Is Credit Acceptance Corp. (NASDAQ:CACC) a buy, sell, or hold? The best stock pickers are taking a pessimistic view. The number of long hedge fund bets retreated by 2 lately.
In the 21st century investor’s toolkit, there are a multitude of gauges investors can use to analyze Mr. Market. A couple of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best fund managers can outperform their index-focused peers by a very impressive amount (see just how much).
Just as integral, optimistic insider trading activity is another way to parse down the world of equities. Obviously, there are many stimuli for a corporate insider to get rid of shares of his or her company, but just one, very obvious reason why they would behave bullishly. Several empirical studies have demonstrated the valuable potential of this tactic if shareholders know where to look (learn more here).
Consequently, it’s important to take a glance at the key action encompassing Credit Acceptance Corp. (NASDAQ:CACC).
What does the smart money think about Credit Acceptance Corp. (NASDAQ:CACC)?
At Q1’s end, a total of 7 of the hedge funds we track were long in this stock, a change of -22% from the previous quarter. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings significantly.
When looking at the hedgies we track, Renaissance Technologies, managed by Jim Simons, holds the most valuable position in Credit Acceptance Corp. (NASDAQ:CACC). Renaissance Technologies has a $44.4 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is William von Mueffling of Cantillon Capital Management, with a $37.1 million position; the fund has 1.2% of its 13F portfolio invested in the stock. Some other hedge funds with similar optimism include Quincy Lee’s Ancient Art (Teton Capital), Edward Goodnow’s Goodnow Investment Group and Cliff Asness’s AQR Capital Management.
Judging by the fact that Credit Acceptance Corp. (NASDAQ:CACC) has witnessed falling interest from the smart money, it’s easy to see that there was a specific group of fund managers that slashed their entire stakes in Q1. It’s worth mentioning that Mike Vranos’s Ellington dumped the biggest stake of all the hedgies we key on, totaling close to $0.4 million in stock., and Steven Cohen of SAC Capital Advisors was right behind this move, as the fund sold off about $0.2 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 2 funds in Q1.
What do corporate executives and insiders think about Credit Acceptance Corp. (NASDAQ:CACC)?
Insider trading activity, especially when it’s bullish, is most useful when the primary stock in question has experienced transactions within the past six months. Over the latest half-year time frame, Credit Acceptance Corp. (NASDAQ:CACC) has experienced zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Credit Acceptance Corp. (NASDAQ:CACC). These stocks are PHH Corporation (NYSE:PHH), Cash America International, Inc. (NYSE:CSH), Nelnet, Inc. (NYSE:NNI), First Cash Financial Services, Inc. (NASDAQ:FCFS), and CapitalSource, Inc. (NYSE:CSE). This group of stocks are in the credit services industry and their market caps match CACC’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| PHH Corporation (NYSE:PHH) | 30 | 0 | 2 |
| Cash America International, Inc. (NYSE:CSH) | 11 | 0 | 4 |
| Nelnet, Inc. (NYSE:NNI) | 15 | 0 | 2 |
| First Cash Financial Services, Inc. (NASDAQ:FCFS) | 8 | 0 | 4 |
| CapitalSource, Inc. (NYSE:CSE) | 15 | 0 | 3 |
With the results exhibited by the aforementioned research, retail investors should always keep an eye on hedge fund and insider trading activity, and Credit Acceptance Corp. (NASDAQ:CACC) applies perfectly to this mantra.
