Trade-Ideas: Hertz Global Holdings (HTZ) Is Today's "Storm The Castle" Stock
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.Trade-Ideas LLC identified Hertz Global Holdings (HTZ) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Hertz Global Holdings as such a stock due to the following factors:
- HTZ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $391.8 million.
- HTZ has traded 7.9 million shares today.
- HTZ is trading at 1.68 times the normal volume for the stock at this time of day.
- HTZ crossed above its 200-day simple moving average.
'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.EXCLUSIVE OFFER: Get the inside scoop on opportunities in HTZ with the Ticky from Trade-Ideas. See the FREE profile for HTZ NOW at Trade-IdeasMore details on HTZ: Hertz Global Holdings, Inc., through its subsidiaries, engages in the car and equipment rental businesses worldwide. The company operates in two segments, Car Rental and Equipment Rental. HTZ has a PE ratio of 33.5. Currently there are 3 analysts that rate Hertz Global Holdings a buy, 1 analyst rates it a sell, and none rate it a hold.The average volume for Hertz Global Holdings has been 5.8 million shares per day over the past 30 days. Hertz Global has a market cap of $10.4 billion and is part of the services sector and diversified services industry. The stock has a beta of 2.35 and a short float of 4.1% with 0.73 days to cover. Shares are up 58.6% year to date as of the close of trading on Thursday.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.TheStreetRatings.com Analysis:TheStreet Quant Ratings rates Hertz Global Holdings as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 2.6%. Since the same quarter one year prior, revenues rose by 22.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- HERTZ GLOBAL HOLDINGS INC has improved earnings per share by 28.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, HERTZ GLOBAL HOLDINGS INC increased its bottom line by earning $0.54 versus $0.38 in the prior year. This year, the market expects an improvement in earnings ($1.90 versus $0.54).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Road & Rail industry. The net income increased by 30.7% when compared to the same quarter one year prior, rising from $92.89 million to $121.44 million.
- The gross profit margin for HERTZ GLOBAL HOLDINGS INC is rather high; currently it is at 51.50%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, HTZ's net profit margin of 4.47% significantly trails the industry average.
- Net operating cash flow has slightly increased to $715.05 million or 7.29% when compared to the same quarter last year. Despite an increase in cash flow, HERTZ GLOBAL HOLDINGS INC's average is still marginally south of the industry average growth rate of 12.97%.
- You can view the full Hertz Global Holdings Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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