Core Thesis - Credit Acceptance Corporation (CACC) presents a compelling investment opportunity due to its historical performance, potential earnings rebound, and favorable market conditions [1][4]. Company Overview - CACC is a seasoned subprime auto lender with over 50 years of operations, having compounded shareholder value significantly, with a stock return of 170x since 1992, translating to a 25% CAGR [2]. - Despite its strong franchise and disciplined capital allocation, the stock trades at approximately 8x normalized EPS, similar to levels six years ago, even as the loan book expanded by around 50% and share count halved [2]. Financial Performance - Recent underperformance is attributed to weak loan cohorts from 2021 to 2023, which negatively impacted revenue yields and profitability [3]. - As these older cohorts season and newer vintages with stricter underwriting come into play, earnings are expected to rebound sharply from 2026 onward [3]. - Management's conservative adjustments and improving revenue and finance charge yields indicate that an earnings inflection is underway [3]. Market Conditions - The withdrawal of the CFPB lawsuit has removed a regulatory overhang, enhancing the investment appeal of CACC [4]. - The potential for significant buybacks could further enhance per-share value, with the stock trading at 11x 2025E EPS and expected to exceed $60 EPS by 2026 and $100 by 2029 [4]. - The stock offers an expected IRR of over 30%, making current levels an attractive long-term entry point [4]. Comparative Analysis - Similar to Upstart Holdings, CACC emphasizes disciplined underwriting and the potential for earnings rebound, despite facing macroeconomic headwinds [5].

Core Insights - Albertsons Companies, Inc. (ACI) reported better-than-expected second-quarter earnings and sales, driven by strong digital growth and rising identical-store sales [1][2] - The company announced a $750 million accelerated share repurchase and raised its full-year profit outlook [1] Financial Performance - ACI's adjusted earnings per share for the second quarter were 44 cents, surpassing the analyst consensus estimate of 40 cents [2] - For 2025, the EPS estimate has been raised to $2.15 from $2.11, with an adjusted EBITDA margin of 4.7%, down 32 basis points year over year [5] - Identical-store sales are projected to remain at +2.5%, leading to an adjusted EBITDA of $3.89 billion for 2025 [5] - For 2026, the EPS estimate is lifted to $2.29 from $2.24, with adjusted EBITDA expected to reach $3.97 billion [5] Analyst Ratings and Outlook - Telsey Advisory Group analyst Joseph Feldman reiterated an Outperform rating on ACI, with a price forecast of $24 [3] - Feldman noted that the company's turnaround is gaining traction, setting the stage for healthy growth and profitability in 2026 and beyond, with 2025 seen as an investment year [3] - The stock is currently trading at about 4.7x 2026E EV/EBITDA, which is one to two turns below its historical range, indicating potential valuation upside [4] Strategic Initiatives - Key initiatives include boosting digital engagement, scaling the media collective, enhancing value/loyalty programs, modernizing technology, and driving lasting productivity [4] - Management is focused on pruning underperforming stores and non-core assets to improve overall performance [3]

Core Viewpoint - The South Korean technology giant anticipates a strong rebound in earnings driven by recovery in its semiconductor segment, surpassing market expectations [1] Group 1: Earnings Performance - The company expects earnings to have rebounded strongly [1] - The recovery in the semiconductor segment is a key factor in this earnings rebound [1] - Market expectations have been exceeded by the company's performance [1]