Warren Buffett Is Not Giving Up on These 5 Stocks Despite Losses

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In this article, we discuss 5 stocks that Warren Buffett is not giving up on despite losses. If you want to see more stocks in this selection, Warren Buffett Is Not Giving Up on These 10 Stocks Despite Losses

5. Ally Financial Inc. (NYSE:ALLY)

Number of Hedge Fund Holders: 42

YTD Share Price Decline as of August 19: 26.76%

Ally Financial Inc. (NYSE:ALLY) is based in Detroit, Michigan, operating as a digital financial-services company in the United States and Canada. Warren Buffett increased his position in Ally Financial Inc. (NYSE:ALLY) by 235% in Q2 2022. The Berkshire portfolio consisted of 30 million Ally Financial Inc. (NYSE:ALLY) shares worth $1 billion, representing 0.33% of the total holdings. The stock has fallen about 27% year to date as of August 19. The company reported on July 19 a Q2 EPS of $1.76 and a revenue of $2.08 billion, falling short of Wall Street consensus by $0.11 and $116.79 million, respectively. 

Piper Sandler analyst Kevin Barker on July 25 downgraded Ally Financial Inc. (NYSE:ALLY) to Underweight from Neutral, lowering the price target from $45 to $34. The analyst cited auto market headwinds and higher funding costs for the downgrade, as well as the negative catalysts emerging for Ally Financial Inc. (NYSE:ALLY) given its towering leverage compared to peers.

According to the second quarter database of Insider Monkey, 42 hedge funds were bullish on Ally Financial Inc. (NYSE:ALLY). Harris Associates is a significant shareholder of the company, with 26.75 million shares worth $896.4 million.  

Here is what Oakmark Fund has to say about Ally Financial Inc. (NYSE:ALLY) in its Q2 2022 investor letter:

“As for Ally Financial, fears of a recession drove the stock price down more than 20% for the period, but business fundamentals have remained strong and the shares now trade for just a mid-single-digit multiple of current earnings. We believe today’s price ignores the funding cost improvements and well-capitalized nature of Ally’s balance sheet. We continue to own both investments given their significant discounts to our estimates of business value.”

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