Smead Capital Management Inc. Trims Position in Credit Acceptance Corporation $CACC

Key Points

• Smead Capital Management cut its Credit Acceptance stake by 6.5% in the fourth quarter, but it still held 188,334 shares worth about $83.5 million, making CACC its 25th-largest position.
• Insider selling continued, with CTO Ravi Mohan Valiyaveettil and COO Jonathan Lum both selling shares under pre-arranged trading plans; insiders sold 26,527 shares worth $14.2 million over the last 90 days.
• Analysts remain cautious on the stock, with a consensus Hold rating and an average price target of $520, while the company recently reported earnings of $10.71 per share, slightly below estimates and on lower-than-expected revenue.

Smead Capital Management Inc. lessened its stake in Credit Acceptance Corporation (NASDAQ:CACC - Free Report) by 6.5% during the 4th quarter, according to its most recent filing with the Securities and Exchange Commission (SEC). The firm owned 188,334 shares of the credit services provider's stock after selling 13,068 shares during the period. Credit Acceptance accounts for about 1.7% of Smead Capital Management Inc.'s portfolio, making the stock its 25th largest position. Smead Capital Management Inc. owned 1.71% of Credit Acceptance worth $83,518,000 as of its most recent filing with the Securities and Exchange Commission (SEC).

Several other institutional investors also recently added to or reduced their stakes in CACC. Royal Bank of Canada increased its position in Credit Acceptance by 31.6% during the 1st 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 during the period. AQR Capital Management LLC increased its position in Credit Acceptance by 230.6% during the 1st 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 during the period. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC increased its position in Credit Acceptance by 3.9% during the 1st 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 during the period. Creative Planning increased its position in Credit Acceptance by 35.6% during the 2nd 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 period. Finally, JPMorgan Chase & Co. increased its position in Credit Acceptance by 4.8% during the 2nd 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 period. Hedge funds and other institutional investors own 81.71% of the company's stock.

Insiders Place Their Bets

In other news, CTO Ravi Mohan Valiyaveettil sold 1,262 shares of the firm's stock in a transaction dated Wednesday, May 6th. The shares were sold at an average price of $550.00, for a total value of $694,100.00. Following the sale, the chief technology officer directly owned 25,985 shares in the company, valued at approximately $14,291,750. This trade represents a 4.63% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, COO Jonathan Lum sold 3,000 shares of the firm's stock in a transaction dated Monday, April 20th. The shares were sold at an average price of $535.00, for a total transaction of $1,605,000.00. Following the completion of the sale, the chief operating officer owned 31,609 shares in the company, valued at $16,910,815. This represents a 8.67% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last ninety days, insiders sold 26,527 shares of company stock worth $14,203,265. Insiders own 6.10% of the company's stock.

Analyst Upgrades and Downgrades

A number of research analysts have commented on the stock. Stephens raised their target price on shares of Credit Acceptance from $450.00 to $540.00 and gave the company an "equal weight" rating in a research report on Friday, April 17th. Weiss Ratings raised shares of Credit Acceptance from a "hold (c)" rating to a "hold (c+)" rating in a research report on Friday, May 8th. Zacks Research downgraded shares of Credit Acceptance from a "strong-buy" rating to a "hold" rating in a research report on Wednesday, May 13th. Finally, TD Cowen raised their target price on shares of Credit Acceptance from $450.00 to $500.00 and gave the company a "hold" rating in a research report on Wednesday, May 6th. Four research analysts have rated the stock with a Hold rating, According to data from MarketBeat.com, the company currently has a consensus rating of "Hold" and an average price target of $520.00.

Credit Acceptance Stock Down 0.6%

NASDAQ:CACC opened at $544.80 on Friday. Credit Acceptance Corporation has a fifty-two week low of $401.90 and a fifty-two week high of $565.14. The stock has a market capitalization of $5.70 billion, a P/E ratio of 13.54 and a beta of 1.36. The company has a debt-to-equity ratio of 4.09, a quick ratio of 13.62 and a current ratio of 13.62. The company's 50-day simple moving average is $488.91 and its 200-day simple moving average is $473.87.

Credit Acceptance (NASDAQ:CACC - Get Free Report) last released its quarterly earnings results on Tuesday, May 5th. The credit services provider reported $10.71 earnings per share for the quarter, missing analysts' consensus estimates of $10.73 by ($0.02). Credit Acceptance had a net margin of 19.49% and a return on equity of 29.95%. The firm had revenue of $406.00 million during the quarter, compared to the consensus estimate of $580.77 million. During the same quarter in the prior year, the business posted $9.35 earnings per share. The firm's quarterly revenue was up 1.6% on a year-over-year basis. On average, equities analysts anticipate that Credit Acceptance Corporation will post 47.5 earnings per share for the current fiscal year.

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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