Herc Holdings (HRI) Fell on Unconvincing 2025 Guidance

Loomis Sayles, an investment management company, released its “Small Cap Value Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The first quarter of 2025 saw negative returns for US equity markets, with large-cap indices outperforming small caps. Value stocks were stronger than growth stocks, driven by strong performance in financials and real estate, while growth sectors struggled. In the first quarter, the fund returned 0.16%, outperforming the Russell 2000 Value Index’s -1.06% return. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Loomis Sayles Small Cap Value Fund highlighted stocks such as Herc Holdings Inc. (NYSE:HRI). Herc Holdings Inc. (NYSE:HRI) is a US-based rental equipment supplier. The one-month return of Herc Holdings Inc. (NYSE:HRI) was -9.93%, and its shares lost 8.58% of their value over the last 52 weeks. On June 11, 2025, Herc Holdings Inc. (NYSE:HRI) stock closed at $121.19 per share, with a market capitalization of $3.867 billion.

Loomis Sayles Small Cap Value Fund stated the following regarding Herc Holdings Inc. (NYSE:HRI) in its Q1 2025 investor letter:

“Herc Holdings Inc. (NYSE:HRI) is the third largest equipment rental supplier in North America, specializing in industrial products such as aerial platforms, earth moving equipment, and tele-handlers. The stock price finished 2024 on a strong note, and the position was reduced in early December on price strength and valuation. Fourth quarter 2024 earnings, reported in mid February, were solid, but the outlook provided for 2025 indicated strength from various large US infrastructure projects was being partially offset by weaker trends in certain local markets. Shortly thereafter, Herc revealed a proposal to acquire H&E Equipment Services, the number five equipment rental company in the US and effectively outbidding a competitor which had previously struck a deal to merge with H&E. While the strategic merits of the acquisition make sense, the deal placed further pressure on Herc shares upon the announcement.”

Is Herc Holdings Inc. (HRI) Among Billionaire Mario Gabelli’s Top Stock Picks?

An overhead shot of a ProSolutions employee in the process of delivering equipment to a construction site.

 Herc Holdings Inc. (NYSE:HRI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 33 hedge fund portfolios held Herc Holdings Inc. (NYSE:HRI) at the end of the first quarter, which was 32 in the previous quarter. While we acknowledge the potential of Herc Holdings Inc. (NYSE:HRI) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered Herc Holdings Inc. (NYSE:HRI) and shared billionaire Mario Gabelli’s small-cap stock picks with huge upside potential. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.