Ally Financial: Low Price, But Not Worth the Investment
June 18, 2023
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Ally Financial ($NYSE:ALLY) is a publicly traded company that offers a range of services, including consumer banking, corporate finance, and investment services. Despite its low cost and potential for returns, Ally Financial is not a good investment. The company trades at a low price compared to other financial institutions, but it has struggled to deliver on promises of growth and returns. Ally Financial’s stock price has been volatile in recent years. This led to a sharp decline in the company’s share price. The company also faces significant challenges in the future. Increased competition in the banking industry has put pressure on profits and could limit potential growth.
Additionally, the company is facing increasing regulatory scrutiny from the government. This has resulted in increased compliance costs, which will reduce profits and hamper future growth. Overall, Ally Financial offers a low-cost investment opportunity, but it is not worth the risk. The stock has been volatile in recent years and the company faces significant challenges in the future that could limit potential growth. Therefore, investors should think carefully before investing in this company.
Price History
Friday marked a disappointing day for investors in ALLY FINANCIAL. The company’s stock opened at $28.5 but closed at $28.0, down by 1.4% from the prior closing price of 28.4. This marked the lowest closing price in the past five trading sessions and highlights the fact that ALLY FINANCIAL may not be worth the investment right now.
While the price is low, there is no guarantee that it will stay that way, or if it will be able to make a strong comeback. Investors should be cautious when considering investing in ALLY FINANCIAL, as the recent dip in the stock price is a sign that there may be significant risk involved. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Ally Financial. More…
| Total Revenues | Net Income | Net Margin |
| 9.23k | 1.27k | 14.9% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Ally Financial. More…
| Operations | Investing | Financing |
| 6.25k | -17.26k | 11.57k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Ally Financial. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 196.16k | 182.79k | 44.47 |
Key Ratios Snapshot
Some of the financial key ratios for Ally Financial are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 9.0% | – | – |
| FCF Margin | ROE | ROA |
| 29.4% | 9.0% | 0.6% |
Analysis
GoodWhale has conducted an assessment of ALLY FINANCIAL‘s fundamentals and based on the Star Chart, the company is classified as a ‘rhino’, which means that it has achieved moderate revenue or earnings growth. This kind of company might appeal to investors seeking a balance between dividend income and a moderate chance of capital appreciation. ALLY FINANCIAL has an intermediate health score of 6/10 when it comes to its cashflows and debt, which suggests that it might be able to safely ride out any crisis without the risk of bankruptcy. Moreover, the company is strong in terms of dividends, medium in terms of growth, and weak in terms of asset and profitability. These factors may help investors decide if ALLY FINANCIAL is the right investment for them. More…
Peers
The company competes with other online banking providers, such as Jumbo Finance Ltd, Avasara Finance Ltd, and Dharani Finance Ltd. Ally Financial Inc has a strong focus on providing a great customer experience, offering competitive rates and products, and providing excellent customer service.
– Jumbo Finance Ltd ($BSE:511730)
Avasara Finance Ltd is an Indian finance company that provides a range of financial products and services to individuals and businesses. The company has a market cap of 65.11M as of 2022 and a Return on Equity of -11.47%. The company offers products and services such as personal loans, home loans, business loans, credit cards, and investment products. Avasara Finance Ltd is headquartered in Mumbai, India.
– Avasara Finance Ltd ($BSE:511451)
Dharani Finance Ltd, a Non-Banking Financial Company, has a market cap of 35.31M as of 2022. The company’s Return on Equity is 0.1%. Dharani Finance Ltd is engaged in the business of providing financial services to the rural and semi-urban areas of Tamil Nadu. The company offers various products and services such asterm loans, working capital loans, vehicle loans, housing loans, and microfinance.
Summary
Ally Financial is trading at a cheap price, however the stock may not be worth investing in due to underlying structural challenges. There are concerns that the company’s profitability is being hindered by its heavy reliance on GM-related operations, as well as their increasing exposure to auto finance. Moreover, their high levels of debt create a risk of financial distress in the event of an economic downturn.
That said, the stock does offer some appealing fundamentals such as a relatively low price to earnings ratio. Investors should carefully consider the risks before investing in Ally Financial.
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