Back to top

Analyst Blog

Zacks Equity Research

ECPG Announces New Buyback Program

PRAA ECPG

 ZacksTrade Now

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Recently, the board of Encore Capital Group Inc. (ECPG - Snapshot Report) has authorized a new share repurchase program, under which the company can spend up to $50 million for share buybacks. The authorization is expected to be fully utilized by the end of 2013.

According to the new buyback plan, the shares can be repurchased from the open market, through private or block transactions or using any other buyback process. However, the buyback is dependent on market conditions, business-related concerns as well as appropriate regulations.

The new repurchase program is consistent with Encore Capital’s policy of maximizing returns to shareholders through efficient deployment of capital. The company’s strong financial results and impressive asset position allow it to utilize market conditions to enhance shareholders’ returns.

Encore Capital’s ability to invest in market opportunities to boost shareholder value has been further enhanced by its new credit facility that has augmented the company’s borrowing capacity. Last week, the company announced the amendment of its old $555.5 million revolving credit facility, which was set to expire by the end of 2013.

The amended facility comprises a $425 million revolving credit facility valid for 5 years along with a $100 million term note due in November 2017 and a $50 million term note due in November 2015. Moreover, Encore Capital has the option of increasing the borrowing limit by $200 million using the accordion feature of credit facility. Thus, the company has ample financial flexibility to engage in share repurchases.

Encore Capital’s peer in the receivables management and recovery business – Portfolio Recovery Associates Inc. (PRAA - Analyst Report) – also engages in share repurchases to boost shareholder value. The company had authorized a $100 million share repurchase program in February this year. Consequently, the company repurchased 331,449 shares at an average price of $68.56 during the first nine months of 2012.

Encore Capital currently carries a Zacks #3 Rank (short-term Hold). We have a long-term ‘Neutral’ recommendation on the stock.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
BITAUTO HOLD BITA 33.21 +7.92%
E COMMERCE C DANG 12.50 +4.52%
E*TRADE FINA ETFC 21.23 +4.25%
BIO PATH HOL BPTH 2.87 +4.18%
DIXIE GROUP DXYN 14.58 +3.70%