Credit Acceptance CorporationNASDAQ
Credit Acceptance - My Favorite Short Heading Into 2016
Nitin Gulati • 11 Comments
Nitin Gulati • 11 Comments
Tue, Dec. 6, 10:33 AM
- Those most at risk are subprime-focused lenders, says Height Securites' Edwin Groshans, noting a FRBNY report showing auto loans continuing to grow and subprime delinquencies pointing to signs of distress.
- The National Auto Dealers Association November update showed continuing acceleration in used car price depreciation.
- Ally Financial (ALLY flat), for one, has been increasing subprime loans held on its balance sheet, and reported a Q3 increase in net charge-offs due in part to lower recovery rates on repossessed autos.
- Others of note: Credit Acceptance (CACC -0.5%), Santander Consumer (SC -0.6%), Capital One (COF -0.6%)
- Source: Bloomberg
Mon, Nov. 28, 10:26 AM
- The portfolio manager of the AdvisorShares Ranger Equity Bear ETF (NYSEARCA:HDGE) sets his sights on the auto finance sector.
- Short specialist Brad Lamensdorf says in an e-mail provided to Seeking Alpha that the wave of cars coming off of long leases this spring will "crush" prices in the sector.
- Current shorts from Lamensdorf include CarMax (KMX -1.3%), Credit Acceptance Corp (CACC) and Santander Consumer USA Holding (SC -1.4%).
Tue, Nov. 8, 12:53 PM
- Hertz is well off its lows, but still down 32% after disappointing earnings and a guidance cut, with the company noting the declining value of it cars. OneMain Holdings has plunged 38% after slashing guidance.
- Lower in this wake are rental and leasing names, and auto retailers like CarMax (KMX -4.2%). Finance companies are also getting under pressure: Credit Acceptance (CACC -1.8%), Santander Consumer (SC -4.4%), Ally Financial (ALLY -1.7%).
- Yesterday's Fed senior loan officer survey alluded to incremental caution on auto and credit card lending standards, says Evercore's John Pancari. The survey also showed a slight "down-shift" in auto-loan demand.
Wed, Nov. 2, 1:01 PM
Tue, Nov. 1, 4:06 PM
Mon, Oct. 31, 5:35 PM
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Thu, Sep. 22, 8:36 AM
- CarMax slumped yesterday after disappointing FQ2 results, and Janney Capital's John Rowan say the trends evident in that report are concerning for subprime auto companies.
- He notes a significant slowdown in subprime sales and that CarMax's own financing arm saw a jump in credit costs. The results, he says, support his cautious stance on the likes of Credit Acceptance (NASDAQ:CACC), Consumer Portfolio Services (NASDAQ:CPSS), America's Car-Mart (NASDAQ:CRMT), and Santander Consumer (NYSE:SC).
Tue, Sep. 6, 10:15 AM
Mon, Aug. 1, 5:37 PM
Fri, Jul. 29, 4:05 PM
Mon, Jun. 20, 1:00 PM
Thu, Jun. 2, 12:20 PM
- "Auto is clearly a little stretched, in my opinion," says JPMorgan (JPM -0.3%) CEO Jamie Dimon, speaking at a conference. "Someone is going to get hurt... we don't do much of that."
- Speaking at the same conference, U.S. Bancorp (USB -0.3%) CEO Richard Davis calls the auto loan market "overheated" thanks to pricing competition .“It’s a business you have to watch through the cycles, and right now it is probably at its least attractive. But in what could be a day, a month or a year, it could be very attractive.”
- Interested players: COF, SC, ALLY, CACC
Mon, May 2, 4:09 PM
- Credit Acceptance (NASDAQ:CACC): Q1 EPS of $4.02 beats by $0.21.
- Revenue of $227.9M (+17.4% Y/Y) beats by $3.84M.
Thu, Apr. 7, 3:48 PM
- An increasing number of securitizations from smaller subprime auto lenders who tend to cater to weaker-credit borrowers has boosted net losses on subprime ABS over the past few years, says Moody's, which ominously notes this is happening even with favorable economic conditions.
- In echos of the MBS bust-up, several 2015 deals are experiencing high early losses.
- See also from one month ago: Shades of subprime flash warning for auto sales
- The two largest subprime auto ABS sponsors - AmeriCredit and Santander Drive (NYSE:SC) are losing market share to these smaller shops.
- Source: Bloomberg's Charles Williams
- Also monitoring: Credit Acceptance Corp. (NASDAQ:CACC).
Mon, Mar. 21, 12:43 PM
- There's been a lot of talk about an explosion in subprime lending, but 21.7% of all auto loans issued between Jan. and Nov. of last were subprime, says Equifax, right in the middle of the 21-22% range seen since 2012.
- As for delinquencies, the 1.15% rate in January of 2016 was flat from one year ago. Loan write-offs did rise to 22.5 basis points in January 2016 from 20.7 bps a year ago. At their peak in March 2009, write-offs hit 50 bps. Severe delinquencies of 0.48% this year were higher by two basis points. Severe delinquencies to subprime borrowers rose to 2.15% from 2.06%.
- Origingations, meanwhile, for the period from Jan-Nov 2015 rose 9.4% to 26.8M loans, and 12.4% to $554.8B from the same period a year earlier. They are the highest levels since Equifax began tracking the numbers in 2008.
- Santander Consumer (SC +0.1%), Ally Financial (ALLY -0.3%), Credit Acceptance (CACC -3.5%)
- Previously: Subprime auto worry hits lenders (March 15)
Tue, Mar. 15, 10:40 AM
- A weekend WSJ story about the 2007-like blowup of a subprime auto loan securitization continues to take its toll on Santander Consumer (NYSE:SC), down 7.8% today and 11.9% over the last two session.
- Ally Financial (NYSE:ALLY) is down 2.3% since Monday morning.
- Not necessarily auto-related, but certainly tied to the boom in less than prime lending, two-day losses for OneMain Holdings (NYSE:OMF) 8.1%, OnDeck Capital (NYSE:ONDK) 3.3%, Lending Club (NYSE:LC) 5.5%.
- Credit Acceptance Corp (NASDAQ:CACC) is down 5.2%.