AmeriCredit Director Buying Stock (ACF)

From Insider Score: A director at AmeriCredit Corp. (ACF) has purchased shares of the auto finance company, buying the stock with its shares up more than 20% from where he bought it last fall.

John Clay bought 10K shares of ACF at $29.06 on May 12th, upping his holdings in the company to 58.2K shares. Clay, the former CEO of accounting and auditing manual publishing firm Practitioners Publisher Company, has been on ACF's board since June 2004. He previously bought 2K shares at $24.06 in September 2005, and he is one of only two ACF insiders to buy stock on the open market over the past three years (other insiders have bought 1K shares and exercised and held a total of 30K shares).

Shares of ACF hit $31.70 on April 24th, the stock's highest price since June 2002, and up from an October 2005, 52-week low of $21.31. The stock fell as low as $1.55 in March 2003 as the company faced a liquidity crisis, but a restructuring program and stock buybacks have helped boost the company's fortunes.

For the fiscal third quarter (ended March 31st, 2006), ACF reported earnings of $86.7M, or 60 cents per share, up from $75.6M, or 46 cents per share, a year ago, and well ahead of the 53 cents EPS analysts expected. Revenue rose more than 22% to $455.1M, as the company's loan purchases grew from $1.37B to over $1.61B. Looking forward, ACF said it expected to earn $2.10 to $2.30 per share for the fiscal year ending in June, saying its earnings would be lower than the $2.36 per share analysts expect due its recently closed acquisition of Bay View Acceptance, whose "net interest margin and credit losses are historically lower than" ACF's. ACF paid $63.6M to acquire Bay View Acceptance, which was a subsidiary of Bay View Capital Corporation (BVC).

ACF has been a rather aggressive buyer of its own stock, taking down $817M worth of its shares since April 2004, including $23M in stock last quarter. The company still has $183M left on its approved repurchase plan.

"Our March results reflected strength in our key performance metrics - net income increased 15% from a year ago, credit results were better than expected, and origination volume was strong," said ACF President and Chief Executive Officer Dan Berce. "These positive results have further strengthened our balance sheet providing the ability to continue our share repurchase program as well as support our growth initiatives for fiscal year 2007 and beyond."

Research firms have been bullish on ACF since the company's April 24th earnings report, with Stifel analysts adding the name to their "Select List," saying that "although the stock is near peak levels, they think it will outperform due to fundamentals, their expectation that the company will resume its buyback, and their belief that the company could become an acquisition target over the next 18 months." JPM Securities, meanwhile, maintained a "strong buy" rating and upped its target on the stock from $33 to $37, citing all-time low delinquency and charge-off rates in recent months, among other things.

Worth Noting: Five now former ACF executives were charged with insider trading by the SEC in 2002. The five, without admitting or denying guilt, settled the case by paying fines and disgorging profits. ACF also settled, without admitting or denying guilt, and paid $100K to settle the issue.