Yes, modelling on cost to collect would be important. Particularly how much of that cost relates to collecting amounts for which no (future purchases) or negligible (recent purchase, can't find the person) value is on balance sheet and thus such cost related to future value generation, not the effort required to collect the bulk of balance in the PDL value that is now performing.
I wouldn't necessarily suggest my comments are in depth as that came from a 20 min exercise but often (as buffet suggests) it doesn't take much more time to work out if you see value.
Another question I asked myself and don't have a clear answer to is, if the business stopped buying any more debt, retrenched staff (obviously including the costs etc) not required to service collection activities (ie just a core to manage run-off of PA book plus a bit round the edges) and just ran the business off over 3-4 years, including paying off the debt, taxes... would you be able to extract a net $125m? If one can answer that in the affirmative it would be fair to say presently there is a very good buying opportunity.
DYOR
PNC Price at posting:
$1.98 Sentiment: None Disclosure: Held
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(20min delay)