have been a bright light in this otherwise dim economic recovery.
With leisure and corporate travel on the rise,
the car rental business has performing as well.
Today’s bull is the world’s largest auto
renter and a Zacks Rank #1 with some impressive financial statistics.
The Hertz Corporation, which is a subsidiary of Hertz Global Holdings,
(HTZ), is the world's largest airport / general use car rental
their merger with the Dollar-Thrifty brands, the company now operates
10,400 locations in over 150 countries worldwide.
many don’t know is that Hertz also runs one of the world's largest
rental businesses, Hertz Equipment Rental Corporation. Hertz
rental has 340 branches in the United
States, Canada, China, France, Spain and Saudi Arabia.
also owns Donlen Corporation, a leader in providing fleet leasing and
told, Hertz generates 9 billion in revenue (2012); 7.6 billion in their
and fleet management divisions and 1.4 billion from equipment.
& Earnings Growth
The company recently delivered a strong
earnings report, beating on the top and bottom line. Hertz
Global Holdings reported revenue of
$2.32 billion versus top line consensus estimates of $2.30 billion.
reported sales were 15% higher than the prior-year quarter's $2.01
EPS came in hot at
$0.33 compared to the
Zacks Consensus for $0.32 per share. Non-GAAP EPS of $0.33 for Q4 were
higher than the prior-year quarter's $0.24 per share.
GAAP EPS were -$0.09
for Q4 compared to $0.11
per share for the same prior-year quarter.
standalone revenue has growth at 8.5% CAGR over the last 4 years and is
2007 peak levels. Full year 2012 total profit +36% over 2007 peak
value segment is fastest growing in on-airport rental car market and
Dollar-Thifty acquisitions Upgraded value leisure position.
year 2012 U.S. revenue was up 25%; adjusted pre-tax income nearly
Future Growth Strategy
sees tremendous opportunity in “off-airport” rentals which is an $11
growing at 5%-10% annually. HTZ
currently controls less than 12% of the market share in that space,
tremendous potential upside for growth.
company has already begun to penetrate this space and is looking to add
locations annually. They are delivering on
this promise going from 1,580 locations in 2007 to 2,523 locations in
gain of 60%.
off-airport rental business is a bigger revenue generator than
airport locations, with longer rentals and a lower cost structure
company forecasts adjusted pre-tax margins to Increase to at least
2014 from their current levels of just over 10%. They expect 2013
flow of $500 million to $600 million; this is on the heels of a 39 cent
share jump (in cash flow) from FY2011 to FY2012.
less than 11 times forward earnings, this stock should still have some
if they continue to deliver at their current levels of growth.
Since the lows of November 2012, shares of NTZ have been unrelenting in
charge, up over 65% since briefly falling below the 200 day moving
the past 10 trading days alone, the stock has seen a 13% increase in
value, pushing the stocastics close to the 80 level. At
this stage of the game, the short term trend is a bit overbought, but
at $19.17 and $18.25 should provide good cushioning if a pullback were
that shares are at 5-year highs, there isn’t much in the way of
other than the broad market’s sentiment and the daily ATR (average true
of $0.74. Use the ATR to gauge an
abnormal movement in the stock.
50 day moving average has remained above the 200 day moving average
crossing above in October 2012 and the two are diverging, which is a
sign for the longer term bulls.
for a short term pullback in the stock and use that pullback, perhaps
$19.00 area to add some long exposure.
A Levy is one of the most highly sought after traders in the world and
member of three major stock exchanges. That is why you will frequently
appear on Fox Business, CNBC and Bloomberg providing his timely
other investors. He has written and published two tomes, “Your
Options Handbook” and “The
Bloomberg Visual Guide to Options”. You can
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and recommendations through his two portfolio recommendation services:
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