Below we discuss 5 best consumer finance stocks to buy now. To read our detailed analysis of the consumer finance industry and the rationale behind investing in the consumer finance sector, click to read 10 Best Consumer Finance Stocks to Buy Now.
Indiana-based OneMain Financial offers personal loans and insurance services. The stock rallied recently after Barclays gave an Overweight rating to the stock with a price target of $63. In the third quarter, OneMain Financial posted an EPS of $2.19 that surpassed analysts’ forecasts by $0.93. However, revenue in the period totaled $935 million, missing the street’s estimates by $3.42 million.
A total of 33 hedge funds tracked by Insider Monkey owned positions in OneMain as of the end of the third quarter. The total worth of these investments is $470.57 million. Matthew Lindenbaum’s Basswood Capital owns 2.67 million shares of the company. Here is what Miller Value Partners said about OMF in its 2020 Q1 investor letter:
“OneMain Holding Inc. (OMF) declined 51.7% during the period as investors worried about the potential negative economic impact from the coronavirus outbreak. The company issued a report on their current business position noting that they have $4.4B in cash which they believe is sufficient to run operations under numerous stress cases through 2021 along with $6B of unencumbered collateral and $3.6B undrawn and committed conduit lines that they can draw if needed. They reiterated that they expect to maintain profitability even in a 2008/2009 type of downturn. There has been a string of insider buying with the Chairman, Jay Levine, purchasing 30k shares and the CEO, Doug Shulman, purchasing 3.25k shares and a Director, Richard Smith, buying 2k shares. In addition, the company increased their buyback program from $100M to $200M, which represents ~8% of shares outstanding. The company reported 4Q results which beat the highest estimates. The company reported adjusted EPS of $1.96 versus $1.74 expected with net charge-offs of 5.71% versus 6.30% last year. The company increased their regular quarterly dividend to $0.33 and announced a special dividend of $2.50.”