Market Review
In his Fed semiannual testimony before the Senate Committee on Banking, Housing, and Urban Affairs, Federal Reserve chair Jerome Powell said, “Labor market conditions have cooled from their formerly overheated state and remain solid. Inflation has moved much closer to our 2% longer-run goal, though it remains somewhat elevated.”
Yes, it has. This morning, it was reported that stubborn inflation, as denoted in the CPI index, rose to 3.0%, a bit higher than the 2.9% economists had predicted.
Source: BLS
Further, propping up the strong economy, the unemployment rate fell from 4.1% to 4% last month, and ADP jobs added were 183,000, compared to the 150,000 expected.
Housing prices continued to rise—up 6.2% from last year—and homes sold also increased, up 11.8% year over year.
The markets started strong in 2025 but have recently been fairly volatile as investors are struggling to understand how the new president’s announcements and changes to government and foreign policies will ultimately affect the markets.
Growth stocks are still leading the charge, concentrated in the mid-cap arena, up 9.6% so far this year. But Value stocks are doing ok, as you can see from the following table:
U.S. Equities – Russell Indexes | |||
| Index | YTD | 1 Year | 3 Years |
| Mid-Cap Growth | 9.60% | 27.03% | 35.90% |
| Large-Cap Value | 4.62% | 15.99% | 16.93% |
| Small-Cap Growth | 3.39% | 15.78% | 15.30% |
| Mid-Cap Value | 2.74% | 14.43% | 12.12% |
| Large-Cap Growth | 2.66% | 25.12% | 48.93% |
| Small-Cap Value | 2.10% | 11.50% | 6.41% |
Source: Seeking Alpha
Sector-wise, all sectors are in the black, led by Communication Services (+6.60%), Financial Services, up 6.37%, and Healthcare, rising 6.35%. The laggards—although still positive—are Consumer Discretionary, up 0.89%; Consumer Staples, +1.56%, and Technology, +1.59%.
According to FactSet, 62% of the companies in the S&P 500 have reported fourth-quarter earnings, and 77% have posted EPS above analysts’ estimates. All in all, the strong economy should continue to boost earnings, which—all else being equal—should keep the market momentum going.
Feature Recommendation
With the average dividend yield of the S&P 500 Index at just 1.24%—lower than the historical average of 1.47%-2.03%—I decided to check in with our dividend expert, Tom Hutchinson, Chief Analyst of Cabot Dividend Investor, Cabot Income Advisor and Cabot Retirement Club, for his take on the outlook for dividend stocks.
Tom is excited about dividends this year and offered the following recommendation as one of his favorite stocks.
Ally Financial Inc. (ALLY): The Rising Alternative to Brick & Mortar Banks
“Ally Financial is the leading all-digital banking company in the U.S. with 3.3 million customers and over $100 billion in loans. The bank’s primary revenue source is automotive loans (over 70%), but it is also diversified in auto insurance, commercial lending, mortgage financing, and credit cards.
“The company was the financial segment of General Motors (GM), where it developed a 100-year-old, fully developed auto loan business. It was spun off in 2009 during the financial crisis as part of GM’s bankruptcy reorganization. The company has since focused on the online business.
“Ally is still a relatively small bank among the big players in the country. But it is becoming very well-established in the high-growth, online banking part of the business. It focuses on this area more than established banks and may grow into a much bigger player in the years ahead.
“Ally can attract a large deposit base online because it can offer higher rates than traditional banks. It can do this because it is unburdened by the costs associated with physical branches and staffing. The bank has been able to add retail deposit customers for 62 consecutive quarters, including 57,000 in the third quarter.
“Ally uses these deposits to make auto and other loans. The bank earns money on the spread between what it pays on deposits and what it charges for auto loans. At the end of the last reported quarter, it had $83.6 billion in retail auto loans and $23.9 billion in commercial auto loans.
“Ally has grown the business through online banking. That business is accelerating, and revenues have about doubled since 2017 from $5.8 billion to trailing 12-month revenue of $11.5 billion. Online banking now accounts for 88% of loans compared to 54% in 2016.
“Ally has had major success improving its funding structure as the peculiarities of the burgeoning online business become more well-known. The profitability of its deposit base has improved with the more expensive CDs making up a much smaller portion. Continuing improvements in this funding structure mean wider net interest income (NII) margins and better than historical returns going forward.
“The bank is also diversifying into other profitable areas like credit cards. These other areas grew revenue 40% in the last quarter from a year ago. It provides some relief when the auto market gets tough and can raise overall margins.
