Rental Car Stocks: Will They Crash Your Portfolio?

Rental Car Stocks: Will They Crash Your Portfolio?

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Until recently, car rental company Dollar Thrifty Automotive Group (DTG) was up for sale and gaining interest from competitors Hertz (HTX), Avis Budget (CAR) and Enterprise. But after Avis dropped out last week and next-in-line bidder Hertz failed to step up, the company decided it was no longer for sale.

Acquisition of Dollar Thrifty would have taken strain off of the strong price competition in the already cutthroat market. But now these four large car rental companies, which make up the majority of the market, are continuing their price war to get cars moving off of lots.

Daily Finance reports the acquisition and removal of competition might have also meant higher stock values. "Now that sector consolidation is off the table, there really isn't a lot to rev this market higher. Analysts see all three publicly traded companies posting single-digit revenue growth this year and again in 2012."

Factors that contribute to demand for car rentals – such as business travel and family vacations – may also be in jeopardy if the economy doesn't recover.

Another fierce competitor that wasn't even in the picture a few years ago is the increasingly popular car-sharing services. The poster child of that industry is Zipcar (ZIP), which rents its cars at cheap hourly rates and boasts over 605,000 members.

"Unlike traditional rental agencies that treat marked-up insurance and premium-priced gasoline as profit centers, Zipcar includes fuel and insurance with its rentals. The math works for those living in the densely populated markets that Zipcar serves," writes Daily Finance.

Do you think these new trends in the auto rental industry is cause for concern? To help you conduct your own analyses we list below the rental companies mentioned in this article.

Use this information as a starting point for your own analysis.

 

1. Avis Budget Group, Inc. (CAR, Earnings, Analysts, Financials): Rental & Leasing Services Industry. Market cap of $1.23B. Provides car and truck rentals, and ancillary services to businesses and consumers in the United States and internationally. Share price as of 10/13 at $11.74. The stock has had a couple of great days, gaining 14.31% over the last week.

 

2. Dollar Thrifty Automotive Group Inc. (DTG, Earnings, Analysts, Financials): Rental & Leasing Services Industry. Market cap of $1.74B. Dollar Thrifty Automotive Group, Inc. through its subsidiaries, rents and leases vehicles through company owned and franchised stores under Dollar and the Thrifty brand names primarily in the United States and Canada. Share price as of 10/13 at $59.92. The stock is a short squeeze candidate, with a short float at 14.88% (equivalent to 7.94 days of average volume). The stock has gained 23.04% over the last year.

 

3. Hertz Global Holdings, Inc. (HTZ, Earnings, Analysts, Financials): Rental & Leasing Services Industry. Market cap of $4.47B. Engages in the car and equipment rental businesses worldwide. Share price as of 10/13 at $10.73. This is a risky stock that is significantly more volatile than the overall market (beta = 2.51). The stock has had a couple of great days, gaining 13.42% over the last week.

 

4. Zipcar, Inc. (ZIP, Earnings, Analysts, Financials): Consumer Services Industry. Market cap of $692.18M. Operates a car sharing network for its members in metropolitan areas and on university campuses in the United States, Canada, and the United Kingdom. Share price as of 10/13 at $17.73. The stock is a short squeeze candidate, with a short float at 13.59% (equivalent to 15.59 days of average volume). The stock has performed poorly over the last month, losing 15.49%.

 

(By Rebecca Lipman. Data from Finviz)

 

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11 Responses to “Rental Car Stocks: Will They Crash Your Portfolio?”

  1. Keeneth says:

    Car rental service in different cities is growing day by day. Before going to car rental service, one should think for best deal on car rental service. Before hiring a rental car one should know the detail rules and regulation of the company by which the company will not charge much money from the customer.

  2. George says:

    Demand for car rental service is increasing day by day. Thrifty’s car rental service is really very reasonable to travelers. This is not suitable for all travelers due to limited pick-up areas. Before going to hire car rental service one should know properly the rules and regulations of the company for better journey.
    Auto Care Tips

  3. marlenechip says:

    I've turned for a few times to a rental car service when my car was broken and I had to let it to all seasons company to repair it. I always go to the same rental company because I like how they treated me.

  4. Donald says:

    In big cities people depends on rented car for traveling. The car service should be reasonable in price and quick. Better service can attract more customers to hire rental car by which company’s reputation will increase. Thrifty Car Rental service to Florida City is really impressive.

  5. Richard says:

    Car rental service in different cities is growing day by day. Before going to car rental service, one should think for best deal on car rental service. Before hiring a rental car one should know the detail rules and regulation of the company by which the company will not charge much money from the customer.

  6. David says:

    In big cities people depends on rented car for traveling. The car service should be reasonable in price and quick. Better service can attract more customers to hire rental car by which company’s reputation will increase. Thrifty Car Rental service to Florida City is really impressive.

  7. Within big towns individuals will depend on hired car pertaining to touring. The vehicle services must be affordable in price and also fast. Far better services can appeal to far more customers to use hire car where company’s name increases. Cash conscious Vehicle Procurment services to help Texas Location is absolutely impressive.

  8. davidanjan668 says:

    Sundance Vacations is mostly a national generate services that is focused on retail store retailer store shop stash shop holiday christmas resorts.
    http://www.linkedin.com/company/sundance-vacation

  9. Beenu says:

    Looks cool, I never knew you could post about it, good to know thanks! You show very latest and important things. This is very nice post! I will bookmark this blog.Let us know about myself

  10. phone says:

    car rental service is really nice service for needy ones…
    it will others who can't afford cars…

  11. tommyanderson044 says:

    "car rental company Dollar Thrifty Automotive Group (DTG) was up for sale and gaining interest from competitors Hertz (HTX), Avis Budget (CAR) and Enterprise"

    - yeah of course i know their competitors are really going to be happy with it.
    Thanks,
    Sierra Vista, Arizona Shuttle

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