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Next weekend they will be playing the Super Bowl, but the one player who is missing on the field is $$$MR. MARKET$$$. When it comes to the game of the stock market, $$$MR. MARKET$$$ should already be in the Hall of Fame. Tom Brady can’t match his stock picking acumen or his bench press.
Today I sold ECPG at 68.39. That’s a 15.8% gain over his purchase price of 59.05. That’s a 15.8% gain in less than 3 months. That’s an annualized gain of 70%. Over the same period, the S&P 500 declined 4%.
That means when the stock market goes down, $$$MR. MARKET$$$ picks stocks that go up! What a joke! Picking winning stocks is so easy. $$$MR. MARKET$$$ has been doing it for decades.
Did you buy ECPG? You? YOU? YOU??? That makes 35 consecutive profitable trades of 15% or better! I am HUGE! Bring me your finest meats and cheeses because I am easily the greatest stock picker ever!
How HUGE is $$$MR. MARKET$$$?
The only thing left to do is to pick more winning stocks. But first, $$$MR. MARKET$$$ wants to hear about how much you enjoy receiving these stock picks. Let’s hear it.
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11-17-2021, 09:26 PM#1
Administrator
Default ECPG ==> The Thunder Winner
($$$MR. MARKET$$$ is a proprietary investor and does not provide individual financial advice. The stocks mentioned on this forum do not represent individual buy or sell recommendations and should not be viewed as such. Individual investors should consider speaking with a professional investment adviser before making any investment decisions.)
So you go to a party and drink a thousand beers. You come home and are bored so you go in front of your computer, whip out your credit cards and buy everything you see. Rutro. That’s called outkicking your coverage. You spend more money than you really have and now you have a credit issue. Who you gonna call?
Today I bought Encore Capital Group (ECPG) at 59.05. I will sell it in 4 to 6 weeks at 68.21. Here’s why I like ECPG. First of all, I really love this chart:
ECPG stock is up 87% in the last 52 weeks, yet its PE is only 6. That’s right, 6! This company is so cheap it makes Filene’s Basement blush. There is no way its stock price can drop, it’s so cheap. It can only go up! During five years of share price growth, Encore Capital Group achieved compound earnings per share (EPS) growth of 27% per year. This EPS growth is higher than the 18% average annual increase in the share price. It just keeps getting cheaper and cheaper. ECPG investors should be aware of an increase in enthusiasm from smart money of late. Encore was in 19 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 20. I see what you did here!
Encore Capital Group is a global specialty finance company with operations and investments across North America, Europe, Asia and Latin America. Through its subsidiaries around the globe, Encore purchases or services portfolios of receivables from major banks, credit unions and utility providers. Customer service and regulatory compliance are at the heart of their business and are implemented through their collections strategy.
Encore Capital believes that consumers are at the heart of everything they do. Their mission is to create pathways to economic freedom for consumers, and they do that by listening to the consumer’s needs and working with them in an empathetic, flexible way that allows them to resolve their debt obligations with a plan that truly works for them. They understand that everyone intends to pay off their loans, but difficult situations do happen to a small portion of borrowers. That’s why companies like Encore exist. Their business is to help consumers recover financially — by understanding their situation and tailoring a payment arrangement that works for them. As a result, they help consumers restore their credit profile, which may give them access to the credit they need to buy that home or car or pay for college. By doing that Encore also returns capital to banks and lenders so they can continue lending in a way that’s affordable and accessible to people. As a result, Encore plays a vital role supporting the credit ecosystem in multiple countries.
This is a necessary service and Encore does it well. Their Q3 performance was driven by strong collections. They are so confident in their own business that they repurchased $88M of ECPG shares over the first three quarters of 2021, which includes $41M in Q3 alone. Their collections of $567M were 5% higher than Q3 last year. The company believes that the explosion in bank credit originated by the pandemic will result in a better market for bad debt in upcoming years. The recent expansion of global credit will result in higher non-performing loans outstanding. That makes sense. Encore Capital will benefit from better deals, higher revenues, and higher ROE thanks to the rise of non-performing loans outstanding. That makes sense. Management also knows that the real difference is made by their ability to properly value the debt they buy through sophisticated models. They purchase receivables based on robust, account-level valuation methods and employ proprietary statistical and behavioral models across their U.S. operations.
