Sleepwell and Enlightened are allied in the $ALLY bull case
Sleepwell Capital and Enlightened Capital discuss their thesis for Ally $ALLY. Ally trades for just over book value despite posting ROEs well in excess of their cost of capital; Sleep and Enlightened both believe their valuable deposit franchise, reasonable valuation, and share repurchase program will combine to produce attractive returns for shareholders over the next few years.
My notes on ALLY: https://twitter.com/AndrewRangeley/status/1467960317242134537?s=20
Enlightened's twitter: https://twitter.com/Cultivatewealth
Sleep's twitter: https://twitter.com/SleepwellCap
Enlightened's Ally write up: https://enlightenedcapital.substack.com/p/ally-financial-ally-investment-analysis
TSOH Ally write up: https://thescienceofhitting.com/
Chapters
0:00 Intro
1:10 ALLY overview and history
5:00 Laying out the ALLY bull thesis
8:25 The ALLY valuation case
9:35 How good is ALLY's deposit base?
14:55 Does ALLY have a moat on their lending standards?
20:10 Discussing ALLY's strategic relationship
24:10 What is the market pricing into ALLY's stock?
28:20 ALLY's capital allocation (acquisitions and share repurchases)
33:15 Comping ALLY to a neo-bank
35:50 Ally's insider incentive and share ownership (or lack thereof)
38:45 Discussing Ally's exec comp and potential misalignment
41:20 Of all the stocks in the world, why is ALLY worth buying?
48:45 The decline of car ownership and rise of EVs as a tail risk
52:20 More on what ALLY would do if auto loan demand decreased dramatically
56:20 What's the end game for ALLY?
58:45 Would ALLY be a strategic target for M&A?
1:03:20 Closing thoughts
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