Trade-Ideas LLC identified

Encore Capital Group

(

ECPG

) as a "dead cat bounce" (down big yesterday but up big today) 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 $16.4 million.
  • ECPG has traded 74,411 shares today.
  • ECPG is up 6.1% today.
  • ECPG was down 13.9% yesterday.

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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 1. Currently there are 7 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 249,100 shares per day over the past 30 days. Encore Capital Group has a market cap of $1.0 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.16 and a short float of 49.2% with 21.29 days to cover. Shares are down 20.3% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Encore Capital Group as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, attractive valuation levels and expanding profit margins. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

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 slightly increased by 7.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • ENCORE CAPITAL GROUP INC has improved earnings per share by 19.8% 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, 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 ($5.17 versus $3.83).
  • 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 17.4% when compared to the same quarter one year prior, going from $23.56 million to $27.66 million.
  • The gross profit margin for ENCORE CAPITAL GROUP INC is rather high; currently it is at 68.81%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 9.52% trails the industry average.

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