Private-label credit card issuer Alliance Data (ADS, Financial) cut 389 basis points from the Fund's return, as the stock dropped 61.7% from $112.20 to our average sales price of $42.99.* Alliance Data's retail partners were hit hard by the sharp drop in foot traffic caused by social distancing, so the company's revenue for operating retailers' credit card programs fell below the company's prior estimates. Meanwhile, investors dumped the stock, fearing that the jump in unemployment claims could lead to rising credit losses. Although we believed the company had the capital to withstand the year's economic turbulence, we sold our position to take advantage of more attractive long-term investments elsewhere.
From Jerome Dodson (Trades, Portfolio)'s Parnassus Endeavor Fund (Trades, Portfolio) fourth-quarter 2020 commentary.
