While not an unqualified “Buy! Buy! Buy!” — some analysis from Smallcap Network shows Portfolio Recovery Associates (PRAA), Asset Acceptance Capital (AACC) and Encore Capital Group (ECPG) as “strong performers.”

But, Smallcap cautions, “Investors will still need a stomach for risk as all three of these stocks could face strong headwinds from the government or the economy.”

Explicitly, those risks are:

  • Increased government scrutiny of the debt collection industry itself

However, as I suggested up top, those risks are mitigated by some encouraging news:

Portfolio Recovery Associates Just Surged After Reporting Earnings
As Smallcap reports, “Portfolio Recovery Associates surged 10.23% to $73.48…for a market cap of $1.26 billion.”

Asset Acceptance Capital Has Also Reported Solid Earnings
Smallcap: “For 1Q2012, Asset Acceptance Capital has reported that revenues rose 22.7% year over year to $61.8 million while net income rose from $1.1 million to $5.4 million.”

Encore Capital Group Will Report Earnings Later Today After the Market Closes
insideARM.com: “San Diego-based Encore Capital Group, Inc.,  reported net income of $11.4 million, or $0.44 per share, for the first quarter of 2012, down 17 percent from the same quarter of 2011.”


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