Feasting on the Economic Fallout → New Best Idea Longs | $ECPG & $PRAA

Josh Steiner, CFA

Drago Malesevic, CFA

Takeaway: Battered by the historic market selloff of the past month, we view the long case for the debt collectors as highly compelling."

Our Financial analysts Josh Steiner and Drago Malesevic are hosting a call Friday 3/27/20 at 10:00am EST. If you are an institutional investor interested in accessing this call or related research email sales@hedgeye.com.

The bullish account of the debt collector story has always been that increasing charge-off supply will give way to improved pricing, and that Encore Capital Group (ECPG) and PRA Group (PRAA), with their easy access to capital and global reach, will be best positioned to act and build up a richer book of business.

Notwithstanding the near-term harm to current collection efforts, the global economic shutdown caused by the COVID-19 pandemic marks a definite turn in the credit cycle and the beginnings of the next great paper harvest.

Fundamentals for both ECPG and PRAA have likely struck a bottom based on our analysis of the latest vintage-level data
We now see a meaningful earnings growth path ahead for both companies
Battered by the historic market selloff of the past month, we view the long case for the debt collectors as highly compelling in the wake of COVID-19

In our call, we will greatly expand on this thinking and discuss how to best approach this idea amid persisting market volatility and systematic selling in both names.

If you are an institutional investor interested in accessing this call or related research email sales@hedgeye.com.

Feasting on the Economic Fallout → New Best Idea Longs | $ECPG & $PRAA

EVENT | Energy Black Book (4/2)

The Pitch: 6 Analysts. 6 Stock Ideas. 60 Minutes

The Pitch: 6 Analysts. 6 Stock Ideas. 60 Minutes

FLASHBACK | 2 Retail Short Calls “Don't Have a Snot’s Worth of Chance” $ADDYY $AS

FLASHBACK | "Spectacular Value Destruction": Industrials Short Call $PLUG Down -50% in 2024

What 80-90% of Investors Don't Understand About DraftKings' Drawdown | $DKNG

WEBCAST | Rooms Where It Happened: Lessons from a Life in Government

Cartoon of the Day: Loose Lips Sink Ships

TERM OF THE DAY: Convexity

CHART OF THE DAY: Ride Your Winners

[FREE ACCESS] HedgAI Signals: 4/10/2024 (Long 30yr, HYG)

CHART OF THE DAY: How #TheMachine Handles Factor Exposures

Cartoon of the Day: Air Drop

The Firm That Called 'The Crash of 2020'

Oil Price War Off-Ramps Seen As Trump Pivots On Lower Prices

A Sneak Peek → The Call @ Hedgeye (3/20/20)

Sign up for free: Hedgeye's Market Brief