Rental and leasing companies rent various equipment and products to consumers and businesses. Items that are usually rented out include cars, aircraft engines, heavy equipment and an array of other products. Rental and leasing companies are somewhat similar to real estate investment trusts, which buy properties, collect rent checks from tenants and then pass on the rent to investors in the form of dividends. For that reason, rental and leasing stocks are usually sporting dividend yields above average relative to the broader market. As for car rental companies in particular, car-sharing services such as Uber and Lyft are bringing disruption to the transportation industry. Having this in mind, let’s have a look at five rental and leasing companies favored by the hedge funds tracked by Insider Monkey.
At Insider Monkey, we track around 770 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details about our small-cap strategy).
#5. Ehi Car Services Ltd (ADR) (NYSE:EHIC)
– Number of investors with long positions as of March 31: 5
– Aggregate value of investors’ holdings as of March 31: $170.90 Million
There were five hedge funds followed by Insider Monkey with equity investments in Ehi Car Services Ltd (ADR) (NYSE:EHIC) at the end of the March quarter, down from seven recorded at the end of the December quarter. Nonetheless, the aggregate value of those investments rose by 52% year-over-year to $170.90 million even though Ehi’s American Depositary Shares dropped 1% in the first quarter. The five hedge funds invested in Ehi Car Services amassed 20% of the company’s outstanding common stock. The provider of car rentals and car services in China has seen its market value decline by 21% since the beginning of 2016. Ehi Car Services, whose car rentals are offered in 151 cites, 217 train stations and 73 airports across China, recorded net revenues of $223.94 million in 2015, which increased by an impressive 70% year-over-year versus a growth rate of 50% recorded in 2014. The company’s first-quarter net revenues grew by 55.8% year-over-year to $71.4 million. Tiger Global Management, founded by Chase Coleman, owns 8.33 million ADSs of Ehi Car Services Ltd (ADR) (NYSE:EHIC) as of March 31.