Benzinga - by Benzinga Insights, Benzinga Staff Writer.
Making a noteworthy insider sell on December 27, Douglas W Busk, Chief Treasury Officer at Credit Acceptance (NASDAQ:CACC), is reported in the latest SEC filing.
What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Wednesday showed that Busk sold 500 shares of Credit Acceptance. The total transaction amounted to $262,092.
Credit Acceptance's shares are actively trading at $535.38, experiencing a down of 0.0% during Thursday's morning session.
Delving into Credit Acceptance's Background Credit Acceptance Corp is a consumer finance company that specializes in automobile loans. These loans are offered through a U.S. nationwide network of automobile dealers that benefit from sales of vehicles to consumers who could otherwise not obtain financing. The company also benefits from repeat and referral sales, and from sales to customers responding to advertisements for financing, but qualify for traditional financing. The company derives its revenue from finance charges, premiums earned on the reinsurance of vehicle service contracts, and other fees. Of these, financing charges, including servicing fees, are by far the largest source of revenue.
Credit Acceptance: Financial Performance Dissected Revenue Growth: Credit Acceptance displayed positive results in 3 months. As of 30 September, 2023, the company achieved a solid revenue growth rate of approximately 3.36%. This indicates a notable increase in the company's top-line earnings. When compared to others in the Financials sector, the company faces challenges, achieving a growth rate lower than the average among peers.
Insights into Profitability:
- Gross Margin: The company excels with a remarkable gross margin of 67.52%, indicating superior cost efficiency and profitability compared to its industry peers.
- Earnings per Share (EPS): The company excels with an EPS that surpasses the industry average. With a current EPS of 5.47, Credit Acceptance showcases strong earnings per share.
Valuation Overview:
- Price to Earnings (P/E) Ratio: The current Price to Earnings ratio of 22.02 is higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.
- Price to Sales (P/S) Ratio: With a higher-than-average P/S ratio of 3.79, Credit Acceptance's stock is perceived as being overvalued in the market, particularly in relation to sales performance.
- EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Credit Acceptance's EV/EBITDA ratio stands at 26.81, surpassing industry benchmarks. This places the company in a position with a higher-than-average market valuation.
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Why Insider Transactions Are Important Considering insider transactions is valuable, but it's crucial to evaluate them in conjunction with other investment factors.
From a legal standpoint, the term "insider" pertains to any officer, director, or beneficial owner holding more than ten percent of a company's equity securities as outlined in Section 12 of the Securities Exchange Act of 1934. This encompasses executives in the c-suite and significant hedge funds. These insiders are mandated to inform the public of their transactions through a Form 4 filing, to be submitted within two business days of the transaction.
A company insider's new purchase is a indicator of their positive anticipation for a rise in the stock.
While insider sells may not necessarily reflect a bearish view and can be motivated by various factors.
Navigating the World of Insider Transaction Codes Navigating through the landscape of transactions, investors often prioritize those unfolding in the open market, precisely detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C signals the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.
Check Out The Full List Of Credit Acceptance's Insider Trades.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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