What makes Portfolio Recovery so tasty?
I would think that the 15% long-term growth that analysts are estimating would be right at the top of the list. But let’s be honest here; 15% is no small hurdle, so a little skepticism may be in order when we consider whether Portfolio Recovery can really pull it off. The biggest knock we can put on the company is its recent results. For obvious reasons, the financial crisis and recession have made collecting on defaulted debt a bit more challenging. For 2008, Portfolio Recovery saw its earnings per share drop by 3%, while the first nine months of this year have shown a 9% dip. But as my fellow Fool Morgan Housel pointed out in his coverage of Portfolio Recovery’s earnings report, patience is a virtue, particularly when we’re looking at Portfolio Recovery’s business. Its rocket fuel is defaulted debt that credit providers are looking to unload at a discount. Fortunately for the company, there is a more-than-ample supply of such distressed debt. The issue, though, is that the time horiz
