Here’s How Recession Fears Affected Ally Financial (ALLY)’s Performance in the Third Quarter

Oakmark Funds, an investment management company, released its “Oakmark Fund” third quarter 2022 investor letter. A copy of the same can be downloaded here. In the third quarter, the fund returned -1.9%, outperforming the S&P 500 Index, which returned -4.9%. For the fiscal year that ended September 30, 2022, the fund declined -17.7% compared to a decline of -15.5% for the S&P 500 Index. Energy and healthcare sectors contributed positively to the fund’s performance in the quarter while communication services and financials sectors detracted from the performance. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.

Oakmark Funds discussed stocks like Ally Financial Inc. (NYSE:ALLY) in the Q3 2022 investor letter. Based in Detroit, Michigan, Ally Financial Inc. (NYSE:ALLY) provides digital financial products and services. On October 11, 2022, Ally Financial Inc. (NYSE:ALLY) stock closed at $28.79 per share. One-month return of Ally Financial Inc. (NYSE:ALLY) was -10.00% and its shares lost 45.60% of their value over the last 52 weeks. Ally Financial Inc. (NYSE:ALLY) has a market capitalization of $8.883 billion.

Here is what Oakmark Funds specifically said about Ally Financial Inc. (NYSE:ALLY) in its Q3 2022 investor letter:

“As for the detractors, fears of a recession have weighed heavily on consumer finance companies, like Ally Financial Inc. (NYSE:ALLY), due to concerns about deteriorating credit quality and used car price declines. Bad debt expense is likely to rise from the unusually low levels we’ve been experiencing, but we believe the company is well-positioned to absorb this normalization. With Ally’s shares trading for just 4x consensus EPS, we believe investors’ fears are already heavily discounted into Ally’s share price, creating an attractive risk/reward proposition.”

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Ally Financial Inc. (NYSE:ALLY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held Ally Financial Inc. (NYSE:ALLY) at the end of the second quarter, which was 49 in the previous quarter.

We discussed Ally Financial Inc. (NYSE:ALLY) in another article and shared the list of stocks recently downgraded by analysts. In addition, please check out our hedge fund investor letters Q3 2022 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.