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Avis Budget Group Inc. (CAR) Beats Estimates in Q2 but Lowers Full-Year Guidance: Is It A Buy?

How are hedge funds trading Avis Budget Group Inc. (NASDAQ:CAR)?

Of the hedge funds tracked by Insider Monkey, Karthik Sarma’s SRS Investment Management had the largest position in Avis Budget Group Inc. (NASDAQ:CAR), with around 10 million shares worth close to $590.2 million, corresponding to 23.3% of its total 13F portfolio, by the end of March. Coming in second is Glenview Capital, managed by Larry Robbins, with around 7 million shares valued at $418.6 million. Other ‘hedgies’ with similar optimism include Chase Coleman‘s Tiger Global Management, David Cohen and Harold Levy’s Iridian Asset Management and Jeffrey Tannenbaum‘s Fir Tree.

Since Avis Budget Group Inc. (NASDAQ:CAR) has witnessed falling interest from hedge fund managers, we can see that there exists a select few hedge fund managers who sold off their positions heading into the second quarter. At the top of the heap, Richard McGuire’s Marcato Capital Management cut the biggest stake, which previously contained some 3.3 million shares, while Brian Jackelow‘s SAB Capital Management unloaded 2.2 million shares. These moves are important to note, as aggregate hedge fund interest fell by eight funds during the January – March period.

Overall, hedge funds were bearish on Avis Budget Group Inc. (NASDAQ:CAR) and they were right to remain bearish as the stock had lost around 25% of its value since the end of the first quarter. Despite the earnings beat, the company’s decision to lower its guidance for full-year might work against the stock in the near future. Considering the bearish hedge fund sentiment coupled with lowered full-year guidance we don’t recommend to buy this stock at the moment.

Disclosure: None

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