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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (53738)	4/12/2014 2:28:36 PM
From: Paul Senior	Read Replies (3) \| Respond to of 78745

Auto finance companies: I'll pass on ALLY. Not enough public history that I see. Roe negative some years. CPSS. Low p/e, good roe, good rev growth (per Yahoo). Erratic earnings history though. A trade here perhaps. I'll pass. CACC. Have held a few shares for several years. Small add recently. I like the long-term story. Good history of roe, high profit margins, generally increasing stated bv. I like CACC's business model, assuming I understand it: Instead of purchasing/financing loans from car dealers as other finance companies do, the company partners with the dealers. Which is to say, CACC, in exchange for the car dealers making some effort to ascertain that the buyers can actually make payments on their purchases through the end of financing, CACC will make some payments to the dealers. (I believe over the time of the loan. I could be wrong here.) So presumably CACC gets the dealers' first choice of the dealers' best customers. CRMT: I have a few shares of this "finance" "pay here, buy here" company. Profitable every year past ten, okay roe, increasing stated bv every year. I wouldn't call the stock undervalued at current price. Steady business though; I look for the stock price to improve over the next 18 months.

To: Spekulatius who wrote (53738)	4/15/2014 8:40:51 AM
From: robert b furman	Respond to of 78745

GMAC previous ALLY bought up a subprime auto lender before Resmark brought them down. The auto subprime lender was the best at collections (they called the day before the note payment was due). Subprime auto loans are where margin is. Auto's are very liquid - if payment is missed - repo car and take to auction and turn into money quickly. Especially with the shortage of good used vehicles out there ! High margins with good liquidity = good profits. Resmark can probably be dumped or sold ?? Wonder if GM financial bought any Ally - if so an automatic referral to low credit scores like what was done before would be effective and easy to implement (all software pre-exists). Bob