In a recent transaction, Olsen Geir, a director at PRA Group Inc (NASDAQ:PRAA), acquired shares in the company, signaling confidence in the firm's prospects. The transaction, which took place on August 7, 2024, involved the purchase of 11,750 shares at a weighted average price of $21.39 per share. This resulted in a total investment of approximately $251,332.
The shares were bought in multiple transactions with prices ranging from $21.25 to $21.45. The purchase by Geir, which was disclosed in a regulatory filing, adds to his holdings in the short-term business credit institution. Following the transaction, Geir now directly owns 11,750 shares of PRA Group.
Investors often look to insider buying as a positive indicator that company executives believe in the corporation's future performance. The recent acquisition by Geir may be seen as such a sign, as directors are typically privy to detailed and current information about their company's operations and outlook.
PRA Group, headquartered in Norfolk, Virginia, specializes in acquiring and managing non-performing consumer debt. The company was formerly known as Portfolio Recovery Associates Inc. and has a history of growth and expansion in the debt recovery sector.
The purchase by a PRA Group director is a notable event for current and potential investors, providing insight into the confidence insiders have in the company's value and potential for growth.
In other recent news, PRA Group has reported a steady growth in the second quarter of 2024. The company's earnings revealed a 13% year-over-year increase in cash collections, with a net income of $22 million, or $0.54 per diluted share. PRA Group's total revenue for the quarter stood at $284 million, with portfolio income contributing $209 million. The company also invested $379 million in purchasing loan portfolios, split between $225 million in the Americas and $154 million in Europe.
Operating expenses reached $195 million, primarily due to investments in the US legal collections channel. Despite certain customer segments experiencing stress due to high interest rates and inflation, PRA Group anticipates collecting $1.6 billion of its Estimated Remaining Collections (ERC) balance over the next 12 months. The company's debt to adjusted EBITDA ratio remained within the target range at 2.92 times.
Looking forward, PRA Group expects portfolio income to continue growing in subsequent quarters and foresees legal collection spending to moderate in the second half of the year. The company has also issued $400 million of senior notes due 2030, with plans to redeem $298 million senior notes due 2025. These recent developments indicate PRA Group's strategic focus on optimizing investments and operational execution for sustained growth.
InvestingPro Insights
Amid recent insider transactions at PRA Group Inc (NASDAQ:PRAA), the company's financial metrics and market performance shed light on its current valuation and future prospects. According to InvestingPro data, PRA Group has a market capitalization of $882.95 million and is trading at a high earnings multiple, with a P/E ratio of 222.5. This elevated P/E ratio, particularly when adjusted for the last twelve months as of Q2 2024 to 180.44, suggests that the market has high expectations for the company's earnings growth.
Despite the high P/E ratio, PRA Group's revenue has shown significant growth, with a 17.46% increase over the last twelve months as of Q2 2024. This is further highlighted by the company's quarterly revenue growth of 35.84% in Q2 2024. Moreover, the company has demonstrated a strong return over the last month, with a 22.48% price total return, which aligns with the director's confidence in purchasing additional shares.
InvestingPro Tips indicate that PRA Group's net income is expected to grow this year and that analysts predict the company will be profitable. These insights, coupled with the fact that PRA Group's liquid assets exceed its short-term obligations, provide a positive outlook on the company's financial health. It's worth noting that PRA Group does not pay a dividend to shareholders, which could be a consideration for investors seeking income as well as growth.
For those interested in a deeper analysis, InvestingPro offers additional tips to help investors make informed decisions. Find more InvestingPro Tips on PRA Group at https://www.investing.com/pro/PRAA, where a total of 8 tips are available to enrich your investment research.
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