4. Ally Financial Inc. (NYSE:ALLY)
Number of Hedge Fund Holders: 42
Ally Financial Inc. (NYSE:ALLY) is a digital financial services company, that provides various digital financial products and services to consumer, commercial, and corporate customers primarily in the United States and Canada. Berkshire Hathaway bought Ally Financial Inc. (NYSE:ALLY) in the first quarter of 2022. At the end of the third quarter of 2022, this holding comprised 30 million shares worth $834.9 million. This makes up 0.28 % portion of its total investment. On January 20, 2023, Ally Financial Inc. posted their earnings for the fourth quarter, reporting earnings per share of $0.83, missing the analyst’s estimate by $-$0.07. The company’s revenue was $2.20B, beating the analyst’s estimate by $143.15M.
On January 2, BMO Capital analyst James Fotheringham maintained a Market Perform rating on Credit Acceptance (NYSE: ALLY) stock and increased the price target to $380 from $360, noting the company’s fourth-quarter earnings beat.
At the end of the third quarter of 2022, 42 hedge funds in the database of Insider Monkey held stakes worth $1.9 billion in Ally Financial Inc. (NYSE:ALLY), compared to 42 in the preceding quarter worth $2.3 billion.
In its Q3 2022 investor letter, Moon Capital Management, an asset management firm, highlighted a few stocks and Ally Financial Inc. (NYSE:ALLY) was one of them. Here is what the fund said:
“We recently purchased shares of Ally Financial Inc. (NYSE:ALLY), the world’s largest digital-only bank. Ally’s legacy dates back more than 100 years when it was originally launched as GMAC, the in-house financing arm of General Motors. The company was spun out from GM and rebranded as Ally more than a decade ago but has retained an automotive focus on the lending side, where it holds the largest position in prime auto lending.
Since the spinoff, Ally has transformed from an auto loan company into a comprehensive, independent finance provider for borrowers and savers of all types. The company has completely restructured the liability side of its balance sheet and has created a deposit-gathering engine that is now more than 85 percent deposit funded. (Compared to issuing traditional corporate debt, deposits are a significantly less expensive capital source for banks.)
Due to the lower overhead associated with the digital bank’s lack of brick-and-mortar locations, the bank produces one of the best efficiency ratios in the industry. This low-cost position, combined with a relatively high loan portfolio yield of approximately 6.75 percent, has helped the company earn net interest margins well above those of many leading banks. These high margins translate into high returns on equity, which the company targets at 16-18 percent over the medium term. (Actual ROE in 2021 was 24 percent. When the company came public in 2014, its ROE was a paltry four percent.).read more
