Core Insights - The article emphasizes the importance of value investing, which focuses on identifying undervalued companies in the market [2] - It highlights the use of Zacks Rank and Style Scores system to find strong value stocks, particularly those with high Value grades and Zacks Ranks [3] Company Analysis: OneMain (OMF) - OneMain (OMF) currently holds a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential for value investors [4] - OMF's current P/E ratio is 8.03, significantly lower than the industry average P/E of 10.48, suggesting it may be undervalued [4] - The Forward P/E for OMF has fluctuated between 6.02 and 10.64 over the past year, with a median of 7.65 [4] - OMF has a PEG ratio of 0.40, which is lower than the industry average PEG of 0.52, indicating favorable valuation relative to expected earnings growth [5] - The P/S ratio for OMF is 1.33, compared to the industry's average P/S of 1.62, further supporting the notion of undervaluation [6] - Overall, the metrics suggest that OneMain is likely undervalued, making it an attractive option for value investors [7]

Group 1 - OneMain Holdings is highlighted as a potential investment opportunity due to its focus on small personal loans for higher-risk borrowers, which often struggle to obtain traditional credit [1] - The company operates 1,300 physical locations across 47 states and also offers loans through its iLoan platform, indicating a strong physical and digital presence [1] - OneMain Holdings has shown impressive financial performance, providing an 8% yield to investors, supported by solid fundamentals [4] Group 2 - OneMain Holdings has received an upgrade to its IBD Relative Strength Rating, reflecting improving price performance [2][4] - The company's Relative Strength Rating has jumped to 83, indicating strong relative price performance compared to its peers [4] - Despite the positive trends, OneMain Holdings is still shy of key benchmarks, suggesting there may be room for further growth [4]

Core Viewpoint - OneMain Holdings (OMF) is currently viewed as a more attractive investment option compared to Sallie Mae (SLM) for value investors based on various financial metrics and rankings [1][3][7] Valuation Metrics - OMF has a forward P/E ratio of 9.60, while SLM has a slightly higher forward P/E of 9.61 [5] - The PEG ratio for OMF is 0.47, indicating better expected EPS growth relative to its price compared to SLM's PEG ratio of 0.84 [5] - OMF's P/B ratio stands at 2.19, which is lower than SLM's P/B ratio of 2.93, suggesting OMF is more favorably valued in terms of market value versus book value [6] Earnings Outlook - OMF holds a Zacks Rank of 2 (Buy), indicating a positive earnings outlook with recent revisions to earnings estimates, while SLM has a Zacks Rank of 3 (Hold) [3][7] - The stronger estimate revision activity for OMF further supports its position as a superior choice for value investors [7] Value Grades - OMF has received a Value grade of A, while SLM has a Value grade of C, reflecting OMF's more attractive valuation metrics [6]

Core Viewpoint - The article emphasizes the importance of value investing and highlights OneMain (OMF) as a strong candidate for value investors due to its favorable financial metrics and Zacks Rank [2][4][7] Company Analysis - OneMain (OMF) currently holds a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential for value investors [4] - The stock has a P/E ratio of 8.12, significantly lower than the industry average of 10.49, suggesting it may be undervalued [4] - OMF's Forward P/E has fluctuated between 6.02 and 10.64 over the past 12 months, with a median of 7.62, further indicating its valuation potential [4] - The company has a PEG ratio of 0.40, which is lower than the industry average of 0.52, suggesting that OMF is undervalued relative to its expected earnings growth [5] - OMF's PEG has ranged from 0.31 to 0.71 in the past year, with a median of 0.43, reinforcing its attractiveness as a value stock [5] - The P/S ratio for OMF is 1.38, compared to the industry average of 1.64, indicating a favorable valuation based on sales [6] - Overall, the combination of these metrics suggests that OMF is likely undervalued and has a strong earnings outlook, making it an impressive value stock at present [7]

