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GuruFocus Financial Strength Rank measures how strong a company’s financial situation is. It is based on these factors

1. The debt burden that the company has as measured by its Interest coverage (current year).
2. Debt to revenue ratio. The lower, the better
3. Altman Z-score.

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

Financial Strength : 5/10

vs
industry
vs
history
Cash to Debt 0.08
ALFI's Cash to Debt is ranked lower than
94% of the 984 Companies
in the Global Specialty Finance industry.

( Industry Median: 1.36 vs. ALFI: 0.08 )
Ranked among companies with meaningful Cash to Debt only.
ALFI' s 10-Year Cash to Debt Range
Min: 0.07  Med: 0.12 Max: N/A
Current: 0.08
Equity to Asset 0.09
ALFI's Equity to Asset is ranked lower than
65% of the 1355 Companies
in the Global Specialty Finance industry.

( Industry Median: 0.10 vs. ALFI: 0.09 )
Ranked among companies with meaningful Equity to Asset only.
ALFI' s 10-Year Equity to Asset Range
Min: 0.09  Med: 0.11 Max: 0.13
Current: 0.09
0.09
0.13
Interest Coverage 0.45
ALFI's Interest Coverage is ranked lower than
82% of the 1272 Companies
in the Global Specialty Finance industry.

( Industry Median: 1.60 vs. ALFI: 0.45 )
Ranked among companies with meaningful Interest Coverage only.
ALFI' s 10-Year Interest Coverage Range
Min: 0.11  Med: 0.15 Max: 0.45
Current: 0.45
0.11
0.45
F-Score: 5
WACC vs ROIC
3.34%
0.96%
WACC
ROIC
GuruFocus Profitability Rank ranks how profitable a company is and how likely the company’s business will stay that way. It is based on these factors:

1. Operating Margin
2. Trend of the Operating Margin (5-year average). The company with an uptrend profit margin has a higher rank.
••3. Consistency of the profitability
4. Piotroski F-Score
5. Predictability Rank•

The maximum rank is 10. A rank of 7 or higher means a higher profitability and may stay that way. A rank of 3 or lower indicates that the company has had trouble to make a profit.

Profitability Rank is not directly related to the Financial Strength Rank. But if a company is consistently profitable, its financial strength will be stronger.

Profitability & Growth : 5/10

vs
industry
vs
history
Operating margin (%) 25.61
ALFI's Operating margin (%) is ranked lower than
62% of the 1425 Companies
in the Global Specialty Finance industry.

( Industry Median: 30.25 vs. ALFI: 25.61 )
Ranked among companies with meaningful Operating margin (%) only.
ALFI' s 10-Year Operating margin (%) Range
Min: -111.4  Med: 9.94 Max: 26.79
Current: 25.61
-111.4
26.79
Net-margin (%) 30.19
ALFI's Net-margin (%) is ranked higher than
73% of the 1425 Companies
in the Global Specialty Finance industry.

( Industry Median: 22.01 vs. ALFI: 30.19 )
Ranked among companies with meaningful Net-margin (%) only.
ALFI' s 10-Year Net-margin (%) Range
Min: -166.04  Med: 11.27 Max: 26.79
Current: 30.19
-166.04
26.79
ROE (%) -0.18
ALFI's ROE (%) is ranked lower than
92% of the 1427 Companies
in the Global Specialty Finance industry.

( Industry Median: 8.44 vs. ALFI: -0.18 )
Ranked among companies with meaningful ROE (%) only.
ALFI' s 10-Year ROE (%) Range
Min: -7.67  Med: -4.04 Max: 5.96
Current: -0.18
-7.67
5.96
ROA (%) 0.89
ALFI's ROA (%) is ranked higher than
52% of the 1436 Companies
in the Global Specialty Finance industry.

