Ruane, Cunniff & Goldfarb, an investment adviser managing Sequoia Fund, released its Q4 2022 investor letter. A copy of the same can be downloaded here. In the fourth quarter, the fund returned 8.81% compared to a 7.56% return for the S&P 500 Index. The fund returned -30.52% in 2022 compared to -18.11% for the index. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.
Sequoia Fund highlighted stocks like Credit Acceptance Corporation (NASDAQ:CACC) in its Q4 2022 investor letter. Headquartered in Southfield, Michigan, Credit Acceptance Corporation (NASDAQ:CACC) is a financing company that advances money to automobile dealers. On March 20, 2023, Credit Acceptance Corporation (NASDAQ:CACC) stock closed at $408.7 per share. One-month return of Credit Acceptance Corporation (NASDAQ:CACC) was -7.43%, and its shares lost 19.80% of their value over the last 52 weeks. Credit Acceptance Corporation (NASDAQ:CACC) has a market capitalization of $5.39 billion.
Sequoia Fund made the following comment about Credit Acceptance Corporation (NASDAQ:CACC) in its Q4 2022 investor letter:
“After nearly doubling in 2021, Credit Acceptance Corporation (NASDAQ:CACC)’s shares declined significantly this year, as tight supplies in the used car market impacted the lender’s ability to grow its loan book. For full-year 2022, revenues and earnings are expected to be roughly flat. Versus 2019, revenues and EPS are expected to have compounded an annual rates of approximately 6% and 14%, respectively.
The earnings of Credit Acceptance in any given year reflect the size and performance of its book of outstanding loans, which is driven by the pace of underwriting activity of the previous few years, and the collection experience in the current year. 2022 was highly unusual, with the global shortage of semiconductor chips triggering a shortage of new automobiles, which in turn drove used car prices up by almost 50% from January 2021 to January 2022. This tightness in the used car market drove affordability down and shifted dealers’ focus to prime borrowers, reducing demand for Credit Acceptance’s loans given its position as lender of last resort for subprime credits. At the same time, collections on outstanding loans exceeded expectations thanks to low unemployment and lingering benefits from aggressive fiscal stimulus policies…” (Click here to read the full text)
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Credit Acceptance Corporation (NASDAQ:CACC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 23 hedge fund portfolios held Credit Acceptance Corporation (NASDAQ:CACC) at the end of the fourth quarter which was 25 in the previous quarter.
We discussed Credit Acceptance Corporation (NASDAQ:CACC) in another article and shared Giverny Capital’s views on the company. In addition, please check out our hedge fund investor letters Q4 2022 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
