Ally Financial

Ally Financial is the rarest kind of Buffett position — a 2024 new buy. Berkshire disclosed its 12.7M-share stake (worth roughly $1B at entry) in the Q1/2024 13F, and Buffett did something unusual: he marked it confidential at first, indicating he wanted more room to accumulate. By Q1/2026, Berkshire still owned the entire position at ~3.4% of the company.

The setup in May 2026: Ally trades at $42.73, a forward P/E of 6.59, and 0.99× tangible book value. That is below-book pricing for a bank with 9.4% ROE and 19.7% revenue growth. The market is pricing Ally as if the auto-loan cycle is about to break — net charge-offs on the retail-auto book hit 2.27% in Q1/2026, near the 2.4% cycle peak management has guided to.

The story is auto finance plus the digital-bank deposit base. Ally originated $9.6B in retail-auto loans in Q1/2026 with an average yield of 10.7% — the highest origination yield in the company's history. The Ally Bank deposit franchise sits at $151B with 92% FDIC-insured retail money — meaningfully stickier than the wholesale-funded competitors that imploded in 2023.

Buffett's Ally entry in Q1/2024 was Berkshire's first new financial since the 2020 Citigroup buy. Filings show Berkshire built the position between $32 and $38 — well below the current $42 — and has not sold a share through five subsequent 13F filings. The Confidential-Treatment-Request status was lifted in Q3/2024, signalling Berkshire had finished the build.

Notable accompanying activity: Bridger Capital (Roberto Mignone) added 3.2M shares in Q1/2026, joining at 2.1% ownership. Sachem Head (Scott Ferguson) holds 3.8M shares and filed a 13D-light constructivist letter in March 2026 pushing for a buyback acceleration. Vanguard remains the largest passive holder at 11.4%.

Insider activity (Form 4): CEO Michael Rhodes bought 25,000 shares on the open market in February 2026 at $38.50 — the first open-market insider buy since 2022. CFO Russ Hutchinson also added 8,000 shares. No insider selling in the past six months.

Ally Financial trades at a forward P/E of 6.59 and 0.99× tangible book value as of May 2026. The closest peer comparison is Capital One Auto Finance (forward P/E 9.2, P/TBV 1.4) and Synchrony Financial (forward P/E 7.8, P/TBV 1.3). Ally's discount reflects three legitimate concerns: subprime-auto exposure, used-car-price risk, and the slow CFPB-related rebuild of the Mortgage Finance segment. Wall Street median price target is $54.01 (26.4% upside) — analyst dispersion is unusually wide, with Wells Fargo at $46 (bear, credit cycle) and Citigroup at $70 (bull, NIM expansion). Sum-of-the-parts analysis values Ally Bank deposits at ~$28/share, Auto Finance at ~$18/share, and Insurance/Corporate Finance at ~$8/share — implying a $54 intrinsic value at current discount rates. The dividend (2.81%) plus buyback yield (~6%) provides a 9% baseline return before any multiple rerating.

1. July 17, 2026: Q2/2026 earnings — net charge-off trajectory is the make-or-break datapoint; <2.30% sustains the bull case
2. September 2026: Federal Reserve stress test results — Ally's stress capital buffer outcome drives 2027 buyback capacity
3. Q4/2026: Berkshire 13F filing — any incremental add would be a major positive signal; trimming would matter equally

Ally Financial is the Buffett position retail investors largely sleep on, and that asymmetry is exactly why it interests me. At 0.99× tangible book and forward P/E 6.6, the market is pricing a recession that has not arrived — and even if it does, Ally's reserves cover 3.4% of the book versus a stressed-case loss of 3.0%. The 26% upside to the analyst median is real, but the better way to think about it: you collect a 9% capital-return yield while waiting for the credit cycle to clarify. My add-trigger is below tangible book — meaning sub-$40 — which would also be a meaningful add-zone for Berkshire if the price gets there. Position-size carefully; this is a cyclical, not a compounder.