( Industry Median: 0.87 vs. ALFI: 0.89 )
Ranked among companies with meaningful ROA (%) only.
ALFI' s 10-Year ROA (%) Range
Min: -0.09  Med: 0.65 Max: 1.25
Current: 0.89
-0.09
1.25
» ALFI's 10-Y Financials

Financials


Revenue & Net Income
Equity & Asset
Oprt. Cash Flow & Free Cash Flow

» Details

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Preferred stocks of Ally Financial Inc

SymbolPriceYieldDescription
ALFI1010.006.937 % Perp Pfd Shs Series -G- Reg-S
ALLYPRB25.958.17Fixed to Floating Rate Perp Pfd Shs Series -A-
GMSPZ0.000.007 % Perp Pfd Shs Series -G

Guru Investment Theses on Ally Financial Inc

Daniel Loeb Comments on Ally Financial - Jan 22, 2014

Third Point has invested across the capital structure of Ally Financial (ALFI), the former GMAC, throughout the company's multi-year reorganization. Today's Ally Financial ("Ally") fits the pattern of other profitable investments we have made: a highly successful, nearly-completed restructuring that remains undervalued, with an explosive earnings story led by a talented management team who are economically aligned with shareholders.

We invested initially in 2011 in Ally's unsecured debt and preferred securities because we believed market estimates of potential liabilities related to the company's w holly owned mortgage subsidiary, Rescap, were excessive. When Ally stopped funding its losses through direct loans and sought to distance itself from Rescap 's b allooning potential liabilities in 2012, Rescap filed Chapter 11. After nearly one year of creditor negotiations, Ally permanently settled all mortgage related liabilities for approximately $2 billion, a figure that was consistent with our expectations. During this period, Ally initiated a radical operational restructuring that included divesting all of its international operations and their associated $30 billion of assets and jettisoning Rescap, transforming Ally into a pure-play North American auto finance company with leading market share. 

Under normal conditions, a financial services company with $185 billion in assets undergoing a substantial restructuring would attract significant interest from investors. However, until November 2013, Ally remained 75% owned by the US government, under the terms of the Federal government bailout of General Motors during the financial crisis. With Ally's debt in struments trading above par following Rescap's bankruptcy filing , distressed players moved on to other opportunities and traditional equity investors dismissed the opportunity given the small float. Over the past six months, we have become one of Ally's largest shareholders, acquiring approximately 9.5% of the company in a series of private transactions.

Ally has announced a strategic plan to achieve increased profitability driven by improved cost of funding and balance sheet optimization, reduction in structural costs associated with divested international assets, and the easing of regulatory constraints still remaining due to the legacy Rescap relationship and government ownership. It has already begun reducing its high-cost funding structure through liability management, and recently received upgrades from S&P, Moody's , and Fitch, putting most of its debt instruments within striking distance of investment grade. The $1.3 billion primary capital raise in Q3 has strengthened Ally's capital metrics and should allow for greater future regulatory flexibility, mainly via increased funding from its rapidly growing online bank which has more than $50 billion in deposits. Last week's successful placement reduced the governmen t's holdings to 37 %. Finally, Ally recently received Fed approval for its Financial Holding Company application, a designation that will allow it to keep its competitive advantage of serving as a "one stop shop" for auto dealers providing retail and wholesale financing, insurance, and auction services.

Our confidence in Ally's ability to execute on its ambitious restructuring plan is driven by the leadership of Mike Carpenter, its talented CEO, and the company's deep management bench. In the last 12 months, Mr. Carpenter has guided Ally through one of the largest and fastest restructurings we have witnessed. Divesting $30 billion of assets on four continents and resolving a highly complex bankruptcy of a subsidiary are only the beginning of the story from this team, and we expect them to execute on their multi-year plan to significantly increase All y's earnings. Nearer-term, we believe Ally will be in a position to exit TARP with full government repayment during 2014, most likely through an IPO. Ally's underlying assets are low risk, with normalized credit losses of ~50bps and peak losses during the crisis of only ~100bps. The assets are short duration, typically 2½ to 3 years, resulting in a balance sheet that can quickly benefit from rising rates. These factors have led both debt and equity investors historically to apply low cost of capital requirements to securities backed by auto loans. We believe Ally is poised to grow its capital base and ultimately achieve a multiple significantly in excess of 1.0x book value, well above the valuation of our purchase levels.

From Daniel Loeb (Trades, Portfolio)'s Third Point fourth quarter 2013 commentary.

Check out Daniel Loeb latest stock trades

Ratios

vs
industry
vs
history
Forward P/E 9.19
ALFI's Forward P/E is ranked higher than
74% of the 714 Companies
in the Global Specialty Finance industry.

