Textron Inc. (TXT), The Boeing Company (BA): Why I’m Buying These 4 Stocks

While I’m currently down overall in this position, there are enough encouraging signs to make me want to stay invested and add to it. I mentioned several above. There is also the continued move of the company out of the jack-up rig business (it has only a few left to sell) along with reducing the company’s debt level. The goal is to pay $1 billion in excess repayment by the end of next year with a target of reducing the $11.2 billion in debt down to $7 billion-$9 billion. That’s a plus and will go a long way toward improving the balance sheet of the company.

I’ll be adding to the position at this reduced price. Earnings are expected to grow for the next several years and management says the plan is to grow the dividend, too, so this should turn out well in the long run.

Beep, beep

I’ve only purchased Hertz Global Holdings, Inc. (NYSE:HTZ) twice in this portfolio, keeping the stake rather small, which is unfortunate because it’s done quite well. In the two-plus years the portfolio’s owned shares, the position is up 59% overall.

Today, Hertz Global Holdings, Inc. (NYSE:HTZ) is a much bigger company, having recently absorbed Dollar Thrifty. In the most recent quarter, car rental revenue is up – 25.7% year over year for the first quarter – and, more interesting, so is equipment rental – up 16.2%. (Bet you didn’t know that Hertz rents all kinds of equipment, from boom lifts to earth movers.) Car rental revenue growth was largely driven by the acquisition which helped the U.S. business grow 38%. But the rental revenue increase is coming from non-residential construction growth.

The company’s expanding into China, taking a 20% equity stake in China Auto Rental, the largest (by far) rental company in that country. This brings in more income and gives Hertz a Chinese presence via co-branding to take advantage of a market expected to grow by 15% a year for the next several years.

Hertz is doing a lot of things right, its market conditions are improving, and the portfolio’s position is up. I’ll be adding more.

The article Why I’m Buying These 4 Stocks originally appeared on Fool.com and is written by Jim Mueller.

Jim Mueller owns shares of Freeport-McMoRan Copper & Gold, Transocean, and Textron. The Motley Fool owns shares of Freeport-McMoRan Copper & Gold, Hertz Global (NYSE:HTZ) Holdings, Textron, and Transocean.

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