Car and truck sales remain relatively strong, with the auto dealership group ranking 49th on Investor’s Business Daily’s list of 197 industry groups. Credit acceptance (CCCC) is a leader in providing credit to these car buyers, and its stock is outperforming the market. The relative strength rating (RS) for credit-accepting stocks hit a higher percentile on Wednesday, as it climbed to 73 from 69 the previous day.
With the rating upgrade, credit accepting stocks are moving closer to a benchmark for top stocks. Market research shows that the biggest gainers in stocks tend to have an RS rating of 80 or higher at the start of their moves. See if credit acceptance can continue to rebound and reach this benchmark.
Stock of credit acceptance among the largest 13%
Among its other key ratings, the credit accepting stock has an IBD composite rating of 87, IBD’s full rating that combines its other top five ratings. The auto lender also has an outstanding EPS rating of 91 and a B Capitalization/Distribution Rating. The B rating shows that mutual funds and other institutions are fairly large buyers of credit-accepting stocks.
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The fundamentals of the Toledo, Michigan-based company are solid. Credit Acceptance reported a 26% increase in earnings to $14.94 per share last quarter. The previous three stanzas, his EPS increased by 218%, 16% and then 55%. Sales have continued to grow, but at a moderate pace recently. In its most recent quarter, sales increased 1% to $455.7 million. Seek to improve this.
The stock of credit acceptance fell to a low of 452.48 on June 30 amid this year’s bear market and then rallied. It traded as low as 545 on Wednesday afternoon and was on track for a fourth consecutive close higher. Then it reversed on Wednesday afternoon as the market turned mixed, although it held above its 50-day line.
Credit acceptance is not close to a sweet spot right now. See if it continues to form and break away from an appropriate chart pattern, such as a three week pantyhose or a cup base with handle. Look for the next report in or around July. 29.
Lending industry peers
The Credit Acceptance stock ranks third among its peers in the Finance-Consumer Lending industry group. Nelnet (NNI) and Consumer portfolio (SCSP) are also among the highest rated stocks in the group.
When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength.
This proprietary relative strength rating from Investor’s Business Daily identifies market leadership with a score from 1 (worst) to 99 (best). The score shows how a stock’s price movement over the past 52 weeks compares to all other stocks in our database.
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