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Is It Too Late to Buy Credit Acceptance (CACC) Stock?

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Curreen Capital recently released its Q1 2021 Investor Letter, a copy of which you can download here. The fund posted a return of 36.7% for the quarter, outperforming their benchmark, the S&P 500 Index which returned 6.17% in the same quarter. You should check out Curreen Capital's top 5 stock picks for investors to buy right now, which could be the biggest winners of this year.

In the Q1 2021 Investor Letter, the fund highlighted a few stocks and Credit Acceptance Corp (NASDAQ:CACC) is one of them. Credit Acceptance Corp (NASDAQ:CACC) is an auto finance company. In the last three months, Credit Acceptance Corp (NASDAQ:CACC) stock gained 3%. Curreen Capital cared to mention Credit Acceptance Corp (NASDAQ:CACC) in its investor letter, though they didn’t say why they really like the stock. All they said is this:

"Credit Acceptance is a subprime auto lender, enabling subprime borrowers to buy vehicles from used car dealerships. The business has profitably gained share in a large and difficult market for more than two decades. Management allocates free cash flow to growing the business and repurchasing shares at attractive prices. Credit Acceptance currently trades at an attractive upside-to-downside ratio."

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Andrey_Popov/Shutterstock.com

Curreen Capital has been a long time Credit Acceptance Corp (NASDAQ:CACC) bull. In January 2021, we shared Curreen Capital CACC’s thesis in this article.

In Q4 2020, the number of bullish hedge fund positions on Credit Acceptance Corp (NASDAQ:CACC) stock remained unchanged from the previous quarter (see the chart here). Our calculations showed that Credit Acceptance Corp (NASDAQ:CACC) isn't ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds' poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage:

Disclosure: None. This article is originally published at Insider Monkey.