Encore Capital Return On Equity vs. Current Valuation
| ECPG Stock | USD 47.25 1.79 3.65% |
For Encore Capital profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Encore Capital to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Encore Capital Group utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Encore Capital's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Encore Capital Group over time as well as its relative position and ranking within its peers.
Encore |
Is Consumer Finance space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Encore Capital. If investors know Encore will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Encore Capital listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth 0.595 | Earnings Share (7.83) | Revenue Per Share 55.731 | Quarterly Revenue Growth 0.186 | Return On Assets 0.0425 |
The market value of Encore Capital Group is measured differently than its book value, which is the value of Encore that is recorded on the company's balance sheet. Investors also form their own opinion of Encore Capital's value that differs from its market value or its book value, called intrinsic value, which is Encore Capital's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Encore Capital's market value can be influenced by many factors that don't directly affect Encore Capital's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Encore Capital's value and its price as these two are different measures arrived at by different means. Investors typically determine if Encore Capital is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Encore Capital's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.
Encore Capital Group Current Valuation vs. Return On Equity Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining Encore Capital's current stock value. Our valuation model uses many indicators to compare Encore Capital value to that of its competitors to determine the firm's financial worth. Encore Capital Group is rated # 4 in return on equity category among its peers. It also is rated # 4 in current valuation category among its peers . Comparative valuation analysis is a catch-all technique that is used if you cannot value Encore Capital by discounting back its dividends or cash flows. It compares the stock's price multiples to nearest competition to determine if the stock is relatively undervalued or overvalued.Encore Current Valuation vs. Return On Equity
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.
Encore Capital |
| = | -0.16 |
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Enterprise Value is a firm valuation proxy that approximates the current market value of a company. It is typically used to determine the takeover or merger price of a firm. Unlike Market Cap, this measure takes into account the entire liquid asset, outstanding debt, and exotic equity instruments that the company has on its balance sheet. When a takeover occurs, the parent company will have to assume the target company's liabilities but will take possession of all cash and cash equivalents.
Encore Capital |
| = | 4.47 B |
Enterprise Value can be a useful tool to compare companies with different capital structures. Long term liability and current cash or cash equivalents can have a huge impact on market valuation of a given company.
Encore Current Valuation vs Competition
Encore Capital Group is rated # 4 in current valuation category among its peers. After adjusting for long-term liabilities, total market size of Financials industry is currently estimated at about 1.2 Trillion. Encore Capital adds roughly 4.47 Billion in current valuation claiming only tiny portion of equities under Financials industry.
Encore Capital Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in Encore Capital, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Encore Capital will eventually generate negative long term returns. The profitability progress is the general direction of Encore Capital's change in net profit over the period of time. It can combine multiple indicators of Encore Capital, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Encore Capital Group, Inc., a specialty finance company, provides debt recovery solutions and other related services for consumers across financial assets worldwide. The company was incorporated in 1999 and is headquartered in San Diego, California. Encore Capital operates under Mortgage Finance classification in the United States and is traded on NASDAQ Exchange. It employs 6604 people.
Encore Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on Encore Capital. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Encore Capital position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Encore Capital's important profitability drivers and their relationship over time.
Use Encore Capital in pair-trading
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Encore Capital position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Encore Capital will appreciate offsetting losses from the drop in the long position's value.Encore Capital Pair Trading
Encore Capital Group Pair Trading Analysis
The ability to find closely correlated positions to Encore Capital could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Encore Capital when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Encore Capital - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Encore Capital Group to buy it.
The correlation of Encore Capital is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Encore Capital moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Encore Capital Group moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Encore Capital can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Use Investing Themes to Complement your Encore Capital position
In addition to having Encore Capital in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did You Try This Idea?
Run Medical Equipment Thematic Idea Now
Medical Equipment
Fama and French investing themes focus on testing asset pricing under different economic assumptions. The Medical Equipment theme has 61 constituents at this time.
You can either use a buy-and-hold strategy to lock in the entire theme or actively trade it to take advantage of the short-term price volatility of individual constituents. Macroaxis can help you discover thousands of investment opportunities in different asset classes. In addition, you can partner with us for reliable portfolio optimization as you plan to utilize Medical Equipment Theme or any other thematic opportunities.
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Check out Investing Opportunities. You can also try the Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
To fully project Encore Capital's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Encore Capital Group at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Encore Capital's income statement, its balance sheet, and the statement of cash flows.