Fox-Pitt Starts Coverage of Asset Acceptance, Portfolio Recovery

Research and analysis firm Fox-Pitt Kelton (FPK) started their coverage of the accounts receivable management industry Friday with a "marketweight" rating, saying rising debt levels of the American consumer will keep the sector's growth intact.

FPK also initiated coverage of two publicly traded companies in the ARM industry: Asset Acceptance Capital Corp (Nasdaq: AACC) and Portfolio Recovery Associates (Nasdaq: PRAA). FPK assigned Asset Acceptance an "underperform" rating with a price target of $5 and gave Portfolio Recovery an "outperform" rating and a price target of $50.

Analyst Bill Carcache said Portfolio Recovery shares are relatively undervalued, while the Asset Acceptance stock is overvalued.

Shares of Asset Acceptance were down about 5 percent in early trading Monday to $10.30. Portfolio Recovery’s shares were trading about 1.3 percent lower at $41.75.