Miller Value Partners, an investment management company, released its “Deep Value Strategy” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The market rebound that began in April continued in the third quarter. Growth and momentum stocks continued to perform well, delivering double-digit returns, while the market began to broaden. Small and micro-cap value stocks achieved their best quarterly returns since Q4 2023. In the quarter, the Deep Value strategy appreciated by +26.5 ...

Core Insights - Bread Financial Holdings, Inc. will participate in the Goldman Sachs 2025 Financial Services Conference on December 10, 2025 [1] - The company's President and CEO Ralph Andretta, along with CFO Perry Beberman, will engage in a fireside chat at 1:40 p.m. ET, which will be broadcast live [2] Company Overview - Bread Financial is a tech-forward financial services company that offers personalized payment, lending, and saving solutions to millions of U.S. consumers [3] - The company provides general purpose credit cards and savings products, aiming to empower customers and enhance their quality of life [3] - Bread Financial also supports growth for recognized brands in various sectors through private label and co-brand credit cards, as well as pay-over-time products [3]

Core Insights - The article compares Bread Financial Holdings (BFH) and American Express (AXP) to determine which stock is more attractive to value investors [1] Valuation Metrics - BFH has a Zacks Rank of 2 (Buy), indicating a more favorable earnings estimate revision activity compared to AXP, which has a Zacks Rank of 3 (Hold) [3] - BFH's forward P/E ratio is 6.65, significantly lower than AXP's forward P/E of 23.59, suggesting that BFH may be undervalued [5] - The PEG ratio for BFH is 0.43, while AXP's PEG ratio is 1.64, indicating that BFH has a better valuation relative to its expected earnings growth [5] - BFH's P/B ratio is 0.93, compared to AXP's P/B of 7.73, further supporting the notion that BFH is undervalued [6] - Based on these metrics, BFH holds a Value grade of A, while AXP has a Value grade of C, making BFH a more attractive option for value investors [6]

Core Insights - The article emphasizes the importance of utilizing Zacks Premium for investors to enhance their stock market strategies and confidence in investing [1][9]. Zacks Style Scores - Zacks Style Scores are complementary indicators that rate stocks based on value, growth, and momentum methodologies, helping investors identify stocks likely to outperform the market in the short term [3][4]. - Each stock is rated from A to F based on its characteristics, with A indicating the highest potential for outperformance [4]. Value Score - The Value Score focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, and Price/Sales, appealing to value investors [4]. Growth Score - The Growth Score assesses a company's financial health and future outlook, considering projected and historical earnings, sales, and cash flow to find stocks with sustainable growth potential [5]. Momentum Score - The Momentum Score identifies optimal times to invest based on price trends and earnings estimate changes, catering to momentum traders [6]. VGM Score - The VGM Score combines the Value, Growth, and Momentum Scores, providing a comprehensive indicator for investors who utilize multiple investing styles [7]. Zacks Rank - The Zacks Rank is a proprietary stock-rating model that leverages earnings estimate revisions to guide investors in building successful portfolios [8]. - Stocks rated 1 (Strong Buy) have historically produced an average annual return of +23.93% since 1988, significantly outperforming the S&P 500 [9]. Stock Highlight: Bread Financial Holdings (BFH) - Bread Financial, a tech-forward financial services company, is currently rated 2 (Buy) on the Zacks Rank and has a VGM Score of A, indicating strong investment potential [12][13]. - The company has a forward P/E ratio of 6.65, making it attractive for value investors, and has seen positive earnings estimate revisions, with the consensus estimate for fiscal 2025 increasing by $1.81 to $10.14 per share [13][14].

