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A few months ago, I wrote a blog post stating that I was buying shares of Ally Financials, Inc. Ally is a financial services company. I invest in a lot of fintech stocks, but I became interested in Ally because I thought the stock was trading at a stupidly low valuation. At the time, Ally was trading at a $7.82 billion valuation. Now, Ally is trading at an $8.18 billion valuation. Obviously, I am happy that my shares in the company have increased in value, but it is important to note that at an $8.18 billion valuation, Ally is worth $27.19 a share. The company, however, was worth $35.78 a share shortly after my original blog post on the company went public. Obviously, my blog post had nothing to do with the stock increasing, but the day after it went live, the stock shot up 30% after a great quarterly report.
To recap, I bought shares in Ally Financials, Inc., the stock dramatically increased in price shortly after, and the stock then fell. Now, why did the stock fall? Silicon Valley Bank. When Silicon Valley Bank fell, a lot of bank stocks saw their valuations start to plummet. Since then, a lot of the stocks have started to recover.
Even with Silicon Valley Bank's collapse, I still held onto my Ally shares. The reason was because I did not think Silicon Valley Bank's fall would have any long-term effect on Ally. Ally is still in a strong position for growth. It is still trading at an absurdly low p/e ratio (5.39). I still think it's a really good company.
I believe my thesis on the company is still just as true as it was when I first wrote it. As long as that's true, I will keep buying shares of this company as I believe they cost way less than they are actually worth.
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