PRA GROUP (PRAA): CALL TODAY - NEW BEST IDEA SHORT

Takeaway: Please join us TODAY at 11 a.m. EST for our latest Best Ideas call on shares of PRA Group (PRAA).

PRA GROUP (PRAA): CALL TODAY - NEW BEST IDEA SHORT  - PRA roller coaster

We will be hosting a call Today at 11:00am EST to present a new name we've added to our Best Ideas List - PRA Group, Inc. (PRAA) - as a short

KEY POINTS 

  • Supply/Demand Headwinds: The market for buying defaulted receivables is especially unfavorable. Demand for paper has exceeded supply for a few years now, mirroring the environment last seen from 2005-2007 when shares of PRAA tumbled ~70%.
  • Growing Debt: Leverage at the company has risen quickly in the wake of the Activ deal.  
  • Insiders Dumping: Widespread insider selling suggests that insiders see similar intermediate/longer-term headwinds.
  • History's Guide: Our analysis of the interplay between labor markets, terminal IRRs and pre-tax margins will shed light on what to expect fundamentally from a timing standpoint.
  • Regulatory Pressure: The CFPB is expected to set new rules for debt collectors in 2016.
  • Current Value Unsustainable: The ERC less cost to collect and taxes is currently ~$400mn below the net debt of the company.

CALL DETAILS

  • Toll Free Number:
  • Conference Code: 13622076#
  • Materials: CLICK HERE (Materials will be available approximately one hour prior to the start of the call)

Joshua Steiner, CFA

Jonathan Casteleyn, CFA, CMT