Prescott General Partners sells over $5 million in Credit Acceptance Corp stock

Prescott General Partners LLC, a significant shareholder in Credit Acceptance Corp (NASDAQ:CACC ), has recently sold a substantial number of shares in the company. The transaction, which took place on September 17, involved the sale of 11,586 shares at a price of $444.9103 per share, amounting to a total of $5,154,730.

This sale by Prescott General Partners, which is known for its strategic investment decisions, could be of interest to investors who closely monitor insider and significant shareholder transactions. The shares sold were held indirectly by Prescott International Partners L.P., as disclosed in the footnotes of the ownership document. Prescott General Partners LLC, as the general partner of Prescott International Partners L.P., has stated that it disclaims beneficial ownership of these shares except to the extent of its pecuniary interest.

Following the sale, Prescott General Partners LLC still holds a substantial number of shares in Credit Acceptance Corp indirectly through its partnerships. Specifically, Prescott Associates L.P. owns 1,007,057 shares, and Idoya Partners L.P. owns 511,337 shares, as per the latest SEC filings.

The sale does not necessarily reflect a change in the company's fundamentals but is a transaction that investors may want to consider as part of their overall assessment of the market and Credit Acceptance Corp.

Credit Acceptance Corp, headquartered in Southfield, Michigan, specializes in providing auto loans and related financial products. The company's stock performance and insider transactions are often watched by investors for insights into both the company's and the industry's financial health.

Investors and market analysts often keep an eye on such transactions as they can provide valuable insights into an insider's view of the company's value. However, it is also important to consider a wider range of factors when evaluating the potential impact of insider trades on stock performance and investment decisions.



In other recent news, Credit Acceptance Corporation reported a mixed financial performance for Q2 of 2024. Despite facing challenges with underperforming collections and originations, particularly from the 2022 and 2023 loan vintages, the company's loan portfolio reached a record high of $8.6 billion. This required a significant adjustment of $147 million to the anticipated net cash flows.

Credit Acceptance remains confident in its business model's capacity to generate substantial economic profit per share in the face of these developments. The company has also updated its credit facility definitions to align with its level yield accounting evaluation method.

In addition to these adjustments, Credit Acceptance has been investing in technology and expanding its dealer network, actions that are expected to drive future growth. However, the company remains cautious in its future predictions due to macro uncertainties. These are among the recent developments at Credit Acceptance Corporation.
InvestingPro Insights


As Prescott General Partners LLC adjusts its holdings in Credit Acceptance Corp (CACC), investors might look to recent metrics and expert analysis to gauge the company's current financial health and future prospects. According to InvestingPro data, Credit Acceptance Corp has a market capitalization of approximately $5.63 billion, reflecting its standing in the financial sector. Despite market fluctuations, the company's P/E ratio stands at 32.14, which, although high, has adjusted down to 27.9 over the last twelve months as of Q2 2024. This suggests that investors are paying less for each dollar of earnings than they were in the past, potentially indicating improved earnings or investor sentiment.

One of the InvestingPro Tips highlights that management has been aggressively buying back shares, which can be a sign of confidence in the company's valuation and future performance. Share buybacks often aim to reduce the number of shares available in the market, potentially increasing the value of remaining shares. Additionally, Credit Acceptance Corp's liquid assets have been reported to exceed its short-term obligations, which underscores the company's ability to meet its immediate financial liabilities and could be reassuring for investors concerned about financial stability.

While the Prescott General Partners LLC sale might draw attention, it's worth noting that Credit Acceptance Corp is still predicted to be profitable this year, as per another InvestingPro Tip. This is supported by the company's strong gross profit margin of 91.36% over the last twelve months as of Q2 2024, indicating efficient control over its cost of goods sold and a robust business model. Investors contemplating the implications of insider selling may find solace in such financial robustness.

For those looking for a deeper dive into Credit Acceptance Corp's financials, InvestingPro offers additional tips and insights at https://www.investing.com/pro/CACC, including further analyst earnings revisions and the company's earnings multiples.

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Source: Investing.com