Water-Logged And Getting Wetter Stock Of The Day: Hertz Global Holdings (HTZ)

Trade-Ideas LLC identified Hertz Global Holdings (HTZ) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Hertz Global Holdings

(

HTZ

) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) 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 $108.4 million.
  • HTZ has traded 9.3 million shares today.
  • HTZ traded in a range 254.1% of the normal price range with a price range of $1.92.
  • HTZ traded below its daily resistance level (quality: 38 days, meaning that the stock is crossing a resistance level set by the last 38 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on HTZ:

Hertz Global Holdings, Inc., through its subsidiaries, rents and leases cars and trucks in the United States and internationally. It operates in four segments: U.S. Car Rental, International Car Rental, Worldwide Equipment Rental, and All Other Operations. Currently there are 3 analysts that rate Hertz Global Holdings a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Hertz Global Holdings has been 7.4 million shares per day over the past 30 days. Hertz Global has a market cap of $8.2 billion and is part of the services sector and diversified services industry. The stock has a beta of 1.61 and a short float of 7.3% with 4.51 days to cover. Shares are down 24.6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Hertz Global Holdings as a

hold

. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.

Highlights from the ratings report include:

  • Net operating cash flow has slightly increased to $669.00 million or 4.20% when compared to the same quarter last year. In addition, HERTZ GLOBAL HOLDINGS INC has also modestly surpassed the industry average cash flow growth rate of -3.71%.
  • 46.49% is the gross profit margin for HERTZ GLOBAL HOLDINGS INC which we consider to be strong. 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 0.85% significantly trails the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 7.3%. Since the same quarter one year prior, revenues slightly dropped by 4.9%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The debt-to-equity ratio is very high at 7.41 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Road & Rail industry and the overall market, HERTZ GLOBAL HOLDINGS INC's return on equity significantly trails that of both the industry average and the S&P 500.

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