Ally Financial: A Share Cannibal With a Growing Deposit Base (Ticker: ALLY) With Jacob Franklin
This week we brought on Jacob Franklin, an individual investor who writes over at Seeking Alpha. You can check-out his stuff here. We discussed Ally Financial stock, and here are some questions we asked him:
What is Ally Financial? How do they make money?
Banks are a mystery to a lot of investors. Can you review the basic metrics of what to track compared to a standard operating business?
What does Ally Financial do? Can you go through all of its important segments?
Ally’s retail deposit growth has been consistently strong. Why has this been the case? Do you think it can continue? Growth has stagnated recently.
How will interest rate changes affect this business? Thoughts on potentially deteriorating credit conditions nationwide?
What is Ally’s exposure to the automotive market? How do you think about this when evaluating the stock as a potential investment?
Thoughts on the growth of multi-product customers? How do they compete and steal share from incumbents (ex. BoFa) and/or other neo banks (ex. Chime/SoFi)?
Ally is aggressively buying back stock along with a 3.5%+ dividend yield. What do you think of this strategy?
Pre-mortem: How could an investment in Ally Financial go wrong?
Disclosure: The author and podcast guests are not your financial advisors. Ryan Henderson and Brett Schafer are general partners and portfolio managers at Arch Capital. Clients of Arch Capital may hold securities discussed on this show.