Trade-Ideas: Encore Capital Group (ECPG) Is Today's New Lifetime High Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Encore Capital Group ( ECPG) as a new lifetime high 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 $10.5 million.
  • ECPG has traded 203,643 shares today.
  • ECPG is trading at a new lifetime high.

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More details on ECPG:

Encore Capital Group, Inc. provides debt management and recovery solutions for consumers and property owners in a range of assets primarily in the United States. The company conducts its operations through two segments, which include Portfolio Purchasing and Recovery, and Tax Lien Transfer. ECPG has a PE ratio of 16.3. Currently there are 4 analysts that rate Encore Capital Group a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Encore Capital Group has been 258,300 shares per day over the past 30 days. Encore Capital Group has a market cap of $1.2 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.89 and a short float of 25.5% with 27.05 days to cover. Shares are up 50.9% year to date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • ECPG's revenue growth has slightly outpaced the industry average of 2.1%. Since the same quarter one year prior, revenues rose by 11.0%. 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.
  • Compared to its closing price of one year ago, ECPG's share price has jumped by 81.44%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ECPG should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • ENCORE CAPITAL GROUP INC's earnings per share declined by 40.5% in the most recent quarter compared to 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 $3.05 versus $2.37 in the prior year. This year, the market expects an improvement in earnings ($3.65 versus $3.05).
  • The gross profit margin for ENCORE CAPITAL GROUP INC is rather high; currently it is at 69.45%. Regardless of ECPG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 6.99% trails the industry average.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Consumer Finance industry and the overall market on the basis of return on equity, ENCORE CAPITAL GROUP INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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