Larry Robbins’ Glenview Boosts Stake in Hertz Global Holdings Inc. (HTZ); Is the Stock Set to Rebound?

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Overall, Hertz Global Holdings Inc. (NYSE:HTZ) has witnessed an increase of the hedge fund confidence in the last several months. There were 67 hedge funds within our database that owned stakes in the company at the end of the second quarter, compared with 63 reported in the prior quarter. However, the value of the total stakes decreased to $4.06 billion from $5.04 billion over the quarter, while the stock lost over 16% during the April – June period. It is also worth mentioning that the hedge funds tracked by Insider Monkey own 48.90% of Hertz’s outstanding stock, which yet again implies confidence in the company’s future outlook. Therefore, it seems that the smart money believe in the growth or turnaround strategy of the company, but it might take a while until it brings results.

Hertz Global Holdings has been in turmoil for the past year, as the car and truck rental company had to restate its 2011, 2012, and 2013 financial reports due to the discovery of accounting irregularities. However, all the talks around the misstatements should now be over, as the company has already cleared that issue. In addition to the closing of the investigation, the company reaffirmed a $1 billion share-buyback plan and announced the spin-off of its equipment-leasing unit that is expected to finalize in the second quarter of 2016. Moreover, Hertz intends to cut $300 million in costs by freezing the defined-benefit pension plan, closing loss-making offices, improving its fleet management, and implementing a cloud-based IT platform, which suggests that the company has a clear and defined plan of how to turn things around. John Tagues, the recently-assigned CEO, stands behind this overhaul as he plans to assist the company in profiting from the industry’s oligopoly structure.

To conclude with, Hertz Global Holdings Inc. (NYSE:HTZ)’s stock was not overlooked by the latest decline of the stock markets and as there is a high level of uncertainty in stock markets, it will surely put some downward pressure on Hertz’s stock and on the company’s performance in general. However, Hertz is set to rebound and attempt to achieve its full potential in the worst case should the current state of uncertainty waste away.

Disclosure: None

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