“Ally is highly leveraged to the auto market where things have been challenging. Consumers are strapped from inflation and loan rates are still high. The dynamic has led to flattening sales and an increasing number of defaults. ALLY plunged over 20% in early September after the company disclosed that loan defaults were worse than expected.
“The percentage of defaults increased to 2.24%, well up from last year. In the third quarter, net charge-offs increased 13.4% over last year’s quarter to $517 million, and the amount set aside for loan loss provisions going forward increased 27% to $645 million. Also, net financing revenues decreased 2.9% from the same quarter last year.
“But I believe the market overreacted and the selling is overdone. First, Ally has taken strong risk management steps for loans, which they have proven to be good at. Second, the current issues are just temporarily reducing growth but not killing profitability. Ally still grew revenue 6.9% and earnings were up 14.5% in the third quarter versus the year-ago quarter. Third, things are likely to improve next year.
“And last quarter’s earnings alleviated most of that concern. It’s a good time for financial stocks and this one has some catching up to do.
“Inflation is under control. Interest rates are coming down. And the economic prognosis is improving. Although the fourth quarter will likely feature lower earnings growth than previously expected, next year looks good. In fact, analysts are expecting Ally to deliver 40% earnings growth for 2025.
“Net interest margins (NIMs) are projected to be 3.2% in 2024, down from 3.32% last year. However, the company expects a medium-term average of 4% NIM margin going forward.
“And there’s something else. Financial stocks have been booming over the last year. the Financial Select Sector SPDR Fund (XLF), a sector bellwether, was up 30.3% over the last year. Financial stocks also got a huge further boost after the election as investors anticipate less regulation and higher growth.
“The market is high. Many financial stocks are even higher. Chasing stocks into the stratosphere typically doesn’t deliver great returns. Finding a stock that has been temporarily held back and is still cheap is a much better strategy. Finding winners in a high-priced market entails seeking out opportunities like ALLY.
“Then there’s the dividend. ALLY pays an annual dividend of $1.20, which translates to a highly respectable 3.2% yield at the current price. The payout is well-supported with just a 29% payout ratio, compared to an average of 37% for the financial sector. Ally has also grown the payout by an average of 12% over the last five years. Companies that grow the dividend tend to be great performers over time.
“Ally Financial has had a strong move off the recent bottom this month, up over 16% since January 10. It had been floundering badly along with most other financial stocks as the soaring interest rate narrative took hold. But it rallied in the last month as big bank earnings were stellar and December inflation was OK.
“Now, there are renewed expectations for the Fed to cut rates this year. Plus, the regulatory environment is certain to become much more friendly in the new administration. Analysts are also expecting earnings growth of 40% in 2025.
“A big reason to buy ALLY now is because it’s cheap, much cheaper than its peers. Despite the recent rally and the market at highs, ALLY sells at just 8.2 times forward earnings and 1.0 times book value, both valuations are well below those of the market averages. But there’s a reason it’s cheap. BUY”
For its fourth quarter, Ally posted revenues of $2.1 billion, up 5% year over year and $80 million better than analysts had forecast. EPS beat estimates by $0.21, coming in at $0.78. For all of 2024, the company’s revenues were $8.2 billion, and EPS was $2.35.
As Tom mentioned, ALLY is diversifying its product line, as you can see from the following chart:
The company’s goal, as stated in its recent investor presentation is to “invest in core businesses where we have competitive advantages, attractive returns, and relevant scale.” And ALLY has done just that, expanding into additional financial products, such as credit cards.
I always like to see insiders adding to their holdings. And recently, CEO Michael George Rhodes upped his stake of ALLY, buying 25,634 shares during the last week in January.
A Citi analyst who covers the company reiterated his “Buy” rating with a price target of $55. I agree. Buy
Ally Financial Inc. (ALLY) 52-Week Low/High: $31.95 - 45.46 Shares Outstanding: 305.39 million Institutionally Owned: 83.43% Market Capitalization: $11.605 billion Dividend Yield: 3.24% | Why Ally Financial: Leading the way in the rapidly accelerating online auto lending industry 62 quarters of customer growth Making inroads into diversifying its financial products Undervalued |
About the Analyst: Tom Hutchinson, Chief Analyst, Cabot Dividend Investor, Cabot Income Advisor and Cabot Retirement Club
Tom Hutchinson is a Wall Street veteran with extensive experience in multiple investing and finance disciplines. Tom’s expertise includes specialized areas of mortgage banking, commodity trading, and in a financial advisory capacity for several of the nation’s largest investment banks.
