Why Spring Has AmeriCredit Blooming

In one of the most startling stock-price moves of the year, AmeriCredit (ACF Quote), which makes auto loans to people with spotty credit records, has soared 67% from its March low.

This is startling for three reasons. First, AmeriCredit is a financial company, and most finance stocks are being hit by fears that the Fed will have to raise interest rates to redouble its fight against inflation. Second, it's a consumer-finance firm that focuses on lower-end borrowers, who still have a bad name after several -- remember Mercury Finance? -- got into serious trouble, or collapsed, a couple of years back. Third, AmeriCredit's stock performance far outshines that of consumer-finance rivals Household International (HI Quote) and Associates First (AFS Quote), which are up 31% and 11%, respectively, over two months.

The Old and the New

The Fort Worth, Texas-based lender's just-released fiscal third-quarter financials were well-nigh perfect, and it's almost impossible to find a single bear on the stock, even among the hyper-critical short-sellers. Of course, monolithic bullishness about a stock is dangerous in itself, as even a speck of bad news can trigger a selloff. But, for the time being at least, the rosy view appears justified. ...