Trade-Ideas: Hertz Global Holdings (HTZ) Is Today's Momo Momentum 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 momo momentum 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 $473.3 million.
  • HTZ has a PE ratio of 34.6.
  • HTZ is currently in the upper 30% of its 1-year range.
  • HTZ is in the upper 25% of its 20-day range.
  • HTZ is in the upper 35% of its 5-day range.
  • HTZ is currently trading above yesterday's high.
  • HTZ has experienced a gap between today's open and yesterday's close of 0.1%.

'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.

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More 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 34.6. Currently there are 4 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 10.6 million shares per day over the past 30 days. Hertz Global has a market cap of $10.7 billion and is part of the services sector and diversified services industry. The stock has a beta of 2.31 and a short float of 3.3% with 0.51 days to cover. Shares are up 45.5% year to date as of the close of trading on Friday.

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 and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 3.6%. Since the same quarter one year prior, revenues rose by 22.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, HTZ's share price has jumped by 65.25%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • HERTZ GLOBAL HOLDINGS INC's earnings per share declined by 14.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. 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 ($1.71 versus $0.54).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Road & Rail industry. The net income has decreased by 11.6% when compared to the same quarter one year ago, dropping from $242.92 million to $214.70 million.

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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