Ally is one of my favorite stocks, and it is one that I definitely plan on buying more of. They are a digital financial-services company most known as a digital bank. Here’s why I’m buying more shares:
I like buying digital banks because they don’t have to deal with the cost of brick and mortar locations and are becoming more and more popular. There’s huge demand for banks like this, and they are cheaper to run. This equation, I believe, is good to invest in.
Ally Financials, specifically, interests me because I believe that the stock is very cheap. I bought shares of this company earlier this year because I believed the stock was cheap, and I believe that that is still true now. The company currently has a p/e ratio of 7.16. While it is true that banks usually have lower p/e ratios compared to other industries, I don’t believe that Ally should. The reason for this is because Ally has, in my opinion, a lot of potential for growth.
The reason for this low valuation, I believe, is because of short term problems. Investors worry about Ally in regards to rising interest rates, declining car values, and inflation. I agree that this is reason for concern in the short term, but the keyword in that sentence is short term. I think it’s a short term hurdle for a strong business, and I’m really just concerned with the long term of this company. These problems are letting me buy this stock that I plan to hold for awhile at a very good valuation which is, of course, great for me.
Ally also has a 4.54% dividend. I like a good dividend because it gives me cash flow, but I also do wish that they were investing that money back into the business instead of giving it to me. That said, it’s a strong dividend for dividend investors.
All in all, Ally offers strong products that I believe will continue to be in high demand, and I think it is insanely cheap because of short term issues that I don’t believe will impact long term growth. Because of this, I believe that it’s a great investment for me. I plan to buy more shares of the company.
Download the investing app SoFi through our link and deposit $10, and you’ll get $25 for free! Download here – https://www.sofi.com/invite/invest?gcp=3cf3452a-7a65-41c8-b2d4-dc3752d20d92&isAliasGcp=false
Download money manager Acorns. Acorns manages and invests your money for you! Download Acorns through our link and get $5 – https://share.acorns.com/zones/friend_landing_experience_microsite?extole_share_channel=SHARE_LINK&extole_shareable_code=calebtanner64&cro-test=true
Check out the SoFi credit card. This is a great credit card for investors as it offers 2% cash back that one can use to invest. Download it through our link and get $50 if approved! – https://www.sofi.com/invite/credit-card?gcp=697cc781-fb37-447d-923c-4ef1c7de6837&isAliasGcp=false
Finance by CWT 