OneMain Stock Is Up 30% This Past Year but One Fund Just Cashed Out $4.8 Million

Florida-based Gator Capital Management eliminated its position in OneMain Holdings (NYSE:OMF), reducing exposure by $4.78 million, according to a November 13 SEC filing.

What Happened

Gator Capital Management disclosed in a November 13 SEC filing that it exited its entire holding in OneMain Holdings (NYSE:OMF), selling 83,850 shares. The transaction’s estimated value was $4.78 million based on quarterly average pricing.

What Else to Know

The fund's OneMain Holdings position represented 1.48% of AUM in the previous period -- before the third-quarter sale.

Top holdings after the filing include:

• NASDAQ: HOOD: $76.63 million (19.7% of AUM)
• NYSE: HOUS: $27.15 million (7.0% of AUM)
• NASDAQ: FCNCA: $16.99 million (4.4% of AUM)
• NYSE: AX: $13.04 million (3.3% of AUM)
• NASDAQ: UMBF: $12.03 million (3.1% of AUM)

As of Friday, shares of OneMain Holdings were priced at $69.08, up 30% over the past year and well outperforming the S&P 500, which is up about 15% in the same period.

Company Overview

Company Snapshot

• OneMain Holdings offers personal loans, credit cards, and insurance products through branch offices and an online platform.
• The company generates revenue primarily from interest income on consumer lending, ancillary insurance products, and related service fees.
• It serves non-prime and near-prime consumers across most U.S. states, focusing on individuals seeking personal financial solutions.

OneMain Holdings provides personal installment loans and related financial products to non-prime consumers in the United States. The company leverages an extensive branch network and digital channels to reach a broad customer base, emphasizing accessible credit solutions and cross-sold insurance offerings.

Foolish Take

Over the past year, OneMain has delivered exactly what income-oriented shareholders might hope for: steady earnings, improving credit metrics, rising dividends, and aggressive buybacks. The stock’s roughly 30% climb reflects that execution, not hype. But portfolio management is more about trade-offs. In the third quarter, OneMain posted $1.67 in GAAP EPS (up from $1.31 one year prior), raised its dividend again to $1.05 per share, and authorized a fresh $1 billion buyback program. Managed receivables grew to nearly $26 billion while net charge-offs continued to trend lower -- meaning that, operationally, the business looks solid.

The decision to exit appears more about concentration and redeployment than concern. OneMain had been a modest position, and trimming a lender after a strong run frees capital for higher-conviction ideas elsewhere in the portfolio. That is especially true when other top holdings skew toward growth and platform-driven businesses rather than consumer credit.

Glossary

Assets Under Management (AUM): The total market value of investments managed on behalf of clients by a fund or firm.
13F: A quarterly report filed by institutional investment managers to disclose their equity holdings to the SEC.
Stake: The ownership interest or investment a fund or individual holds in a particular company.
Dividend Yield: The annual dividend payment expressed as a percentage of a stock's current price.
Non-prime: Refers to borrowers with lower credit scores, considered higher risk than prime borrowers.
Near-prime: Borrowers whose credit scores are just below prime, typically presenting moderate credit risk.
Ancillary insurance products: Additional insurance offerings sold alongside primary financial products, such as loans.
Installment loans: Loans repaid over time with a set number of scheduled payments, typically monthly.
Cross-sold: The practice of selling additional products or services to existing customers.
Outperforming: Achieving a higher return or better performance compared to a benchmark or index.
Branch network: A group of physical office locations operated by a financial institution to serve customers.
TTM: The 12-month period ending with the most recent quarterly report.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Axos Financial. The Motley Fool has a disclosure policy.