For more than a decade, Tom created and actively managed investment portfolios for private investors, corporate clients, pension plans and 401(k)s. He has a long track record of successfully building wealth and providing a high income while maintaining and growing principal. As a financial writer, Tom’s byline has appeared in The Motley Fool, StreetAuthority, Newsmax and more.
He has written newsletters and articles for several of the nation’s largest online publications, conducted seminars and appeared on several national financial TV programs. For the past 13 years, Tom has authored a highly successful dividend and income portfolio with a stellar track record of success.
For this month’s issue, I asked Tom for a stock recommendation from his Cabot Dividend Investor portfolio, and he was kind enough to also offer his current views on interest rates, attractive sectors, and dividend stocks.
Here’s our interview:
Nancy: Overall, estimates for dividend growth for North American companies for 2025 are around 4%. Are you seeing signs that the stocks in your portfolio will follow suit?
Tom: Yes. Companies are increasingly returning money to shareholders. But most of my portfolio holdings are for “dividend growth.” They have a long track record of growing the dividend, and most have not disappointed in recent years.
Nancy: In a recent update in your Cabot Dividend Investor newsletter, you mentioned that defensive stocks and interest rate-sensitive stocks have recently seen an uptick. Of these investment styles, which particular sectors are you fond of at the moment?
Tom: There has been an uptick in most sectors that aren’t technology. The “Magnificent 7” stocks have alone accounted for 55% of S&P 500 returns since the beginning of 2022 through January. But the rally is broadening as the rest of the market is expected to have the strongest earnings growth in years.
Right now, I like Financials, which benefit from expected strong economic growth and reduced regulations. I also like Healthcare. The sector has been overlooked but offers both defense and growth. That’s why it’s the top-performing S&P 500 sector YTD.
Nancy: I note that you have a good percentage of your portfolio invested in financial and healthcare stocks, and both are leading sectors so far this year. Are you planning on adding any additional companies from these areas?
Tom: I’ll have to see. I’m already pretty loaded with healthcare stocks. And the best financial stocks are expensive right now. I’m looking for a pullback to add to financials and perhaps swap something out in healthcare.
Nancy: You also own some energy, which is currently not one of the leading sectors—any predictions for that sector in 2025?
Tom: I’m not bullish on the overall sector because the increase in oil and gas production is likely to push prices lower, and most energy plays are price sensitive. However, there are niches where the performance should be strong going forward. Midstream energy companies benefit from more oil and gas activity and are not price sensitive. Natural gas companies are also benefitting from the electricity growth from AI data centers. Natural gas exporters should also do well.
Nancy: It looks like Industrial and Mortgage REITs are making a comeback. What is your current position on REITs?
Tom: I’m generally bullish on REITs as interest rates are most likely to trend lower in the year ahead, after an agonizing period of inflation and rising interest rates that made them cheap. But they will bounce around with the ebb and flow of the current interest rates narrative in the near term.
Nancy: Are there any sectors or sub-sectors that you currently see as oversold?
Tom: I believe just about all subsectors are still oversold, with the exception of certain specialty REITs.
Nancy: What are the 3-5 most critical challenges to the growth of the stocks in your portfolio right now?
Tom: Interest rates. Rising rates almost derailed the rally in January as the benchmark 10-year Treasury rose to 4.8%, the highest level since 2023 and dangerously close to the old peak of 5%. The stock rally has always assumed, and priced in, that rates have at least peaked for this cycle. If growth and inflation drive that rate above the old high, it could cause a correction or beyond.
Valuation: Several stocks in the portfolio have had a great run. Hot stocks almost always have a pullback or at least a consolidation. We saw this vulnerability in tech stocks on January 27 as certain AI beneficiaries had the worst one-day drop in years.
Economic growth: Stocks have traded with the assumption that there will be a higher level of economic growth going forward after the Trump election. If that growth doesn’t materialize, there could be a repricing. It could also take longer to come about than the market expects.
