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 Portfolio Recovery Associates ( PRAA) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Portfolio Recovery Associates 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 $25.5 million.
- PRAA has traded 641,623 shares today.
- PRAA traded in a range 467.4% of the normal price range with a price range of $7.07.
- PRAA traded above its daily resistance level (quality: 105 days, meaning that the stock is crossing a resistance level set by the last 105 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher. EXCLUSIVE OFFER: Get the inside scoop on opportunities in PRAA with the Ticky from Trade-Ideas. See the FREE profile for PRAA NOW at Trade-Ideas More details on PRAA: Portfolio Recovery Associates, Inc., a financial and business service company, engages in the purchase, collection, and management of portfolios of defaulted consumer receivables in the United States and the United Kingdom. PRAA has a PE ratio of 15.8. Currently there are 4 analysts that rate Portfolio Recovery Associates a buy, no analysts rate it a sell, and 2 rate it a hold. The average volume for Portfolio Recovery Associates has been 508,400 shares per day over the past 30 days. Portfolio Recovery Associates has a market cap of $2.5 billion and is part of the services sector and diversified services industry. The stock has a beta of 1.25 and a short float of 20.1% with 23.31 days to cover. Shares are down 3.6% year-to-date as of the close of trading on Wednesday. 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 Portfolio Recovery Associates as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results. Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 3.2%. Since the same quarter one year prior, revenues rose by 31.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.55, is low and is below the industry average, implying that there has been successful management of debt levels.
- PORTFOLIO RECOVRY ASSOC INC has improved earnings per share by 42.4% 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, PORTFOLIO RECOVRY ASSOC INC increased its bottom line by earning $2.47 versus $1.95 in the prior year. This year, the market expects an improvement in earnings ($3.45 versus $2.47).
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Consumer Finance industry average. The net income increased by 42.1% when compared to the same quarter one year prior, rising from $33.31 million to $47.34 million.
- 45.32% is the gross profit margin for PORTFOLIO RECOVRY ASSOC INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 23.93% is above that of the industry average.
- You can view the full Portfolio Recovery Associates Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.