Billionaire Mario Gabelli’s 10 Small-Cap Stock Picks with Huge Upside Potential

Page 3 of 10

8. Herc Holdings Inc. (NYSE:HRI)

GAMCO Investors’ Stake: $212.26 million

Number of Hedge Fund Holders: 32

Market Capitalization as of May 8: $3.50 billion

Average Upside Potential as of May 8: 18.81%

Herc Holdings Inc. (NYSE:HRI) operates as an equipment rental supplier. It rents aerial, earthmoving, material handling, trucks & trailers, air compressors, compaction, and lighting equipment. The company sells its products through its sales team and industry catalogs, as well as through participation and sponsorship of industry events, trade shows, and the Internet.

The company’s Equipment Rental segment grew its revenue by ~5% year-over-year in Q1 2025. This growth was achieved despite headwinds from unusually cold weather that impacted local rentals. The acquisition of H&E Equipment Services and its 160 US branch locations is positioned to drive further growth at Herc. This acquisition aims to expand Herc’s scale, geographic coverage, and long-term opportunities by integrating H&E’s locations, fleet categories, and local & national account presence.

Herc plans to use its expertise in cross-selling specialty fleet to H&E’s general rental customer base to drive revenue synergies. The company anticipates 20% capture in the first year of integration, which would potentially ramp up to 60% in year 2 with specialty cross-selling, and the remainder in year 3. Herc Holdings Inc. (NYSE:HRI) is also managing its fleet investments, with a ~35% lower net fleet CapEx plan for 2025 at the midpoint of the company’s guidance.

Page 3 of 10