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

To: Paul Senior who wrote (54212)	8/1/2014 11:58:08 PM
From: Spekulatius	Read Replies (2) \| Respond to of 78740

re ALLY ALLY may be down because of some reports that car purchases have increased enough now to where US people are moving from "our car is old/tired and we need a more reliable/better one" to "if a car attracts me maybe I'll want to replace what I have". I say this because I notice the sector - car loan business - seems to be down in general. In my view anyway as reflected by CACC and CRMT in which I have positions </it CACC and CRMT are subprime and that business is under pressure because of increased competition. I don't think it's a matter of car sales, I believe it's a segment specific issue. The margins in the prime lending business are fairly narrow too, which is hurting ALLY. Nevertheless, I don't think the interest rates will get lower in the prime business and ALLY reduced cost of funding should improve interest margins everything else being equal. CACC and CRMT trade at high multiples of book, the valuation is dependent on the margins and high ROE holding up. I like UTX but haven't bought a position yet.