Core Viewpoint - Momentum investing focuses on "buying high and selling higher," rather than traditional strategies of buying low and waiting for recovery [1] Group 1: Momentum Investing Strategy - Momentum investors often face challenges in determining the right entry point, as stocks can lose momentum when their valuations exceed future growth potential [2] - Investing in bargain stocks that exhibit recent price momentum can be a safer strategy, utilizing tools like the Zacks Momentum Style Score to identify potential opportunities [3] Group 2: Bread Financial Holdings (BFH) Analysis - Bread Financial Holdings (BFH) has shown a four-week price change of 9%, indicating growing investor interest [4] - BFH has gained 0.7% over the past 12 weeks, with a beta of 1.51, suggesting it moves 51% more than the market [5] - The stock has a Momentum Score of B, indicating a favorable time to invest [6] Group 3: Earnings Estimates and Valuation - An upward trend in earnings estimate revisions has contributed to BFH earning a Zacks Rank 2 (Buy), which is associated with strong momentum effects [7] - BFH is trading at a Price-to-Sales ratio of 0.66, suggesting it is undervalued, as investors pay only 66 cents for each dollar of sales [7] Group 4: Additional Opportunities - Besides BFH, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [8] - The Zacks Premium Screens offer over 45 strategies tailored to help investors find winning stock picks [9]

Company Performance - Bread Financial Holdings (BFH) has seen its stock price increase by 8.4% over the past month, reaching a new 52-week high of $68.72 [1] - Year-to-date, the stock has gained 10.5%, outperforming the Zacks Finance sector's 14.3% gain and the Zacks Financial - Miscellaneous Services industry's decline of 7.1% [1] Earnings and Revenue - The company has consistently beaten earnings estimates, reporting EPS of $4.02 against a consensus estimate of $2.11 in its last earnings report on October 23, 2025, and exceeding revenue estimates by 0.46% [2] - For the current fiscal year, earnings are projected at $10.14 per share with revenues of $3.82 billion, reflecting a 33.42% increase in EPS but a slight revenue decline of 0.46% [3] - The next fiscal year is expected to see earnings drop to $9.12 per share, while revenues are anticipated to rise to $3.95 billion, indicating a year-over-year change of -10.09% in EPS and 3.27% in revenues [3] Valuation Metrics - Bread Financial has a Value Score of A, with Growth and Momentum Scores of C, resulting in a combined VGM Score of A [6] - The stock trades at 6.7 times the current fiscal year EPS estimates, significantly lower than the peer industry average of 12.2 times [7] - On a trailing cash flow basis, the stock trades at 5.7 times compared to the peer group's average of 9.8 times, and it has a PEG ratio of 0.43, positioning it favorably for value investors [7] Zacks Rank - The stock currently holds a Zacks Rank of 2 (Buy), supported by positive earnings estimate revisions from analysts [8] - Bread Financial meets the criteria for selection based on Zacks Rank and Style Scores, indicating potential for further gains [9] Industry Context - The Financial - Miscellaneous Services industry is performing well, ranking in the top 33% of all industries, suggesting favorable conditions for both Bread Financial and its peers [12]

Core Insights - Bank of America warns of explosive growth in prediction markets and sports betting, which may lead to excessive consumer debt and loan defaults [1][2] - The rapid expansion of online betting since the Supreme Court overturned the federal ban on sports betting is creating new credit risks for lenders [1] - The financial pressure from betting losses is particularly significant among low-income consumers, especially young males [1][2] Group 1: Market Dynamics - The marketing of gambling products amplifies participation, resulting in rising credit balances and higher loan loss rates [2] - Companies like Bread Financial Holdings, Upstart Holdings, and OneMain Holdings are most vulnerable to the impact of low-income or credit-pressured consumers [2] - The online betting market presents new risks for lenders that have not been historically encountered, necessitating adjustments to underwriting models [2] Group 2: Consumer Behavior and Financial Impact - Recent studies indicate that in states where online gambling is allowed, average credit scores have dropped by nearly 1% and the likelihood of bankruptcy has increased by 28% after four years [1] - A survey cited by Bank of America reveals that 25% of gamblers have missed bill payments, and 45% lack sufficient funds to cover living expenses for three to six months [2] Group 3: Growth of Prediction Markets - Prediction markets have gained popularity by offering binary financial contracts linked to outcomes of elections and sports events, with nominal monthly trading volume exceeding $8.5 billion in October [3] - The growth is largely driven by contracts linked to sports events on platforms like Kalshi, which operates nationwide despite state-level regulatory opposition [3] - The design and gamified interface of these platforms blur the lines between investment and gambling, raising concerns about compulsive behavior and liquidity pressure among young and low-income consumers [3] Group 4: Industry Positioning - Prediction markets claim to offer a fairer model than sports betting companies by providing a neutral trading venue without directly betting against customers [4] - Kalshi's spokesperson emphasizes that their model is federally regulated and offers more transparent pricing, unlike traditional casinos [4] - Polymarket has recently cleared regulatory hurdles to re-enter the U.S. market after reaching a settlement with the Commodity Futures Trading Commission [4]

