BlackRock Inc. Makes New Investment in Credit Acceptance Corporation $CACC

Key Points

• BlackRock acquired 642,097 shares of Credit Acceptance, valued at approximately $408.8 million, giving it a 6.14% stake. Institutional investors collectively own 81.71% of the company.
• Credit Acceptance reported quarterly EPS of $12.12, slightly below the $12.20 consensus, while revenue of $415 million fell well short of the $588.1 million estimate. The company’s net margin was 21.54% and return on equity was 31.67%.
• The stock opened at $604.26, above analysts’ average target price of $570; the consensus rating remains Hold. Meanwhile, insiders sold more than 44,000 shares worth approximately $27.5 million over the past three months.

BlackRock Inc. acquired a new position in shares of Credit Acceptance Corporation (NASDAQ:CACC - Free Report) during the 2nd quarter, according to its most recent disclosure with the SEC. The institutional investor acquired 642,097 shares of the credit services provider's stock, valued at approximately $408,849,000. BlackRock Inc. owned approximately 6.14% of Credit Acceptance at the end of the most recent reporting period.

A number of other hedge funds and other institutional investors have also recently modified their holdings of CACC. Royal Bank of Canada grew its holdings in shares of Credit Acceptance by 31.6% in the first quarter. Royal Bank of Canada now owns 1,916 shares of the credit services provider's stock valued at $989,000 after purchasing an additional 460 shares in the last quarter. AQR Capital Management LLC raised its stake in Credit Acceptance by 230.6% during the first quarter. AQR Capital Management LLC now owns 7,885 shares of the credit services provider's stock valued at $3,961,000 after purchasing an additional 5,500 shares in the last quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC raised its stake in Credit Acceptance by 3.9% during the first quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 23,886 shares of the credit services provider's stock valued at $12,334,000 after purchasing an additional 900 shares in the last quarter. Creative Planning lifted its position in Credit Acceptance by 35.6% during the second quarter. Creative Planning now owns 529 shares of the credit services provider's stock valued at $269,000 after purchasing an additional 139 shares during the last quarter. Finally, JPMorgan Chase & Co. lifted its position in Credit Acceptance by 4.8% during the second quarter. JPMorgan Chase & Co. now owns 5,077 shares of the credit services provider's stock valued at $2,586,000 after purchasing an additional 232 shares during the last quarter. 81.71% of the stock is currently owned by institutional investors.

Credit Acceptance Stock Performance

NASDAQ CACC opened at $604.26 on Wednesday. The business's 50 day moving average price is $601.12 and its 200-day moving average price is $537.44. Credit Acceptance Corporation has a fifty-two week low of $401.90 and a fifty-two week high of $668.86. The company has a market cap of $6.32 billion, a P/E ratio of 13.29 and a beta of 1.37. The company has a debt-to-equity ratio of 3.84, a quick ratio of 14.89 and a current ratio of 14.89.

Credit Acceptance (NASDAQ:CACC - Get Free Report) last issued its quarterly earnings results on Tuesday, August 4th. The credit services provider reported $12.12 earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $12.20 by ($0.08). The company had revenue of $415.00 million during the quarter, compared to the consensus estimate of $588.07 million. Credit Acceptance had a return on equity of 31.67% and a net margin of 21.54%.The firm's quarterly revenue was up .6% compared to the same quarter last year. During the same quarter in the prior year, the business earned $10.05 earnings per share. Sell-side analysts predict that Credit Acceptance Corporation will post 47.8 earnings per share for the current year.

Wall Street Analyst Weigh In

CACC has been the topic of a number of research reports. TD Cowen boosted their target price on shares of Credit Acceptance from $575.00 to $600.00 and gave the stock a "hold" rating in a report on Wednesday, August 5th. Weiss Ratings raised shares of Credit Acceptance from a "hold (c+)" rating to a "buy (b-)" rating in a report on Thursday, July 16th. Finally, Zacks Research downgraded shares of Credit Acceptance from a "strong-buy" rating to a "hold" rating in a report on Wednesday, May 13th. One investment analyst has rated the stock with a Buy rating and three have assigned a Hold rating to the company's stock. Based on data from MarketBeat, the stock currently has an average rating of "Hold" and a consensus target price of $570.00.

Insider Buying and Selling at Credit Acceptance

In related news, major shareholder Jill Foss Watson sold 11,000 shares of Credit Acceptance stock in a transaction dated Thursday, July 2nd. The shares were sold at an average price of $653.24, for a total transaction of $7,185,640.00. Following the completion of the transaction, the insider directly owned 49,346 shares of the company's stock, valued at approximately $32,234,781.04. The trade was a 18.23% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website. Also, insider Erin J. Kerber sold 8,656 shares of Credit Acceptance stock in a transaction dated Wednesday, June 24th. The stock was sold at an average price of $600.94, for a total transaction of $5,201,736.64. Following the transaction, the insider directly owned 25,711 shares of the company's stock, valued at approximately $15,450,768.34. This represents a 25.19% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last three months, insiders have sold 44,289 shares of company stock valued at $27,525,241. Insiders own 6.10% of the company's stock.

Credit Acceptance Company Profile

Credit Acceptance Corporation, founded in 1972 and headquartered in Southfield, Michigan, is a specialty finance company focused on the indirect automotive lending market. The company partners with independent and franchised auto dealers to facilitate purchase financing for consumers who may not qualify for traditional prime auto loans. By purchasing retail installment contracts originated by these dealers, Credit Acceptance provides capital and credit insurance to support vehicle sales, enabling dealers to broaden their customer base and reduce credit risk.

Through its proprietary underwriting platform and risk management strategies, Credit Acceptance evaluates borrower applications, structures credit plans, and retains servicing rights on the acquired contracts.

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