OMF - OneMain Holdings: Successfully Navigating The Storm

2024-02-12 07:38:17 ET

Summary

• OneMain Holdings is a personal lender to the nonprime market, serving underserved borrowers with strong credit quality.
• The company's Q4 earnings showed a deceleration in loan origination but demonstrated strong profitability and capital generation.
• OneMain is expanding into auto-finance and credit cards, which offer profitable pathways of growth in wider markets.

My inaugural analysis on Seeking Alpha covered OneMain Holdings ( OMF ), a personal lender to the subprime market (which they label nonprime). In my thesis, I differentiated their business model from the practices that precipitated the 2008 Financial Crisis and noted how their risk model allows them to originate loans with strong credit quality among these low-score borrowers....

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