New Lifetime High Reached By Credit Acceptance (CACC)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Credit Acceptance ( CACC) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Credit Acceptance as such a stock due to the following factors:

  • CACC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $34.8 million.
  • CACC has traded 8,138 shares today.
  • CACC is trading at a new lifetime high.

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More details on CACC:

Credit Acceptance Corporation provides automobile dealers financing programs, and related products and services that enable them to sell vehicles to consumers. CACC has a PE ratio of 18. Currently there are no analysts that rate Credit Acceptance a buy, 3 analysts rate it a sell, and 3 rate it a hold.

The average volume for Credit Acceptance has been 52,200 shares per day over the past 30 days. Credit Acceptance has a market cap of $4.8 billion and is part of the financial sector and financial services industry. The stock has a beta of 0.49 and a short float of 7.2% with 3.75 days to cover. Shares are up 73.3% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Credit Acceptance as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 9.4%. Since the same quarter one year prior, revenues slightly increased by 9.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CREDIT ACCEPTANCE CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CREDIT ACCEPTANCE CORP increased its bottom line by earning $12.01 versus $10.59 in the prior year. This year, the market expects an improvement in earnings ($14.12 versus $12.01).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Consumer Finance industry. The net income increased by 43.6% when compared to the same quarter one year prior, rising from $49.80 million to $71.50 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Consumer Finance industry and the overall market, CREDIT ACCEPTANCE CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $117.40 million or 25.56% when compared to the same quarter last year. In addition, CREDIT ACCEPTANCE CORP has also vastly surpassed the industry average cash flow growth rate of -37.82%.

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