Investment management company Curreen Capital released its fourth quarter 2024 Investor letter. A copy of the same can be downloaded here. In the fourth quarter, the fund returned 5.71% compared to 2.41% for the S&P 500 Index and -0.09% return for the MSCI World (US Gross). In 2024, the fund returned 7.72% underperforming 25.05% and 19.02% returns for the indexes. The firm believes that the underperformance in 2024 was affected by the same problems that affected the fund’s performance since late 2022. The stock market has taken longer time than the firm expected to acknowledge its undervalued ugly ducklings, despite the fact that the firm paid amazing prices and purchased excellent firms. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Curreen Capital highlighted stocks like Credit Acceptance Corporation (NASDAQ:CACC), in the fourth quarter 2024 investor letter. Credit Acceptance Corporation (NASDAQ:CACC) is a financing company that offers financing programs, and related products and services. The one-month return of Credit Acceptance Corporation (NASDAQ:CACC) was 11.71%, and its shares lost 4.79% of their value over the last 52 weeks. On January 23, 2025, Credit Acceptance Corporation (NASDAQ:CACC) stock closed at $524.14 per share with a market capitalization of $6.348 billion.
Curreen Capital stated the following regarding Credit Acceptance Corporation (NASDAQ:CACC) in its Q4 2024 investor letter:
“We sold Kambi in the quarter, reinvesting the proceeds into Credit Acceptance Corporation (NASDAQ:CACC). I grew uncomfortable with Kambi’s business – which has an element of many small steps forward, then one big step back. Kambi provides an outsourced sportsbook to gaming company customers, and as those customers grow, they tend to bring this task in-house. While the company has succeeded in growing over time, it continues to lose its most successful clients as they grow and develop their own sportsbooks. Kambi is a great solution for small companies entering new markets, but if economies of scale in the gaming industry drive consolidation over time, Kambi would face difficulties. When I compared this to Credit Acceptance, another company that grows over time, I preferred that we own Credit Acceptance. Both are attractively priced, but I am more confident in Credit Acceptance’s runway for growth. We received SEK 110.8 for our Kambi shares, and paid $449.61/share for Credit Acceptance
Credit Acceptance is a subprime auto lender, enabling subprime borrowers to buy vehicles from used car dealerships. The business has profitably gained share in a large and difficult market for more than two decades. Management allocates free cash flow to growing the business and repurchasing shares at attractive prices. Credit Acceptance currently trades at an attractive upside-to-downside ratio.”
A businessman signing a loan contract with a satisfied smile.
Credit Acceptance Corporation (NASDAQ:CACC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held Credit Acceptance Corporation (NASDAQ:CACC) at the end of the third quarter which was 28 in the previous quarter. While we acknowledge the potential of Credit Acceptance Corporation (NASDAQ:CACC) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Credit Acceptance Corporation (NASDAQ:CACC) and shared Curreen Capital’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q3 2024 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.