“Hertz Global Holdings, Inc. (HTZ NYSE) is in the fast lane. The rental company, with a fleet of nearly 760,000 cars, operates roughly 10,400 locations in about 150 countries. Hertz also rents equipment, while a separate unit offers fleet-management services. The car-rental industry has consolidated in recent years, leaving only three major U.S. players - Hertz, Avis Budget Group (CAR), and privately-held Enterprise. Hertz acquired Dollar Thrifty for $3.2 billion in November and purchased a 20% stake in China Auto Rental Holdings in April. Favorable pricing trends and improved demand from business and leisure travelers bode well for growth. Finally, with large acquisitions likely behind the company, Hertz can direct its surging cash flow toward stock repurchases and debt repayment. On April 29, management reiterated its full-year outlook, which calls for per-share earnings of $1.82 to $1.92, implying growth of 37% to 44%. Hertz is being initiated as a Buy and a Long- Term Buy.”
Richard J. Moroney, CFA, Dow Theory Forecasts, www.dowtheory.com, 800-233-5920, 5/20/13
