Rick Fujimoto of Silverado Investment Partners presented his in-depth investment thesis on Credit Acceptance (Nasdaq: CACC) at Best Ideas 2018.
Credit Acceptance provides financing programs and related products and services to automobile dealers in the U.S. It advances money to dealers in exchange for the right to service underlying consumer loans for a fee. It then partners with dealers on the additional collection of payments. CACC also purchases consumer loans dealers have originated, whereby it collects and keeps all customer loan payments. CACC enjoys solid competitive advantages over peers evidenced by its superior performance and returns on capital.
Management has a proven track record of creating shareholder value by fueling growth and repurchasing shares below intrinsic value. Management also collectively owns a significant share of the company.
While the quality of CACC’s business and track record of growth suggest it deserves a premium market multiple, it trades at a substantial discount to the market average.
About the instructor:
Rick Fujimoto is managing partner of Silverado Investment Partners LP, a value-based investment partnership started in 2009 in Irvine, CA. Silverado was founded on the value investing principles made famous by Warren Buffett. Its objective is to produce market-beating returns by investing in undervalued companies. Through its 10-year existence, Silverado has returned more than 12% per year to investors after all fees and expenses. Rick holds a Bachelor of Science Degree in Business Administration from Pepperdine University and an MBA from Azusa Pacific University. He lives in La Verne, CA with his wife and two children.
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