Core Viewpoint - Bread Financial Holdings, Inc. has announced the pricing of its underwritten public offering of depositary shares representing a 1/40th interest in its Non-Cumulative Perpetual Preferred Stock, Series A, with a liquidation preference of $25 per Depositary Share [1][2]. Group 1: Offering Details - The offering is expected to close on November 25, 2025, and is projected to generate approximately $72.64 million in net proceeds after deducting underwriting discounts and estimated offering expenses [2][3]. - The net proceeds will be used for general corporate purposes, which may include contributions or loans to its subsidiary bank, Comenity Capital Bank, and share repurchases [3]. Group 2: Listing and Regulatory Information - The Company plans to apply for listing the Depositary Shares on The New York Stock Exchange [2]. - The offering is being conducted under an effective registration statement filed with the Securities and Exchange Commission (SEC), and a final prospectus supplement will be available on the SEC's website [4]. Group 3: Company Overview - Bread Financial is a tech-forward financial services company that provides personalized payment, lending, and saving solutions to millions of U.S. consumers, including general purpose credit cards and savings products [6]. - The Company supports growth for recognized brands in various sectors through private label and co-brand credit cards and pay-over-time products [6].

Core Viewpoint - Bread Financial Holdings, Inc. has announced the launch of an underwritten public offering of depositary shares representing a 1/40th interest in its Non-Cumulative Perpetual Preferred Stock, Series A, with a liquidation preference of $25 per Depositary Share [1] Group 1: Offering Details - The offering will be listed on The New York Stock Exchange, and the net proceeds will be used for general corporate purposes, including potential contributions to Comenity Capital Bank and share repurchases [2] - The offering is being managed by Wells Fargo Securities, J.P. Morgan Securities, Morgan Stanley, and RBC Capital Markets as joint bookrunners [3] - The offering is made under an effective registration statement filed with the SEC, and a final prospectus supplement will be available on the SEC's website [4] Group 2: Company Overview - Bread Financial is a tech-forward financial services company providing personalized payment, lending, and saving solutions to millions of U.S. consumers, including general-purpose credit cards and savings products [6]

Core Insights - Zacks Premium provides tools for investors to enhance their stock market engagement and confidence through various resources like daily updates, research reports, and stock screens [1] Zacks Style Scores - Zacks Style Scores rate stocks based on value, growth, and momentum characteristics, serving as complementary indicators to the Zacks Rank [2] - Stocks are rated from A to F, with A indicating the highest potential for outperforming the market [3] Value Score - The Value Style Score focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, and Price/Sales [3] Growth Score - The Growth Style Score emphasizes a company's financial health and future growth potential, analyzing projected and historical earnings, sales, and cash flow [4] Momentum Score - The Momentum Style Score assesses stocks based on price trends and earnings outlook, utilizing factors like one-week price change and monthly earnings estimate changes [5] VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive indicator for investors seeking attractive value, growth, and momentum [6] Zacks Rank - The Zacks Rank is a proprietary model that leverages earnings estimate revisions to assist investors in portfolio creation [7] - Stocks rated 1 (Strong Buy) have historically achieved an average annual return of +23.93% since 1988, significantly outperforming the S&P 500 [8] Stock to Watch: Bread Financial Holdings (BFH) - Bread Financial, a tech-forward financial services company, is rated 2 (Buy) on the Zacks Rank with a VGM Score of A [11] - The company has a Momentum Style Score of A, with shares increasing by 0.1% over the past four weeks [12] - Analysts have revised earnings estimates upwards for fiscal 2025, with the Zacks Consensus Estimate rising by $1.78 to $10.12 per share, and an average earnings surprise of +55.2% [12]