In the last four years the company grew revenues at 8.5% CAGR, net income margin passed from 6% in 2018 to 19% in 2020 and last year ROE was about 30%. The best is yet to come. People needed money during the pandemic, and so turned to banks to get new loans. More loans outstanding means more bad debt. More bad debt means more collectables for Encore. Easy Peasy. The big banks treat Encore as a trusted partner because they can count on them to buy back their bad loans. Smaller competitors looking to crack this market have no chance. (Cue up Vince McMahon walking – no chance in hell!).
Encore’s experience in this spance means they understand how much the debt holders are willing to cough up in order to get their bills paid off. They have quantified all strata of these debt holders so they know the expectations of how long it will take them to get their money back. The secret sauce is in their data analytics. People’s behavior can be quantified and their patterns repeat themselves.
Revenue growth rate is expected to continue and get better each year. If they can maintain the 8.5% CAGR, at these PE levels the stock just HAS to go up. Even a PE multiple of 10 will mean that the stock will reach the high 90’s, well past my target price. Last quarter shows that they are already on the hunt. Encore came out with quarterly earnings of $2.66 per share, beating the ANAL-yst estimate of $2.12 per share. This compares to earnings of $2.31 per share a year ago. This quarterly report represents an earnings surprise of 25.47%. A quarter ago, it was expected that this provider of debt-management and recovery services would post earnings of $2.09 per share when it actually produced earnings of $3.30, delivering a surprise of 57.89%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Just ask Gomer Pyle. Surprise Surprise Surprise!
What does the boss, Ashish Masih, have to say?
“Despite a strong share performance this year, which is up 37% in 2021, we believe we are still undervalued relative to our peers. Our business has continued to generate significant cash and our leverage is now below our target range. Our strategy of focusing on the right markets, executing well to deliver strong returns on our portfolio purchases and maintaining a strong balance sheet are key drivers of our success. This strong track record of success enabled us to begin returning capital to shareholders earlier in the year, and is now helping us accelerate it via the $300 million tender offer. Looking ahead, we intend to maintain a strong financial position that will enable us to increase portfolio purchases when supply starts rising again, as it does in every credit cycle. This will drive Encore's continued success. Thanks for taking the time to join us, and we look forward to providing a fourth quarter and full year 2021 results in February.”
What to do for an Encore? I’ll just take my winnings on this stock pick and run up my credit card!
I am HUGE!
$$$MR. MARKET$$$
Last edited by mrmarket; 01-07-2022 at 10:48 AM.
Today I sold ECPG at 68.39. That’s a 15.8% gain over his purchase price of 59.05. That’s a 15.8% gain in less than 3 months. That’s an annualized gain of 70%. Over the same period, the S&P 500 declined 4%.
That means when the stock market goes down, $$$MR. MARKET$$$ picks stocks that go up! What a joke! Picking winning stocks is so easy. $$$MR. MARKET$$$ has been doing it for decades.
Did you buy ECPG? You? YOU? YOU??? That makes 35 consecutive profitable trades of 15% or better! I am HUGE! Bring me your finest meats and cheeses because I am easily the greatest stock picker ever!
How HUGE is $$$MR. MARKET$$$?
- He is allowed to talk about the fight club.
- He once won the Tour-de-France but was disqualified for riding a unicycle.
- He once won the world series of poker using UNO cards.
- He has inside joked with people he’s never met.
The only thing left to do is to pick more winning stocks. But first, $$$MR. MARKET$$$ wants to hear about how much you enjoy receiving these stock picks. Let’s hear it.
================================================== ===============================
11-17-2021, 09:26 PM#1
Administrator
Default ECPG ==> The Thunder Winner
($$$MR. MARKET$$$ is a proprietary investor and does not provide individual financial advice. The stocks mentioned on this forum do not represent individual buy or sell recommendations and should not be viewed as such. Individual investors should consider speaking with a professional investment adviser before making any investment decisions.)
So you go to a party and drink a thousand beers. You come home and are bored so you go in front of your computer, whip out your credit cards and buy everything you see. Rutro. That’s called outkicking your coverage. You spend more money than you really have and now you have a credit issue. Who you gonna call?
Today I bought Encore Capital Group (ECPG) at 59.05. I will sell it in 4 to 6 weeks at 68.21. Here’s why I like ECPG. First of all, I really love this chart:
ECPG stock is up 87% in the last 52 weeks, yet its PE is only 6. That’s right, 6! This company is so cheap it makes Filene’s Basement blush. There is no way its stock price can drop, it’s so cheap. It can only go up! During five years of share price growth, Encore Capital Group achieved compound earnings per share (EPS) growth of 27% per year. This EPS growth is higher than the 18% average annual increase in the share price. It just keeps getting cheaper and cheaper. ECPG investors should be aware of an increase in enthusiasm from smart money of late. Encore was in 19 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 20. I see what you did here!