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Portfolio Updates
Tom also updated his view on Qualcomm Inc. (QCOM), noting, “QCOM didn’t take a hit last week because it wasn’t riding high like other AI-related stocks. Although QCOM has been strong this year, it’s still stuck in the mud in the recent range. It’s way below the June high and still the same price it was last spring. It’s worth being patient because when this stock moves it easily makes up for lost time. And it will take off at some point. The market wants to see strong U.S. smartphone sales from an AI upgrade cycle. Although that hasn’t happened, it could become a catalyst sometime this year. Qualcomm reports earnings this Wednesday (February 5) and we could get a better idea of the near-term direction of the stock. BUY”
For its first fiscal quarter, ending December 29, QCOM reported earnings per share of $3.41, beating analysts’ estimates of $2.97. The company’s revenue also surpassed Wall Street’s forecasts, coming in at $11.67 billion, higher than the $10.9 billion analysts expected.
Guidance was improved, and the company now predicts EPS between $2.70 and $2.90, higher than the consensus estimate of $2.71. Revenue is expected to be between $10.2 billion and $11 billion.
After the earnings report, TD Cowen boosted its price target to $195 from $180. Buy
Brookfield Infrastructure Partners (BIP) was also reviewed by Tom, who noted, “The infrastructure partnership reported earnings last week that beat expectations with 8% FFO (funds from operations) growth for 2024 over the prior year and 10% minus exchange rates. Brookfield also announced a 6% distribution increase, marking the 16th consecutive year of payout increases. BIP jumped 4.5% on the day following the report.
“It’s more good news that also reflected confidence in future earnings. The business is delivering but the stock price isn’t. BIP returned a lame 6.3% over the last year while the market was up about 20%. It continues to be at the mercy of the interest rate narrative and likely won’t break out until interest rates fall again. But it does deliver a solid income in the meantime and provides an element of defense to the portfolio. BUY”
Historically, dividend-growing companies have outperformed businesses that kept their dividends at a steady rate. With 16 dividend increases in a row and growing earnings, Brookfield looks pretty attractive to me. Buy
And Tom had this to say about UnitedHealth Group Inc. (UNH): “UNH took another hit last month when the market wasn’t thrilled with the earnings report and the FTC accused the company, along with others, of overcharging for life-saving drugs.
“Earnings were mixed as revenue missed and earnings beat. However, the company also reiterated 2025 guidance, and the stock has been moving higher again. It’s one thing after another with this one. I will maintain the Buy rating for now because the price has been trending higher for six weeks now. Hopefully, this upside traction can last. BUY”
More than 100 hedge funds have positions in UNH. For the quarter, UNH reported revenues of $100.8 billion and EPS of $6.81. And earnings estimates for 2025 are trending higher for the company. Continue to Buy.
Tom also updated his take on McKesson Corporation (MCK), commenting, “McKesson recovered all the summer and fall dip in a very short time, resumed a funk in December, but is moving higher again this month. The pharmaceutical distributor took a plunge after second-quarter earnings missed because of supply disruptions. But the third-quarter earnings alleviated that concern, and the stock took off again.
“The next chapter in the saga will be added this week when the pharmaceutical supply chain company reports fourth-quarter earnings. Earnings reports have been moving the stock for the past few quarters and a good one could get the stock moving meaningfully higher again. BUY”
And the results are in. For its third quarter, McKesson reported revenues of $95.3 billion, up 18% from 3Q 2024. EPS was $6.98, a rise from $4.45 last year.
MCK has increased its EPS guidance to $32.55-$32.95 for this year, a 19-20% rise, based on “expansion in oncology and specialty pharmaceuticals.” Continue to Buy.
Curaleaf Holdings, Inc. (CURLF) was recommended by Michael Brush, Chief Analyst of Cabot Cannabis Investor. The company is expected to announce its quarterly and full-year earnings on March 3. Analysts estimate a loss of $-0.08 on revenues of $332.2 million. For 2025, Wall Street is predicting that the price of CURLF will rise approximately 156%. At this point, I’m disappointed in the lack of progress for the company, but I’ll give it a bit more time. I recommend that we continue to Hold this recommendation for a while.
Michael updated Green Thumb Industries (GTBIF), reporting that the company “Has launched a partnership with a Chicago music venue called the Salt Shed. Green Thumb’s RISE dispensary will sell cannabis products in a storefront in the music venue called RISE at Salt Shed. It will offer hemp-derived THC Delta 9 products sold under Green Thumb brands like incredibles and Beboe, as well as branded merchandise and accessories. Buy”
Green Thumb will announce its fourth quarter and full-year earnings on February 26. Analysts expect EPS of $0.07 on $288.03 million in revenues.
The U.S. has the highest weed consumption in the world, and jobs in the cannabis industry are on the rise. So far, 24 states have legalized recreational weed in America. For this reason, I’m willing to continue to Buy this recommendation.
