Bidding War Continues For Pros’ Favorite Rental Car Stock (CAR, DTG, HTZ, UHAL)

Tickerspy’s Vehicle Rental Index

VEHICLE RENTAL INVESTING IDEAS

• Popular long ideas: CAR, HTZ, [DTGF]
• Popular short ideas: CAR, [DTGF], ZIP
• Top dividend plays: None
• Pro favorites: HTZ, CAR, UHAL

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VEHICLE RENTAL COVERAGE

These firms are in the business of renting cars and trucks

• Analyst Comments No Help To Zipcar (ZIP, UHAL, CAR, HTZ, DTG)
• Car Rental Stocks Surge On M&A Action (DTG, HTZ, CAR, UHAL)
• Top Indexes Surge By Over 4% In Market Rally (DTG, HTZ, CAR, UHAL, TGB, FCX, SCCO, LLEN, ICO, PCX, BTU, ANR, EEE, YZC)

VEHICLE RENTAL CHART

VEHICLE RENTAL METRICS

Avg. Market Cap:	$5.6B
Avg. P/E Ratio:	24.1
Avg. Div Yield:	0.0%

Avis Budget Group (CAR) hiked the cash portion of its Dollar Thrifty Automotive (DTG) bid by 12% this morning, bringing the total offer to about $1.6 billion, or $53 per share, in an effort to edge out fellow-suitor Hertz Global Holdings (HTZ). The latter’s latest bid came earlier this month, and totaled $1.53 billion, or $50 per share, in cash and stock, based on closing values on Friday, September 10.

Dollar Thrifty is ahead by 2% on the day as its peers in the Vehicle Rental Stocks Index give back some of their recent gains. As a whole, the Index has outperformed the S&P 500 by 5% over the last month, and interestingly, both suitors are outperforming the target company in the ongoing bidding war.

Hertz and Avis have both gained more than 14% for the period, compared to an 8% rally by Dollar Thrifty. Yesterday Avondale Securities took Dollar Thrifty to “Market Perform” from “Market Outperform” and cut the stock’s price target to $51 from $60, noting that an approval of the latest Hertz offer is the most likely outcome of next week’s shareholder vote. It will be interesting to see whether the firm revises its recommendation following this morning’s improved offer from Avis.

At the end of the second quarter, Dollar Thrifty was easily the Pros’ favorite car rental stock, with 19 13F-filing asset managers counting shares among their top-15 U.S.-listed equity holdings. The stock has added 20% over the last three months, and has more than doubled in value over the last year.

Elsewhere in the sector, U-Haul parent Amerco (UHAL) has quietly racked up a 47% three-month rally.

Investors can track the Vehicle Rental Stocks Index for performance trends and a suite of other metrics at tickerspy.com.

Tags: CAR, DTG, HTZ, UHAL