Jerome Dodson Comments on Alliance Data Systems

Guru stock highlight

Author's Avatar
Nov 01, 2016

We also added Alliance Data Systems (NYSE:ADS), known as ADS, an issuer of private label credit cards. ADS differentiates itself with leading digital marketing capabilities, which draw on a proprietary database of cardholder transactions to create personalized promotions for its retail partners. ADS generates the highest return on capital and the fastest growth rate in the credit card industry, but the stock has underperformed over the past year due to rising credit losses. ADS has maintained its underwriting standards, and the U.S. consumer is in good shape financially, so we expect credit losses to stabilize and the stock to rebound.

From Jerome Dodson (Trades, Portfolio)'s Parnassus Fund third-quarter 2016 commentary.