Alliance Data's (ADS) July Receivables Rise In Card Business

Alliance Data Systems Corporation (NYSE:ADS) recently reported an increase in average receivables in its Card Services segment for the month of July.

This Plano, TX-based company recorded average receivables of $16.1 billion for the same month, up 16.7% year over year. For the seven-month period ended July 2017, average receivables increased 16.3% year over year to $15.8 billion.

Net charge-offs came in at $81.1 million for the reported month, while for the seven-month period ended July 2017, net charge-offs were $573.0 million.

As a percentage of average receivables, net charge-offs for the month and the seven-month period ended July 2017, were 6.0% and 6.2%, respectively. The company had reported 5.4% and 5.2%, respectively for the same, in the prior-year period.

This Zacks Rank #3 (Hold) financial transaction service provider stated that the net loss rates are estimated to be lower in the second half of 2017 compared with the first half. Also, net loss rates are in line with Alliance Data’s full-year 2017 and 2018 consolidated guidance.

Alliance Data has rallied 11.16% in a year’s time, underperforming the industry’s increase of 24.52%. However, we expect both bottom- and top-line growth, along with improving EBITDA and a robust capital position, to help the stock to turn around in the near term.

Stocks to Consider

Some better-ranked stocks from the finance sector are American Financial Group, Inc. (NYSE:AFG) , CNO Financial Group, Inc. (NYSE:CNO) and Argo Group International Holdings, Ltd. (NASDAQ:AGII) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

American Financial provides property and casualty insurance products in the United States. The company delivered positive surprises in three of the last four quarters with an average beat of 17.03%.

CNO Financial develops, markets and administers health insurance, annuity, individual life insurance and other insurance products for senior and middle-income markets in the United States. The company delivered positive surprises in three of the last four quarters with an average beat of 6.69%.

Argo Group underwrites specialty insurance and reinsurance products in the property and casualty market worldwide. The company delivered positive surprises in all the last four quarters with an average beat of 26.51%.

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