Hertz Global Holdings, Inc. (HTZ), Avis Budget Group Inc. (CAR): Score A 24% Gain From A Stock That’s Already Doubled This Year

However, if I were forced to choose between the two, my money would be on Hertz. Here’s why:

The company just posted solid second-quarter results with earnings of just over $121 million or 27 cents per share, up from 21 cents a year ago. Revenue soared 22% to just over $2.7 billion. In addition, revenue per transaction rose 1.2%, and Hertz’s vehicle fleet grew 27%. However, the company conservatively reaffirmed its full-year expectations for profit of between $1.82 and $1.92 a share, disappointing analysts who had expected $1.90.

Sounds like a solid, growing company, right? Well, the shares dropped sharply on the news from nearly $27 to $25. This dip is why I like Hertz Global Holdings, Inc. (NYSE:HTZ) right now. Clearly, the fundamentals do not warrant the sell-off, so the lower price is a great opportunity for investors.

Risks to Consider: The auto-rental business is closely tied to the economy. The business should continue to thrive as long as the economic picture improves.

Action to Take –> I Like Hertz right now as the pullback from the uptrend created a value buy zone on the chart. Buying here in the mid-$25 area with a nine-month target of $31 and stops at $24 makes solid sense as the economy continues to improve. In addition, Hertz’s solid results indicate it is on the right track to continued profits.

P.S. — The car-rental industry surely already knows about the tiny company that could kill the gasoline engine — and investors who read our latest report, “The 11 Most Shocking Investment Predictions For 2014,” will, too. Our previous predictions have returned up to 310% in a year; to learn more, click here.

– David Goodboy

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