Giverny Capital: “Credit Acceptance (CACC) is Poorly Understood”

Giverny Capital, an asset management firm, published its first-quarter 2022 investor letter – a copy of which can be downloaded here. For the first quarter of 2022, Giverny Capital Asset Management’s model portfolio declined by 8.21%, net of fees, vs. a decline of 4.60% for the Standard & Poor’s 500 Index. For the trailing twelve-month period, the GCAM model generated a return of 9.63% vs. 15.65% for the Index, also net of fees. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, Giverny Capital Asset Management mentioned Credit Acceptance Corporation (NASDAQ:CACC) and explained its insights for the company. Founded in 1972, Credit Acceptance Corporation (NASDAQ:CACC)  is a Southfield, Michigan-based auto finance company with a $7.5 billion market capitalization. Credit Acceptance Corporation (NASDAQ:CACC)  delivered a -21.79% return since the beginning of the year, while its 12-month returns are up by 36.24%. The stock closed at $537.85 per share on April 28, 2022.

Here is what Giverny Capital Asset Management has to say about Credit Acceptance Corporation (NASDAQ:CACC) in its Q1 2022 investor letter:

“I wrote at some length about Credit Acceptance in my last letter and won’t repeat myself. [Our letters are on our www.givernycam.com website]. This business is poorly understood, and the stock tends to be volatile. Management bought back 10% of its outstanding shares in 2021, on top of a 5% buyback in 2020. That tells me a lot about how they feel about their future.”

Our calculations show that Credit Acceptance Corporation (NASDAQ:CACC) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Credit Acceptance Corporation (NASDAQ:CACC) was in 26 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 25 funds in the previous quarter. Credit Acceptance Corporation (NASDAQ:CACC) delivered a 1.23% return in the past 3 months.

In March 2022, we also shared another hedge fund’s views on Credit Acceptance Corporation (NASDAQ:CACC) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

Disclosure: None. This article is originally published at Insider Monkey.