Hertz Global (HTZ) Stock Gains Today on Increased Tiger Global Stake

Update: This report falsely stated that Tiger Global is Carl Icahn's investment firm. The company does not in fact have anything to do with Icahn.

NEW YORK (TheStreet) -- Hertz Global (HTZ) shares are up 5.8% to $22.55 in trading on Thursday after investment firm Tiger Global revealed an increased stake in the car rental company after the closing bell yesterday.

The firm purchased 2.63 million shares on the open market at an average cost of $21.36 per share for a total transaction cost of $56,244,361.68, according to SEC filings.

With the purchase, Tiger Global investment firm upped its stake in the company to 10.77% from 8.48%. The firm had reported owning 3,042,800 shares at the end of the second quarter, a number that increased to 15,851,100 at the end of the third quarter.

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TheStreet Ratings team rates HERTZ GLOBAL HOLDINGS INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate HERTZ GLOBAL HOLDINGS INC (HTZ) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, good cash flow from operations, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • 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 98.4% when compared to the same quarter one year prior, rising from -$36.80 million to -$0.60 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.6%. Since the same quarter one year prior, revenues rose by 10.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has increased to $738.00 million or 25.50% 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 21.45%.
  • HERTZ GLOBAL HOLDINGS INC reported significant earnings per share improvement 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 year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, HERTZ GLOBAL HOLDINGS INC increased its bottom line by earning $0.76 versus $0.54 in the prior year. For the next year, the market is expecting a contraction of 11.8% in earnings ($0.67 versus $0.76).
  • 48.04% is the gross profit margin for HERTZ GLOBAL HOLDINGS INC which we consider to be strong. Regardless of HTZ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HTZ's net profit margin of -0.02% significantly underperformed when compared to the industry average.
  • You can view the full analysis from the report here: HTZ Ratings Report
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