Santander Consumer USA Holdings Inc. Financial | Mortgage Investment | USA Santander Consumer USA Holdings Inc., a specialized consumer finance company, provides vehicle finance and third-party servicing in the United States. Its vehicle finance products and services include retail installment contracts and vehicle leases, as well as dealer loans for inventory, construction, real estate, working capital, and revolving lines of credit. The company also offers financial products and services related to motorcycles, recreational vehicles, and marine vehicles; originates vehicle loans through a Web-based direct lending program; purchases vehicle retail installment contracts from other lenders; and services automobile, and recreational and marine vehicle portfolios for other lenders. In addition, it provides personal loans, private-label revolving lines, and other consumer finance products, as well as point-of-sale financing. The company was founded in 1995 and is headquartered in Dallas, Texas. Santander Consumer USA Holdings Inc. is a subsidiary of Santander Holdings USA, Inc.
4 potential catalysts, according to analyst at Piper Jaffray (source: https://finance.yahoo.com/news/4-potential-catalysts-santander-consumer-180001420.html) Piper Jaffray upgraded shares of Santander Consumer USA Holdings Inc from Neutral to Overweight and increased its price target from $14 to $17. The firm thinks the stock represents a very compelling risk-reward, as it trades at a discount to the tangible book value. Analyst Kevin Barker sees four important catalysts for the company's stock over the next year. Takeout Looking More of A Reality Baker believes Santander Consumer's parent Santander Holdings USA will get approval to buyout former CEO's stake, which the analyst believes could happen anytime soon. The analyst believes a potential buyout is compelling and should put a floor on the stock, as Santander Consumer is the best performing entity within the Santander Holdings USA umbrella of companies. Additionally, the analyst noted that the parent CEO is now running Santander Consumer and that the latter could dividend excess capital to the parent. The analyst also sees the possibility of the parent company buying out shareholders once the former CEO's stake is bought. Improving Credit Story Piper Jaffray sees an improvement in credit conditions, with net charge offs, or NCO, growth slowing. The firm sees first indications of this occurring in late 2017 or early 2018, given that Santander Consumer tightened underwriting in 2015 and consequently, the portfolio becoming less of a headwind. "If used vehicle pricing does not fall off a cliff, we should see NCO growth rates slow in the next couple of quarters and NCOs stabilize in 2018," the firm said. Additionally, Piper Jaffray noted that non-prime auto lending has declined as a percentage of overall lending in the last few quarters. The firm feels the market will give Santander Consumer a better P/E multiple on the stock if visibility into the slowdown in the NCO growth rate improves. ROE Improvement The firm believes the company's sale of Bluestem will serve to remove a drag on ROE, or Return on Equity, in the next two to four quarters. Stock Buyback Piper Jaffray also noted that Santander Consumer has got approval to buy back stock in June 2018 during the next Fed's Bank stress test. Concluding, the firm said the stock could trade to $20+ levels if credit trends revert to 2016 levels.
Weekly chart so we can see the nice base it's made since SC started trading in 2014 Looking like it's starting Phase 2 of its stock cycle, and also looks like it's getting ready to exit accumulation range. Let's see if it backs up one more time near the 20 week ma, e.g. if the market in general pulls back -- but in daily chart 8/24 looks like the sign of strength, so maybe only a pullback to the 20 day ma.
