$ALLY Q2 Earnings Report
$ALLY Short
Ally Financial is a bank holding company that provides services in car finance, online banking, corporate lending, vehicle insurance, mortgage loans, and an electronic trading platform to trade financial assets. As a recession is coming, a financial stock like Ally is a questionable investment to own. The company not only could face the risk of customers not being able to pay auto loans, but they also have to deal with an auto industry still struggling to produce enough vehicles to meet demand. During their last quarter, they reported a near record-breaking number with a revenue of 2 billion Dollars, however, their stock still ended up going down with their stock only trading at around 35 Dollars. While the company had record net revenue, higher noninterest expenses and high-interest rates had a big impact on its profit. Other divisions in Ally continue to generate more profits however, Ally is still mostly focused on automotive finance where used car prices have gone up through the roof. On top of everything else, the customer’s credit scores are also becoming an issue. Many people aren’t able to pay their loans and therefore have their credit scores decreased. Through this, many customers won’t be able to qualify for a car loan. The biggest fear investors have is what the company has planned for the rest of the year. Ally definitely faces a bigger challenge this year after the federal government helped reduce loan charge-offs in the Covid recession and the company reported Q1 22 results back in mid-April before Fed rate hikes. The report also mentioned how the company continued to deal with supply chain challenges that left their inventories low which also meant revenues were affected. The company has also repurchased shares and recently had a cash balance of $3.6 billion which could hint at them already knowing their stock could go down. With the high-interest rates with potentially more rate hikes coming soon, the auto loan market will be volatile. Ally Financial will most likely face higher consequences if they continue to face low inventories this quarter. Adding more to the fire, they have a debt of 15 billion Dollars as of March 2022 with their revenue being only 3 billion, it's gonna be a hard task to pay it off. This will be one of those stocks where people won’t pay much attention to whether they beat the estimates or not. The most important thing to look for is what the company has planned for the future and how it will operate during a recession.
Top 10 Owners of Ally Financial Inc Stockholder Stake Shares owned Total value ($) Shares bought / sold Total change The Vanguard Group, Inc. 10.88% 35,160,328 1,178,222,591 +53,540 +0.15% Harris Associates LP 8.26% 26,673,412 893,826,036 +1,844,543 +7.43% BlackRock Fund Advisors 4.67% 15,087,902 505,595,596 -876,324 -5.49% Morgan Stanley Smith Barney LLC (... 4.44% 14,357,750 481,128,203 -260,989 -1.79% Berkshire Hathaway, Inc. (Investm... 2.78% 8,969,420 300,565,264 +8,969,420 -- SSgA Funds Management, Inc. 2.71% 8,749,404 293,192,528 +281,795 +3.33% Arrowstreet Capital LP 2.17% 7,004,137 234,708,631 -709,600 -9.20% Oaktree Capital Management LP 2.13% 6,874,687 230,370,761 0 0.00% Dimensional Fund Advisors LP 2.02% 6,513,100 218,253,981 +30,005 +0.46%
Why I chose this stock out of the other ones: Compared to the other stocks, this one had the least volatile and consistent percentage changes. While a big % of changes are good, they are also risky. This company is also based in the car and banking industry which I’m familiar with and have seen many stocks in this field coming out with their report so I’m confident in what I should be expecting from them. Ceo: Time: Before market open Estimate: -4%