We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
4 Reasons to Buy Credit Acceptance (CACC) Stock Right Now
Read MoreHide Full Article
It seems to be a wise idea to add Credit Acceptance Corporation (CACC - Free Report) stock to your portfolio amid the coronavirus crisis, given the strength in its fundamentals and solid prospects. Moreover, the company’s steady capital-deployment activities make it an attractive choice for investors.
Over the past seven days, the Zacks Consensus Estimate for 2020 and 2021earnings remained unchanged. The company currently sports a Zacks Rank #1 (Strong Buy).
Shares of Credit Acceptance have lost 7.8% in the past 12 months compared with the industry's 21.4% fall.
Factors That Make Credit Acceptance a Solid Pick
Earnings Growth: Over the past three to five years, Credit Acceptance has recorded earnings growth of 24.1% compared with the industry’s average of 11%. Though 2020 earnings are expected to slump 75.4%, the same is projected to grow at a rate of 125.8% in 2021.
Revenue Strength: Credit Acceptance has been witnessing steady revenue growth. The company’s top line has witnessed a six-year (2014-2019) CAGR of 15.5%. This uptick primarily resulted from the steady rise in dealer activities and finance charges. Despite the economic crisis resulting from the coronavirus outbreak, the top line is likely to grow on rise in demand for auto loans.
Notably, the company’s revenues are projected to grow at a rate of 0.8% and 0.5% in 2020 and 2021, respectively.
Steady Capital Deployment: Credit Acceptance’s capital-deployment activities are impressive. In March 2020, the company authorized additional 3 million shares to be repurchased. As of Mar 31, 2020, it had 3.1 million shares left to be repurchased. Despite having a substantial debt burden, its high cash-flow generating business model and low capital expenditures are likely to help sustain share buybacks in the days to come.
Superior ROE: Credit Acceptance’s trailing 12-month return on equity (ROE) highlights its growth potential. The company’s ROE of 30.52% compares favorably with the industry’s 13.91%, indicating that it is more efficient in using shareholder funds than its peers.
Other Stocks to Consider
AllianceBernstein L.P. (AB - Free Report) witnessed an upward earnings estimate revision of 6.3% for 2020 over the past 60 days. Its shares have depreciated 8% over the past year. At present, it sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
BrightSphere Investment Group Inc. (BSIG - Free Report) witnessed an upward earnings estimate revision of 16% for the current year over the past 60 days. Its shares have lost 5.9% over the past year. It currently flaunts a Zacks Rank of 1.
Encore Capital Group, Inc. (ECPG - Free Report) has witnessed a 5.4% upward earnings estimate revision for the ongoing year in the past 60 days. Its shares have gained 4.7% over the past year. Currently, it carries a Zacks Rank of 2 (Buy).
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
4 Reasons to Buy Credit Acceptance (CACC) Stock Right Now
It seems to be a wise idea to add Credit Acceptance Corporation (CACC - Free Report) stock to your portfolio amid the coronavirus crisis, given the strength in its fundamentals and solid prospects. Moreover, the company’s steady capital-deployment activities make it an attractive choice for investors.
Over the past seven days, the Zacks Consensus Estimate for 2020 and 2021earnings remained unchanged. The company currently sports a Zacks Rank #1 (Strong Buy).
Shares of Credit Acceptance have lost 7.8% in the past 12 months compared with the industry's 21.4% fall.
Factors That Make Credit Acceptance a Solid Pick
Earnings Growth: Over the past three to five years, Credit Acceptance has recorded earnings growth of 24.1% compared with the industry’s average of 11%. Though 2020 earnings are expected to slump 75.4%, the same is projected to grow at a rate of 125.8% in 2021.
Revenue Strength: Credit Acceptance has been witnessing steady revenue growth. The company’s top line has witnessed a six-year (2014-2019) CAGR of 15.5%. This uptick primarily resulted from the steady rise in dealer activities and finance charges. Despite the economic crisis resulting from the coronavirus outbreak, the top line is likely to grow on rise in demand for auto loans.
Notably, the company’s revenues are projected to grow at a rate of 0.8% and 0.5% in 2020 and 2021, respectively.
Steady Capital Deployment: Credit Acceptance’s capital-deployment activities are impressive. In March 2020, the company authorized additional 3 million shares to be repurchased. As of Mar 31, 2020, it had 3.1 million shares left to be repurchased. Despite having a substantial debt burden, its high cash-flow generating business model and low capital expenditures are likely to help sustain share buybacks in the days to come.
Superior ROE: Credit Acceptance’s trailing 12-month return on equity (ROE) highlights its growth potential. The company’s ROE of 30.52% compares favorably with the industry’s 13.91%, indicating that it is more efficient in using shareholder funds than its peers.
Other Stocks to Consider
AllianceBernstein L.P. (AB - Free Report) witnessed an upward earnings estimate revision of 6.3% for 2020 over the past 60 days. Its shares have depreciated 8% over the past year. At present, it sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
BrightSphere Investment Group Inc. (BSIG - Free Report) witnessed an upward earnings estimate revision of 16% for the current year over the past 60 days. Its shares have lost 5.9% over the past year. It currently flaunts a Zacks Rank of 1.
Encore Capital Group, Inc. (ECPG - Free Report) has witnessed a 5.4% upward earnings estimate revision for the ongoing year in the past 60 days. Its shares have gained 4.7% over the past year. Currently, it carries a Zacks Rank of 2 (Buy).
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>