Author Topic: LEAP Puts on Sub Prime Auto Lenders  (Read 15046 times)

DRValue

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Re: LEAP Puts on Sub Prime Auto Lenders
« Reply #40 on: August 23, 2018, 01:24:31 AM »
I heard the other day that used car prices are the highest they've ever been. Which made me think of this thread. It could almost be time for puts.
[E]xpedience does not license omnipotence.

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Cigarbutt

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Re: LEAP Puts on Sub Prime Auto Lenders
« Reply #41 on: August 23, 2018, 05:40:34 AM »
I heard the other day that used car prices are the highest they've ever been. Which made me think of this thread. It could almost be time for puts.
https://publish.manheim.com/en/services/consulting/used-vehicle-value-index.html

"The strange summer price appreciation in used cars is partly a function of a strong economy at its peak, with mounting affordability challenges for the consumer that favor growth in used vehicle sales at the expense of new. These conditions have supported strong used vehicle prices for over a year. The catalyst for even stronger price movement this summer is the fear of import tariffs’ leading to higher prices in the future. Higher prices and the related declining level of supply create a psychological feedback loop for consumers, encouraging buying now with the expectation that prices may be higher later."

The numbers suggest the possibility that we are quite late in this cycle but who knows?
CACC is up 36,3% since this "short" thread was initiated 5 short months ago...

DRValue

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Re: LEAP Puts on Sub Prime Auto Lenders
« Reply #42 on: August 23, 2018, 10:06:45 AM »
I'll check out put prices over the weekend.
[E]xpedience does not license omnipotence.

Not Investment Advice. Do Your Own Research.

Cigarbutt

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Re: LEAP Puts on Sub Prime Auto Lenders
« Reply #43 on: September 12, 2018, 04:46:38 PM »
Interesting perspective about credit growth outpacing provisions and as to why Fiat and Subaru may have outperformed.
https://insight.factset.com/car-companies-face-liquidity-risks-due-to-rising-auto-loan-delinquencies?utm_campaign=Insight&utm_source=hs_email&utm_medium=email&utm_content=65839202&_hsenc=p2ANqtz-8ft7T0EpIaJFIXS0bQ3026HG9zP9_nGYVOiDl3ffIkFAqf8_7MrVTc680WHDy4r4oa51AOfycuJeKHAIQsRfrnAE644A&_hsmi=65839202

At the same time, Credit Acceptance (which is the main idea behind this thread) keeps recording gradually higher provisions for credit losses but this negative trend is drowned by a very strong growth in the number of loans and a 35% growth in the dollar amount of loans over the past year. The size of the loans keeps getting bigger while the credit scores keep going lower. (?)

What I'm trying to analyze now is the significance of the increase in the volume of borrowers rolling negative equity from an old loan to a new loan, as trees don't grow to the sky.

Cigarbutt

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nspo

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Re: LEAP Puts on Sub Prime Auto Lenders
« Reply #45 on: April 21, 2020, 11:49:52 AM »
https://publish.manheim.com/en/services/consulting/used-vehicle-value-index.html
https://www.sec.gov/ix?doc=/Archives/edgar/data/885550/000088555020000042/cacc8k20200420.htm
Livin' it up when I'm goin' down
Lovin' it up 'til I hit the ground
-Aerosmith

Cigarbutt, do you see ways to play the decline in used car prices from the long side? I haven't jumped in yet but things like LKQ and AMA look interesting from a value perspective. Not sure if there's much correlation but worth a thought. Thanks

Castanza

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Re: LEAP Puts on Sub Prime Auto Lenders
« Reply #46 on: April 21, 2020, 11:58:01 AM »
SC - Santander Consumer USA

Maybe?

Cigarbutt

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Re: LEAP Puts on Sub Prime Auto Lenders
« Reply #47 on: April 21, 2020, 02:35:42 PM »
https://publish.manheim.com/en/services/consulting/used-vehicle-value-index.html
https://www.sec.gov/ix?doc=/Archives/edgar/data/885550/000088555020000042/cacc8k20200420.htm
Livin' it up when I'm goin' down
Lovin' it up 'til I hit the ground
-Aerosmith
Cigarbutt, do you see ways to play the decline in used car prices from the long side? I haven't jumped in yet but things like LKQ and AMA look interesting from a value perspective. Not sure if there's much correlation but worth a thought. Thanks
That's an interesting angle (auto parts and the DIY aspect, using Snap-on tools would be a +  :) ). What's AMA? More seriously, i haven't looked at this segment in a while and perhaps should. I remember having a deeper look at LKQ some years ago but felt like late to the party.
The angle of this thread is more about CACC (and also SC i guess) and how money could be made. i continue to think that a long position could eventually make sense but wonder if stars are aligning for a profit opportunity on the down side?

nspo

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Re: LEAP Puts on Sub Prime Auto Lenders
« Reply #48 on: April 22, 2020, 06:00:08 AM »
Ha, yes maybe I'll go spend a small fortune on a socket set  8). AMA is an idea I saw on here posted by Spek I believe. It's an Australian auto body company that's rolling up a lot of the industry (cursory research). LKQ is interesting, just wonder how many people are going to junkyards right now. They do ship parts as well but still some hair on it. I might have to start a separate thread on all auto-related DIY/aftermarket. The dealerships (Cambria) are taking a beating as well. Best

RadMan24

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Re: LEAP Puts on Sub Prime Auto Lenders
« Reply #49 on: April 22, 2020, 06:01:30 PM »
https://publish.manheim.com/en/services/consulting/used-vehicle-value-index.html
https://www.sec.gov/ix?doc=/Archives/edgar/data/885550/000088555020000042/cacc8k20200420.htm
Livin' it up when I'm goin' down
Lovin' it up 'til I hit the ground
-Aerosmith

Cigarbutt, do you see ways to play the decline in used car prices from the long side? I haven't jumped in yet but things like LKQ and AMA look interesting from a value perspective. Not sure if there's much correlation but worth a thought. Thanks

Carmax.