AmeriCredit Corp. (ACF)

Rated 1 star.

Making loans is easy. Collecting the principal and interest may not be. If the loans they are making are fixed rate and inflation becomes a big problem, then they will be paid back in lower valued US dollars. I don't see much up side to this company.

Hundreds of thousands of people are running out of unemployment benefits, and with unemployment continuing to climb I don't see any positives for this company.

Pretty soon everyone will be considered subprime

Where should I start: the fundamentals or the climate?? Their debt is too high, they're leaking cash, and they're unprofitable. Compound that with the fact that consumer credit is becoming a four-letter word and the price of oil is going back up (increasing likelihood of loan defaults) ... you begin to see where I'm headed with this. Until car credit and house credit and education loans and unsecured credit level out (and we're not nearly there yet, the road will continue to be rocky IMO.

I'm a buyer of ACF around 5-6 dollars a share, but I think the recent short squeeze put the shares WAY too high.

PF many buy sig yes

This company was individually screened to verify that during the boom years ('04-'08), their Balance Sheet expansion appeared excessive. The company operates within the FIRE (Financial Insurance Real Estate) sector of the economy which has been hot the past few decades, yet will run out of steam this coming decade. At some point or another, something's gotta give with this company. Income will start collapsing due to debt levels, and/or dividends will be slashed or removed, and/or significant losses will be realized. The chances of this being a growth company or having significant growth is heavily muted due to its dividend paying obligations at the current levels of today.
This company was personally found after using a screener.

After individually screening for companies appearing overvalued due to Balance sheet expansion, it yielded the following stocks to short:
EVR NTRS PRSP JEF LAZ FIS RJF ACF

For the heavy shorting within the FIRE sector as part of the above picks, I will offset them with the following longs relating to FIRE companies:
LONG on BX CVBF UTR

This will be the primary focus of this profile, to seek & obtain alpha from long/short dividend opportunities across various industries.
- ALPHADividend

Undervalued - Great Management! I cannot figure out away to kill this company. Way to import to fail! do you own valuation and you will figure it out! or Listen to Bruce Berkowitz manager of Fairholme Capital Mangement - Fairholme Fund (FARIX) www.fairholmefunds.com he breaks down why ACF is undervalued. FREE CASH!

Best of the subprimes always bounces back

a auto finance company that is good

rally picks

Berkowitz and Cumming, hard to go wrong with them

people gotta have cars. they'll default on their house payment before they default on their car payment. it will be rough sailing for a while. The only real opportunities to make big money in the market is to buy into panic ONLY AFTER determining that the panic is unfounded.

At least 2 legendary margin-of-safety investors have snapped this up.

LUK has bought 25% of the company (and they've got a huge war chest of liquidity that they could make available to the company if the market seize up further)

Fairholme funded has bought 10% of the company . . . and these guys mantra is "don't lose money".

I feel pretty comfortable going in alongside those guys.

It is this company's clients who are defaulting on their mortgages due to predatory lending. Look for them to default on their car loans as well. Meantime, the only vehicles being purchased are fuel efficient vehicles which typically must be purchased new from dealers. Lean times await this company in the pending economic crisis.

director buying shares

Berkowitz and Cumming are betting big on a turnaround and so am I.

Solid executive management will pull company out quickly from first losing quarter in a long time. Strongest non-prime indirect auto lender in the game!

Company is struggling with capital and constantly reducing in size