Encore Capital Group (NASDAQ: ECPG) has built a business around a part of the economy most investors would rather not think about. It buys charged-off consumer debt from banks, including credit-card balances that have been written off as hopeless, and then collects what it can.
It is an uncomfortable business, but elevated consumer credit stress has created unusually favorable conditions for Encore. The stock has more than doubled over the past year as the credit cycle has shifted increasingly in Encore’s favor.