Economic Environment and Consumer Health - The company focuses on nonprime consumers and characterizes its borrower base as healthy, with an average income of approximately $70,000 per year [1] - The consumer demographic targeted includes individuals earning between $40,000 and $150,000, indicating a stable employment environment [1] - Employment rates are strong, with a reported unemployment rate of 4.2%, suggesting that most individuals seeking jobs are able to find employment [2] Lending Criteria and Variables - The company utilizes over 1,000 variables to assess borrowers, including income, expenses, geography, and employment type, ensuring a comprehensive evaluation of potential borrowers [1] - The current consumer base is described as being in good financial shape, which supports the company's lending strategy [1]

Economic Environment and Consumer Health - The company focuses on nonprime consumers and characterizes its borrower base as healthy, with an average income of approximately $70,000 per year [1] - The consumer demographic targeted includes individuals earning between $40,000 and $150,000, indicating a stable employment environment [1] - Employment rates are strong, with a reported unemployment rate of 4.2%, suggesting that most individuals seeking jobs are able to find employment [2] Lending Criteria and Variables - The company utilizes over 1,000 variables to assess borrowers, including income, expenses, geography, and employment type, ensuring a comprehensive evaluation of potential borrowers [1] - The current consumer base is described as being in good financial shape, which supports the company's lending strategy [1]

Summary of OneMain Holdings Inc. Conference Call Company Overview - **Company**: OneMain Holdings Inc. - **Industry**: Consumer Finance Economic Environment and Consumer Health - The health of the non-prime consumer is stable, with average customer income around $70,000 per year [3][4] - Employment rates are strong, with a 4.2% unemployment rate indicating good job availability [3] - Wages have caught up with inflation, contributing to consumer stability [4][6] - Internal surveys from 1,400 branches show steady customer sentiment, with no increase in unemployment claims [6][7] Credit Metrics and Guidance - The company has revised its net charge-off guidance to the lower half of the initial range, indicating positive credit trends [10][15] - Key credit metrics: - 30-plus delinquency rates down 29 basis points year-over-year [15] - Overall losses down 88 basis points year-over-year [15] - Consumer loan losses down 110 basis points year-over-year [15] - Confidence in maintaining a target underwriting loss range of 6% to 7% as the portfolio improves [18][19] Underwriting and Risk Management - Over 60% of originations are in the top two risk grades, indicating a focus on better credit quality [20] - A 30% stress buffer has been applied to underwriting to manage risk amid economic uncertainty [21][22] - The company is monitoring borrower performance closely, especially regarding student loans, with no significant impact observed from recent federal collection resumption [8][9] Branch Network and Competitive Advantage - OneMain has the seventh largest branch network in the U.S. with nearly 1,400 branches, which is seen as a competitive advantage [24][25] - Branch managers have an average tenure of 14 years, contributing to strong community ties and customer relationships [25][26] - The branch network is complemented by digital capabilities and new product offerings [24][25] Strategic Initiatives - OneMain has applied for an Industrial Loan Company (ILC) charter to enhance its banking capabilities without becoming a bank holding company [29][30] - The company is focusing on enhancing its debt consolidation product, which has seen increased originations due to improved marketing and technology [33][34] - Automation in income verification and collateral checks has streamlined processes, improving customer experience [36][37] Growth Opportunities - The card and auto loan segments are identified as growth areas, with significant market potential [40][46] - The company has a $750 million card portfolio in a $500 billion market and a $2.5 billion auto loan portfolio in a $600 billion market [46] - Growth will be measured and dependent on macroeconomic conditions, with a focus on maintaining credit quality [46] Competitive Landscape - The competitive environment is described as constructive, with a mix of established players and new entrants [48][49] - OneMain's strong balance sheet and credit history position it well against competitors [49] Capital Generation and Allocation - The company aims to reach $1,250 per share in capital generation, supported by strong credit performance and product innovation [50][51] - Capital allocation strategy includes reinvestment in the business, maintaining a healthy dividend, and opportunistic buybacks [52][53] Conclusion - OneMain Holdings Inc. is positioned well in the consumer finance industry, with a stable non-prime consumer base, improving credit metrics, and strategic growth initiatives that leverage its extensive branch network and digital capabilities [3][4][10][24][50]