Tyler Laundon, Chief Analyst of Cabot Early Opportunities and Cabot Small-Cap Confidential, updated his views on FTAI Aviation (FTAI), saying, “FTAI recently announced a Strategic Capital initiative with third-party institutional investors that should provide the Aerospace Products business with significant volumes of engine and module exchanges. The first partnership will focus on acquiring 737NG and A320ceo aircraft, with all engines owned by the partnership to be powered exclusively through FTAI’s Maintenance, Repair and Exchange (MRE) business. This initiative should bring in meaningful volumes of engine and module exchange (FTAI management estimates 80 engine shop visits) as well as provide a feedstock of engines that can be repaired and used for other customers. The partnership structure could serve as a model for future engine programs, provided FTAI executes on its end of the bargain.
“It looks to me like analysts are factoring in a relatively modest 2% (roughly) increase to 2025 sales (estimated at $1.49 billion) and around a $0.10 bump to 2025 EPS ($4.53 now expected). HOLD HALF”
FTAI will report earnings on February 27. Wall Street expects EPS of $0.86 on revenues of $517.02 million. Analysts at Benchmark reiterated their “Buy” rating and set a $300 price target, an upside of more than 150%. Let’s continue to Hold our remaining shares.
Tyler issued a “Sell” on our most recent recommendation, Willdan Group (WLDN), noting, “We’re going to show respect for the deteriorating breadth of the market by selling Willdan Group. Shares faltered after the company’s Q3 report, and the stock hasn’t regained its mojo. I don’t think the company’s prospects are any worse under the Trump administration, but that perception might be out there, so what I think doesn’t really matter. The bottom line is the stock is not working right now, and I’d rather lighten up a little by selling a stock at breakeven to have more firepower heading into the beginning of 2025. SELL”
I concur. Sell
Chris Preston, Chief Analyst of Cabot Value Investor, reviewed his position in Toll Brothers (TOL), noting, “As Treasury yields have dipped to near the magical 4.5% threshold, Toll Brothers shares have rebounded, up another 3% this week and nearly 10% in January alone. There’s been no major company-specific news, so right now the falling rates are the primary catalyst. We’ll see if Jerome Powell’s recent press conference helps or hinders the improving interest-rate environment going forward.
“Mortgage rates remain stubbornly high at just under 7% for a 30-year loan. Until those drop in a meaningful way, TOL’s upside may be limited. Even a dip to the low 6% range for the first time since October would likely have a positive impact on homebuilders.
“The stock has 22% upside to our 180 price target. BUY”
Some 54 hedge funds are invested in TOL, an increase of 8 since the previous quarter. TOL will report quarterly earnings on February 19. Analysts expect EPS of $2.05 on $1.91 billion in revenues. Continue to Buy.
International Business Machines (IBM) was updated by Carl Delfeld, who reported, “IBM shares, representing our conservative AI play, have tacked on 40 points over the last two weeks, hitting an all-time high early this week. The company offers all the tools clients need to train and manage AI models that can be run on multiple public clouds. Buy a Half”
Oppenheimer recently initiated coverage of IBM shares, with an “Outperform” rating and a $320 price target, due to “the company’s transformation into a software-driven business with strong growth potential.”
For its fourth quarter, IBM reported earnings of $3.92 per share, beating analysts’ estimates of $3.75. Revenue was $17.55 billion, also nudging past Wall Street’s forecasts of $17.54 billion. Continue to Hold our remaining shares for now.
Carl also updated Oberweis Micro-Cap Fund (OBMCX), saying, “The fund stands out for several reasons. The fund’s sound investment process and strong management team earn it a rare Morningstar Medalist Rating of Gold. Over the past five years, it has posted an impressive average annual return of 21.1%. Buy a Half”
I agree. Buy
Shares of Novo Nordisk (NVO) continue to bounce around. The Stock is still on Wall Street’s buy list, and analysts have a mean price target of $110 on the stock. I consider the shares deeply discounted. Continue to Buy.
Portfolio
| Company | Symbol | Date Bought | Price Bought | Price on 2/12/25 | Gain/ Loss % | Rating | Risk Tolerance |
| M | |||||||
| M | |||||||
| A | |||||||
| FTAI | A | ||||||
| GTBIF | A | ||||||
| M | |||||||
| MCK | 6/13/24 | C | |||||
| NVO | 2/8/24 | A | |||||
| OBMCX | 11/15/24 | A | |||||
| QCOM | 7/15/22 | M | |||||
| TOL | |||||||
| WLDN |
*Aggressive (A), Moderate (M), Conservative (C)
ETF Strategies
Our ETF portfolio is still going strong, and I want to take some more profits this month. We are up more than 34% in First Trust North American Energy Infrastructure Fund (EMLP), so let’s Sell one-half of our holdings.
