Encore Capital Group: Sustained Tailwinds Warrant Small Position
Encore Capital Group shares have surged 65% year-to-date, reflecting strong market momentum. The guidance for 2026 looks stellar. Collections at $2.8 billion, an increase of 8% YoY. Earnings guidance of $13.00 per share, an increase of 19% YoY. I see two key secular tailwinds as being persistent, not temporary: high total consumer loan volume, along with elevated charge-off rates. This alone warrants a small position, in my opinion.