( Industry Median: 11.85 vs. ALFI: 9.19 )
Ranked among companies with meaningful Forward P/E only.
N/A
P/B 0.78
ALFI's P/B is ranked higher than
72% of the 1370 Companies
in the Global Specialty Finance industry.

( Industry Median: 1.06 vs. ALFI: 0.78 )
Ranked among companies with meaningful P/B only.
ALFI' s 10-Year P/B Range
Min: 0.64  Med: 0.81 Max: 1.01
Current: 0.78
0.64
1.01
P/S 2.36
ALFI's P/S is ranked higher than
62% of the 1409 Companies
in the Global Specialty Finance industry.

( Industry Median: 2.86 vs. ALFI: 2.36 )
Ranked among companies with meaningful P/S only.
ALFI' s 10-Year P/S Range
Min: 1.94  Med: 2.36 Max: 2.78
Current: 2.36
1.94
2.78
POCF 2.91
ALFI's POCF is ranked higher than
77% of the 956 Companies
in the Global Specialty Finance industry.

( Industry Median: 9.00 vs. ALFI: 2.91 )
Ranked among companies with meaningful POCF only.
ALFI' s 10-Year POCF Range
Min: 2.65  Med: 4.03 Max: 28.03
Current: 2.91
2.65
28.03
EV-to-EBIT 70.63
ALFI's EV-to-EBIT is ranked lower than
95% of the 1284 Companies
in the Global Specialty Finance industry.

( Industry Median: 13.41 vs. ALFI: 70.63 )
Ranked among companies with meaningful EV-to-EBIT only.
ALFI' s 10-Year EV-to-EBIT Range
Min: 61  Med: 70.40 Max: 114.9
Current: 70.63
61
114.9
Days Sales Outstanding 142.74
ALFI's Days Sales Outstanding is ranked lower than
83% of the 795 Companies
in the Global Specialty Finance industry.

( Industry Median: 34.20 vs. ALFI: 142.74 )
Ranked among companies with meaningful Days Sales Outstanding only.
ALFI' s 10-Year Days Sales Outstanding Range
Min: 104.17  Med: 138.11 Max: 8001.8
Current: 142.74
104.17
8001.8

Dividend & Buy Back

vs
industry
vs
history
Dividend Yield 6.93
ALFI's Dividend Yield is ranked lower than
101% of the 2258 Companies
in the Global Specialty Finance industry.

( Industry Median: 2.76 vs. ALFI: 6.93 )
Ranked among companies with meaningful Dividend Yield only.
ALFI' s 10-Year Dividend Yield Range
Min: 0  Med: 0.00 Max: 6.93
Current: 6.93
0
6.93
Yield on cost (5-Year) 6.93
ALFI's Yield on cost (5-Year) is ranked lower than
101% of the 2253 Companies
in the Global Specialty Finance industry.

( Industry Median: 3.23 vs. ALFI: 6.93 )
Ranked among companies with meaningful Yield on cost (5-Year) only.
ALFI' s 10-Year Yield on cost (5-Year) Range
Min: 0  Med: 0.00 Max: 0
Current: 6.93
Share Buyback Rate -5.30
ALFI's Share Buyback Rate is ranked lower than
66% of the 1013 Companies
in the Global Specialty Finance industry.

( Industry Median: -1.90 vs. ALFI: -5.30 )
Ranked among companies with meaningful Share Buyback Rate only.
ALFI' s 10-Year Share Buyback Rate Range
Min: -5.3  Med: -19.20 Max: -36
Current: -5.3

Valuation & Return

vs
industry
vs
history
Price/Tangible Book 0.78
ALFI's Price/Tangible Book is ranked higher than
75% of the 1347 Companies
in the Global Specialty Finance industry.

( Industry Median: 1.13 vs. ALFI: 0.78 )
Ranked among companies with meaningful Price/Tangible Book only.
ALFI' s 10-Year Price/Tangible Book Range
Min: 0.69  Med: 0.80 Max: 1.01
Current: 0.78
0.69
1.01
Price/Median PS Value 1.00
ALFI's Price/Median PS Value is ranked higher than
56% of the 1310 Companies
in the Global Specialty Finance industry.

