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Shares of Encore Capital Group, Inc. (ECPG - Snapshot Report) soared to a new 52-week high, touching $44.99 within the first hour of trading on Aug 12. The closing price of this leading provider of debt management and recovery solutions reflected a solid year-to-date return of 43.9%. The trading volume for the session was 0.5 million shares, higher than the average of 0.3 million shares over the last 3 months.

Despite the strong price appreciation, this Zacks Rank #3 (Hold) has plenty of upside left, given its estimate revisions over the past 7 days and expected year-over-year earnings growth of 18.5% for 2013.

Growth Drivers

Impressive second-quarter 2013 results, the acquisition of Asset Acceptance Capital Corp. and purchase of controlling interest in Janus Holdings Luxembourg S.a.r.l., an indirect holding company of Cabot Credit Management were the primary growth drivers for Encore Capital.

On Aug 8, Encore Capital reported second-quarter earnings per share of 85 cents, surpassing the Zacks Consensus Estimate by 4.9%. The better-than-expected results were primarily driven by top-line growth, partially offset by increased operating expenses.

Additionally, Encore Capital has delivered positive earnings surprises in the last 4 quarters with an average beat of 4.1%.

Estimate Revisions Show Strength

For Encore Capital, over the last 7 days, 2 of the 4 estimates for 2013 have been revised upward, raising the Zacks Consensus Estimate by nearly 1% to $3.62 per share. For 2014, 2 of the 4 estimates have moved up, lifting the Zacks Consensus Estimate by about 1% to $4.09 per share over the same time frame.

Some better performing banks include Capital One Financial Corp. (COF - Analyst Report), SLM Corporation (SLM - Analyst Report) and Discover Financial Services (DFS - Analyst Report). All these stocks carry a Zacks Rank #2 (Buy).

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