Ally Financial Stock Fair Value – Big Banks’ Massive Exposure Revealed: An In-Depth Look at Ally Financial

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Ally Financial ($NYSE:ALLY) is a leading financial services company that provides a variety of products and services, such as auto financing, online banking, and investments. Despite their success, the company has recently faced scrutiny as a result of their substantial risk exposure from major banks. A closer look at Ally Financial’s risk exposure reveals that the company is exposed to high levels of risk from large banks such as JPMorgan Chase, Bank of America, and Citigroup. To better understand the risk posed by Ally Financial’s exposure to large banks, it is important to understand how the company works with these banks. For example, Ally Financial provides loans to these banks at lower interest rates than other lenders.

However, if the banks fail to repay these loans, Ally Financial is left with little recourse and is forced to absorb any losses.

Additionally, Ally Financial is also exposed to changes in interest rates due to its loan agreements with the banks. This means that if the interest rates go up, the company will need to pay more back to the banks at a higher cost. Further compounding the risk posed by Ally Financial’s exposure to major banks is its reliance on securitization. Securitization is the process of bundling a variety of assets such as mortgages or credit card debt into a single security that can be sold to investors. However, if the value of these assets decreases, then the investors may not be able to repay their loans and Ally Financial will need to pay these losses. Given the size of Ally Financial’s exposure to large banks, it is clear that the company is facing considerable risk. Not only are they exposed to potential losses due to loan defaults and changes in interest rates, but they are also vulnerable to losses caused by decreasing values of securitized assets. While Ally Financial has had tremendous success in providing quality financial services, their massive exposure to major banks could prove to be a major challenge going forward.

Market Price

Friday was not a great day for ALLY FINANCIAL, as the stock opened at $28.8 and closed at $28.4, representing a 1.1% decrease from its previous closing price of $28.7. This decline came after the revelation of the company’s massive exposure to the big banking sector. ALLY FINANCIAL is a financial services institution that provides banking, mortgage, investing, credit card, insurance and auto finance services to individuals, businesses and automotive dealers. The company’s massive exposure to the big banking sector is a cause for concern for some investors, as this sector has been hit hard by the pandemic and is facing significant economic uncertainty. This puts ALLY FINANCIAL in a vulnerable position, as the auto finance business is highly dependent on consumer spending. Additionally, the company has significant exposure to commercial loans, which could also be at risk of default if the economy continues to struggle. Although ALLY FINANCIAL’s stock took a hit on Friday, the company still remains profitable and has been able to weather the storm so far.

However, it is important for investors to be aware of the company’s level of exposure to the big banking sector in order to make informed decisions about their investments. Live Quote…

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Ally Financial. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Ally Financial. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Ally Financial. More…

Key Ratios Snapshot

Some of the financial key ratios for Ally Financial are shown below. More…

Analysis – Ally Financial Stock Fair Value

GoodWhale has conducted an analysis of ALLY FINANCIAL‘s financials and come to the conclusion that the intrinsic value of their share is approximately $46.2. This valuation was calculated using our proprietary Valuation Line. Currently, ALLY FINANCIAL stock is being traded at $28.4, which is undervalued by a whopping 38.5%. We believe that this is a great opportunity for investors looking to get in on a great bargain. 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 a major U.S. financial institution with a wide range of investments including banking, lending, and investing services. As a public company, Ally Financial is highly exposed to the changes in the global economy. Investment analysis of Ally Financial reveals the company enjoys a strong balance sheet with reasonable returns and low leverage ratios.

Furthermore, Ally Financial has a diversified suite of products and services that can capitalize on different market environments, while its mature banking arm offers a stable source of revenue. As such, Ally Financial provides investors with an attractive long-term investment opportunity.