Encore Capital Group is a global specialty finance company with operations and investments across North America, Europe, Asia and Latin America. Through its subsidiaries around the globe, Encore purchases or services portfolios of receivables from major banks, credit unions and utility providers. Customer service and regulatory compliance are at the heart of their business and are implemented through their collections strategy.
Encore Capital believes that consumers are at the heart of everything they do. Their mission is to create pathways to economic freedom for consumers, and they do that by listening to the consumer’s needs and working with them in an empathetic, flexible way that allows them to resolve their debt obligations with a plan that truly works for them. They understand that everyone intends to pay off their loans, but difficult situations do happen to a small portion of borrowers. That’s why companies like Encore exist. Their business is to help consumers recover financially — by understanding their situation and tailoring a payment arrangement that works for them. As a result, they help consumers restore their credit profile, which may give them access to the credit they need to buy that home or car or pay for college. By doing that Encore also returns capital to banks and lenders so they can continue lending in a way that’s affordable and accessible to people. As a result, Encore plays a vital role supporting the credit ecosystem in multiple countries.
This is a necessary service and Encore does it well. Their Q3 performance was driven by strong collections. They are so confident in their own business that they repurchased $88M of ECPG shares over the first three quarters of 2021, which includes $41M in Q3 alone. Their collections of $567M were 5% higher than Q3 last year. The company believes that the explosion in bank credit originated by the pandemic will result in a better market for bad debt in upcoming years. The recent expansion of global credit will result in higher non-performing loans outstanding. That makes sense. Encore Capital will benefit from better deals, higher revenues, and higher ROE thanks to the rise of non-performing loans outstanding. That makes sense. Management also knows that the real difference is made by their ability to properly value the debt they buy through sophisticated models. They purchase receivables based on robust, account-level valuation methods and employ proprietary statistical and behavioral models across their U.S. operations.
In the last four years the company grew revenues at 8.5% CAGR, net income margin passed from 6% in 2018 to 19% in 2020 and last year ROE was about 30%. The best is yet to come. People needed money during the pandemic, and so turned to banks to get new loans. More loans outstanding means more bad debt. More bad debt means more collectables for Encore. Easy Peasy. The big banks treat Encore as a trusted partner because they can count on them to buy back their bad loans. Smaller competitors looking to crack this market have no chance. (Cue up Vince McMahon walking – no chance in hell!).
Encore’s experience in this spance means they understand how much the debt holders are willing to cough up in order to get their bills paid off. They have quantified all strata of these debt holders so they know the expectations of how long it will take them to get their money back. The secret sauce is in their data analytics. People’s behavior can be quantified and their patterns repeat themselves.
Revenue growth rate is expected to continue and get better each year. If they can maintain the 8.5% CAGR, at these PE levels the stock just HAS to go up. Even a PE multiple of 10 will mean that the stock will reach the high 90’s, well past my target price. Last quarter shows that they are already on the hunt. Encore came out with quarterly earnings of $2.66 per share, beating the ANAL-yst estimate of $2.12 per share. This compares to earnings of $2.31 per share a year ago. This quarterly report represents an earnings surprise of 25.47%. A quarter ago, it was expected that this provider of debt-management and recovery services would post earnings of $2.09 per share when it actually produced earnings of $3.30, delivering a surprise of 57.89%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Just ask Gomer Pyle. Surprise Surprise Surprise!
What does the boss, Ashish Masih, have to say?
“Despite a strong share performance this year, which is up 37% in 2021, we believe we are still undervalued relative to our peers. Our business has continued to generate significant cash and our leverage is now below our target range. Our strategy of focusing on the right markets, executing well to deliver strong returns on our portfolio purchases and maintaining a strong balance sheet are key drivers of our success. This strong track record of success enabled us to begin returning capital to shareholders earlier in the year, and is now helping us accelerate it via the $300 million tender offer. Looking ahead, we intend to maintain a strong financial position that will enable us to increase portfolio purchases when supply starts rising again, as it does in every credit cycle. This will drive Encore's continued success. Thanks for taking the time to join us, and we look forward to providing a fourth quarter and full year 2021 results in February.”
What to do for an Encore? I’ll just take my winnings on this stock pick and run up my credit card!
I am HUGE!
$$$MR. MARKET$$$
Last edited by mrmarket; 01-07-2022 at 10:48 AM.
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