Is Credit Acceptance Corp. (CACC) A Good Stock To Buy?

Seeing as Credit Acceptance Corp. (NASDAQ:CACC) has faced declining sentiment from the entirety of the hedge funds we track, we can see that there exists a select few hedgies who were dropping their full holdings last quarter. Interestingly, Matthew Hulsizer’s PEAK6 Capital Management dumped the biggest stake of the “upper crust” of funds followed by Insider Monkey, comprising close to $5.9 million in stock, and Noam Gottesman’s GLG Partners was right behind this move, as the fund cut about $2.9 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now take a look at hedge fund activity in other stocks similar to Credit Acceptance Corp. (NASDAQ:CACC). These stocks are Spirit Realty Capital Inc (NYSE:SRC), Phillips 66 Partners LP (NYSE:PSXP), Endurance Specialty Holdings Ltd. (NYSE:ENH), and Cullen/Frost Bankers, Inc. (NYSE:CFR). This group of stocks’ market valuations are closest to CACC’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SRC 25 337403 5
PSXP 7 25554 1
ENH 22 227523 7
CFR 15 51427 4

As you can see these stocks had an average of 17.25 hedge funds with bullish positions and the average amount invested in these stocks was $160 million, below the $529 million figure in CACC’s case. Spirit Realty Capital Inc (NYSE:SRC) is the most popular stock in this table with 25 funds reporting stakes, while Phillips 66 Partners LP (NYSE:PSXP) is the least popular one. Credit Acceptance Corp. (NASDAQ:CACC) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SRC might be a better candidate to consider a long position.