Is there a reason to drop Encore Capital and buy Bank of New York?
 | By Rifka Kats | Macroaxis Story |
This firm chance of financial distress is now about 48.0 percent. We consider Encore Capital not too volatile. Encore Capital Group secures Sharpe Ratio (or Efficiency) of 0.0097 which denotes the organization had 0.0097% of return per unit of standard deviation over the last 1 month. Our philosophy in predicting volatility of a stock is to use all available market data together with stock specific technical indicators that cannot be diversified away. We have found twenty-one technical indicators for Encore Capital Group which you can use to evaluate future volatility of the firm. Please confirm Encore Capital Group Mean Deviation of 2.29 to check if risk estimate we provide are consistent with the epected return of 0.0301%.
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Reviewed by Gabriel Shpitalnik
Encore Capital Group has beta of 1.31. As market goes up, the company is expected to significantly outperform it. However, if the market returns are negative, Encore Capital will likely underperform. Encore Capital dividends can provide a clue to current valuation of the stock. The firm is not expected to issue dividends this year as it trying to preserve or re-invest any of the funds available for distribution to stakeholders. Now, lets check Encore Capital Current Liabilities. In accordance with recently published financial statements Encore Capital Group has Current Liabilities of 294.24 M. This is 88.33% lower than that of the Financial Services sector, and 64.24% lower than that of Asset Management industry, The Current Liabilities for all stocks is 96.28% higher than Encore Capital.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Encore Capital. Your research has to be compared to or analyzed against Encore Capital's peers to derive any actionable benefits. When done correctly, Encore Capital's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Encore Capital Group.
There are currently many different techniques concerning forecasting the market as a whole as well as predicting future values of individual securities such as Encore Capital Group. Regardless of method or technology, to accurately forecast the stock market is more a matter of luck rather than a particular technique. Nevertheless, trying to predict the stock market accurately is still an essential part of the overall investment decision process. Using different forecasting techniques and comparing the results might improve your chances of accuracy even though unexpected events may often change the market sentiment and impact your forecasting results.
Predictive Modules for Encore Capital
Sophisticated investors, who have witnessed many market ups and downs, anticipate that the market will even out over time. This tendency of Encore Capital's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
How important is Encore Capital's Liquidity
Encore Capital financial leverage refers to using borrowed capital as a funding source to finance Encore Capital Group ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Encore Capital financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Encore Capital's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Encore Capital's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Encore Capital's total debt and its cash.
Encore Capital Gross Profit
Encore Capital Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Encore Capital previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Encore Capital Gross Profit growth over the last 10 years. Please check Encore Capital's gross profit and other fundamental indicators for more details.
Going after Encore Financials
The company reported previous year revenue of 1.36 B. Net Income was 153.68 M with profit before overhead, payroll, taxes, and interest of 1.32 B. The current investor indifference towards the small price fluctuations of Encore Capital Group could raise concerns from investors as the firm closed today at a share price of 33.56 on 0 in volume. The company directors and management did not add any value to Encore Capital investors in October. However, most investors can still diversify their portfolios with Encore Capital Group to hedge your portfolio against high-volatility market scenarios. The stock standard deviation of daily returns for 30 days (very short) investing horizon is currently 3.104. The above-average volatility is mostly attributed to market volatility and speculations regarding some of the upcoming earning calls from Encore Capital partners. Encore Capital discloses 3.65 b in total debt. Encore Capital is selling at 34.01. That is 2.47 percent up. Opened at 34.01. Encore Capital Total Assets Per Share is increasing over the last 5 years. The previous year value of Encore Capital Total Assets Per Share was 122.09. Moreover, Encore Capital Net Income Common Stock USD is decreasing over the last 4 years. Taking everything into account, our analysis show that Encore Capital Responds to market. The firm is undervalued and projects probability of distress close to average for the next 2 years. Our ongoing buy or sell advice on the firm is Hold.
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