These ETFs remain on our Watch List but have risen past my buy points, so let’s keep watching:
Vanguard Small Cap Growth Index Fund (VBK)
Midcap Growth ETF Vanguard (VOT)
And I’m adding one more to our Watch List: The Industrial Select Sector SPDR Fund (XLI)
ETF Spotlight
In this section of the newsletter, I highlight one of our portfolio ETFs, showcasing its largest holdings and past returns so that you can decide if the ETF fits into your investment strategy. Here is this month’s featured ETF:
ALPS O’Shares U.S. Small-Cap Quality Dividend ETF Shares (OUSM) is a 5-star fund that seeks to track the performance (before fees and expenses) of the O’Shares U.S. Small-Cap Quality Dividend Index. Under normal market conditions, the fund will invest at least 80% of its total assets in the components of the index. The index is designed to reflect the performance of publicly listed small-capitalization dividend-paying issuers in the United States that meet certain market capitalization, liquidity, high quality, low volatility, and dividend yield thresholds, as determined by O’Shares Investment Advisers, LLC (the “index provider”).
Top 10 Holdings
| Holdings | % Portfolio Weight | Sector |
| Genpact Ltd | 2.49 | Technology |
| SEI Investments Co | 2.48 | Financial Services |
| Dolby Laboratories Inc Class A | 2.38 | Industrials |
| Houlihan Lokey Inc Class A | 2.33 | Financial Services |
| Lincoln Electric Holdings Inc | 2.14 | Industrials |
| Encompass Health Corp | 2.09 | Healthcare |
| TD Synnex Corp | 2.06 | Technology |
| MSC Industrial Direct Co Inc Class A | 2.01 | Industrials |
| Texas Roadhouse Inc | 2 | Consumer Cyclical |
| Amdocs Ltd | 1.98 | Technology |
Returns
| Total Return % | 1-Year | 3-Year | 5-Year |
| Total Return % (Price) | 12.24 | 10.11 | 10.04 |
| Total Return % (NAV) | 12.28 | 10.12 | 10.05 |
Steaming Ahead: The Automotive Finance Market
The growth of electric vehicles is boosting the global automotive finance market. Currently valued at $295.13 billion, the worldwide market is expected to grow at a CAGR of 7.4% from 2025 to 2030, with the share of electric vehicles now accounting for more than 25% of the marketplace.
Cryptocurrency is also pushing expansion, as auto tech providers have begun to adopt cryptocurrency-based payments.
Artificial intelligence (AI) is being used to enhance credit underwriting, develop AI-lending programs, and lower interest rates are driving refinancing, which is up 16%, according to RateGenius, a fintech company.
Passenger vehicles were the market leaders last year, due to “the increasing need of mobility due to increased distances between work, home, education, leisure, and shopping facilities,” as well as rising demand for safety, infotainment systems, and advanced driver-assistance programs such as telematics, autonomous vehicles, and in-dash controls.
With digital providers like ALLY, customers can now “apply for loans, compare offers, and complete transactions online.” If you’ve ever bought a vehicle, you know that the whole traditional process—including financing—is one big annoyance.
In North America, demand has driven the growth in diverse lending and leasing programs, providing more options for consumers. Proposed tariffs may temporarily roil the markets in the U.S., Canada, and Europe, but I believe that all parties will make some agreement, which will lead to additional growth.
The auto finance market in Europe has been strong, now claiming a 39.3% share of the global revenue in 2024.
Fortunately, ALLY seems to be in the right place at the right time and is the leading company in the automotive finance market. According to Grandview Research, here are the companies with the largest market share in the industry:
- Ally Financial
- Bank of America
- Capital One
- Chase Auto Finance
- Daimler Financial Services
- Ford Motor Credit Company
- GM Financial Inc.
- Hitachi Capital
- Toyota Financial Services
- Volkswagen Financial Services
The stars seem to be aligned for this company, and its shares look undervalued to me. Buy
ETF Portfolio
| Gain/ Loss % |
| IHI |
*Aggressive (A), Moderate (M), Conservative (C)
**Purchase price reflects a 3-for-1 stock split
The next Cabot Money Club Stock of the Month issue will be
published on March 13, 2025.
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