INC increased its bottom line by earning $3.83 versus $2.93 in the prior year. This year, the market expects an improvement in earnings ($5.20 versus $3.83).
  • Net operating cash flow has significantly decreased to $15.97 million or 73.89% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 57.86%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 138.73% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.

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