Core Insights - The article emphasizes the importance of utilizing Zacks Premium for investors to enhance their stock market strategies and confidence in investing [1][2] Zacks Style Scores - Zacks Style Scores are indicators that assist investors in selecting stocks likely to outperform the market within 30 days, rated from A to F based on value, growth, and momentum characteristics [3] - The Style Scores are categorized into four types: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [4][5][6][7] Value Score - The Value Score identifies attractive and discounted stocks using various financial ratios, appealing to value investors [4] Growth Score - The Growth Score assesses a company's financial health and future outlook, focusing on projected and historical earnings, sales, and cash flow for long-term growth [5] Momentum Score - The Momentum Score helps investors capitalize on price trends, utilizing factors like recent price changes and earnings estimate shifts [6] VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive indicator for investors who utilize multiple investment strategies [7] Zacks Rank - The Zacks Rank is a proprietary model based on earnings estimate revisions, with 1 (Strong Buy) stocks historically yielding an average annual return of +23.75% since 1988, outperforming the S&P 500 [8] - There are typically over 800 top-rated stocks available, making it essential for investors to use Style Scores to narrow down their choices [9] Stock to Watch: OneMain Holdings - OneMain Holdings Inc. is a financial services company with a Zacks Rank of 3 (Hold) and a VGM Score of B, indicating moderate potential [12] - The company has a Value Style Score of A, supported by a forward P/E ratio of 9.76, making it attractive to value investors [13] - Recent upward revisions in earnings estimates by eight analysts for fiscal 2025 have increased the Zacks Consensus Estimate by $0.16 to $6.34 per share, with an average earnings surprise of +9.3% [13]

Core Insights - OneMain Financial is expanding its financial education program, Credit Worthy, to reach an additional 500 high schools annually, aiming for a total of 2,000 schools each year through 2029 [1][3] - The program has already benefited over 500,000 students across more than 4,700 high schools, focusing on essential skills like understanding credit scores and managing debt [1][4] - Research indicates that only 30% of high school students understand credit scores, highlighting the need for effective financial education [2] Program Effectiveness - The Credit Worthy curriculum, developed in partnership with EVERFI, teaches practical financial skills, including banking and budgeting [2] - Students participating in the Build: Credit Fundamentals course experienced significant improvements in their understanding of credit, with a 43% increase in acquiring credit knowledge and a 126% increase in managing credit [4] Educational Impact - The program is active in 17% of public high schools across all 50 states, Washington, D.C., and Puerto Rico, addressing the growing requirement for personal finance education in schools [3] - OneMain Financial has committed nearly $300,000 in scholarships for students completing the curriculum, with an additional $300,000 planned through 2029, totaling $600,000 [5]

Company Overview - OneMain Holdings Inc. is a financial services company engaged in consumer finance and insurance businesses, headquartered in Evansville, IN [11] - The company was formerly known as Springleaf Holdings, Inc. and changed its name after acquiring OneMain Financial from Citigroup in 2015 [11] Zacks Rank and Style Scores - OneMain Holdings has a Zacks Rank of 3 (Hold) and a VGM Score of A, indicating a solid position in the market [11] - The company also has a Value Style Score of A, supported by attractive valuation metrics such as a forward P/E ratio of 9.23, which is appealing to value investors [12] Earnings Estimates and Performance - In the last 60 days, eight analysts have revised their earnings estimates upwards for fiscal 2025, with the Zacks Consensus Estimate increasing by $0.16 to $6.34 per share [12] - OneMain Holdings has demonstrated an average earnings surprise of +9.3%, indicating a positive trend in earnings performance [12] Investment Consideration - With a solid Zacks Rank and top-tier Value and VGM Style Scores, OneMain Holdings is recommended to be on investors' short lists for potential investment opportunities [12]