William_Potter Introduction The banking and financial services sector has been undervalued for an extended period of time due to recency bias associated with the 2007/2008 financial crisis. Emerging market risk only reinforces these valuations, which results in many banks trading at mid to high single-digit earnings that do not reflect the lower discount rate deserved by stringent capital and liquidity regulatory requirements implemented subsequent to the crisis. Ironically, a recession may be the catalyst needed for high-quality banks to receive the multiple they deserve. Ally Financial is an easy-to-understand business that lends and insures the new and used auto industry, which it funds with low-cost sticky deposits. Investment Thesis Ally Financial (NYSE: ALLY ) is a leading digital financial services company with over 100 years of experience. It serves a broad range of customers, including consumers, dealers, and corporate clients, offering various financial products and services such as auto financing, commercial finance, insurance, and online banking. Ally Financial is an undervalued investment opportunity trading at 1x tangible book value. Management has guided to 16-18% normalized ROTCE, implying a mid-single-digit earnings multiple. Ally Financial has over-earned in recent quarters (mid-20% ROTCE), but management has incorporated a 30% point-to-point reduction in […]
K&X Design and Investment Technology, LLC
Invest The Invisible Impact
K&X Design and Investment Technology, LLC
Invest The Invisible Impact