( Industry Median: 1.04 vs. ALFI: 1.00 )
Ranked among companies with meaningful Price/Median PS Value only.
ALFI' s 10-Year Price/Median PS Value Range
Min: 0.93  Med: 1.01 Max: 1.17
Current: 1
0.93
1.17
Price/Graham Number 0.67
ALFI's Price/Graham Number is ranked higher than
66% of the 1181 Companies
in the Global Specialty Finance industry.

( Industry Median: 0.82 vs. ALFI: 0.67 )
Ranked among companies with meaningful Price/Graham Number only.
ALFI' s 10-Year Price/Graham Number Range
Min: 0.56  Med: 0.67 Max: 1
Current: 0.67
0.56
1
Earnings Yield (Greenblatt) (%) 1.40
ALFI's Earnings Yield (Greenblatt) (%) is ranked lower than
86% of the 1408 Companies
in the Global Specialty Finance industry.

( Industry Median: 6.80 vs. ALFI: 1.40 )
Ranked among companies with meaningful Earnings Yield (Greenblatt) (%) only.
ALFI' s 10-Year Earnings Yield (Greenblatt) (%) Range
Min: 0.9  Med: 1.40 Max: 1.6
Current: 1.4
0.9
1.6
Forward Rate of Return (Yacktman) (%) -5.63
ALFI's Forward Rate of Return (Yacktman) (%) is ranked lower than
83% of the 792 Companies
in the Global Specialty Finance industry.

( Industry Median: 14.82 vs. ALFI: -5.63 )
Ranked among companies with meaningful Forward Rate of Return (Yacktman) (%) only.
ALFI' s 10-Year Forward Rate of Return (Yacktman) (%) Range
Min: -5.6  Med: -5.60 Max: -5.6
Current: -5.63

Business Description

Industry: Banks » Specialty Finance
Compare: » details
Traded in other countries:ALLYPRB.USA, ALLY.USA, GMZ.Germany,
Ally Financial Inc was founded in 1919. The Company is an independent, automotive financial services firm. The Company is engaged in Dealer Financial Services and Mortgage, Corporate and Other business. Dealer Financial Services includes its Automotive Finance operations and Insurance operations. Its primary customers are automotive dealers, which are typically independently owned businesses. Dealer Financial Services operations offer financial services and insurance products to approximately 17,000 automotive dealerships and approximately 4.4 million of their retail customers. Automotive Finance operations consist of automotive finance business generated in the United States. The commercial automotive financing operations fund dealer inventory purchases of new and used vehicles, commonly referred to as wholesale or floorplan financing. Its Insurance operations offer both consumer finance protection and insurance products sold through the automotive dealer channel, and commercial insurance products sold directly to dealers. It offers dealers consumer financial and insurance products, it provides vehicle service contracts, maintenance coverage, and GAP products. The vehicle service contracts for retail customers offer owners and lessees mechanical repair protection and roadside assistance for new and used vehicles beyond the manufacturer's new vehicle warranty. Consumer mortgage consists of first mortgage, subordinate-lien mortgages and home equity loans. Commercial & industrial mortgage consists of warehouse lending. Corporate and Other consists of its Commercial Finance Group, its centralized corporate treasury activities, such as management of the cash and corporate investment securities portfolios, short- and long-term debt, retail and brokered deposit liabilities, derivative instruments, the amortization of the discount associated with debt issuance and bond exchanges, and the residual impacts of its corporate funds-transfer pricing (FTP) and treasury asset liability management (ALM) activities. Ally Bank, a banking subsidiary of Company, raises deposits directly from customers through direct banking via the internet, telephone, mobile, and mail channels. It offers deposit product offerings including savings and money market accounts, certificates of deposit, interest-bearing checking accounts, trust accounts, and individual retirement accounts. The insurance business faces competition from automotive manufacturers, insurance carriers, third-party administrators, brokers, and other insurance-related companies. Ally Bank faces competition from commercial banks, savings institutions, and other financial institutions. The Company is subject to various regulatory, financial, and other requirements of the jurisdictions in which its businesses operate.

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