An upsurge in the stock price of a company indicates high performance and strong growth prospects. These companies are financially strong and provide good returns to investors. In this article, I have picked two such companies from the rental and leasing sector, which provided more than 35% in returns last year to investors. Both companies are large cap companies expanding to increase their market presence. Are these companies capable of providing stable returns into the future?
Expansion with the cost effective method
The company captures 12% market share in the off-airport car rental market, which is an $11 billion market in the U.S. To increase its market share, it is continuously adopting various strategies such as expanding its off-airport presence with cost effective video kiosks at various locations for $10,000 each rather than a brick and mortar locations, which would cost $150,000 each. These kiosks allow customers to interact live with an employee on the video screen. Additionally, it is incorporating its technology of “Hertz Global Holdings, Inc. (NYSE:HTZ) on Demand” in its off-airport segment, which will book a car 24/7 with the help of Internet, which was not previously the case.
Along with the market share upsurge, profit margins will increase from 18.1% in 2012 to 24.6% in 2014. Also, the company’s EPS will increase from $1.36 in 2012 to $1.88 in 2013.
Expansion in Brazil market for additional revenue
Therefore, on July 15 SBA Communications Corporation (NASDAQ:SBAC) entered into an agreement with a Brazilian telecom company Oi SA (ADR) (NYSE:OIBR), and the deal is expected to close by the end of this year. SBA Communications Corporation (NASDAQ:SBAC) will pay $302 million to the Brazilian company, and in return, it will have access to Oi SA (ADR) (NYSE:OIBR)’s 2,113 towers in Brazil. SBA Communications Corporation (NASDAQ:SBAC) funded this agreement with available cash and available credit facility. These towers will contribute $32.2 million of revenue and $67.3 million of cash flows by the end of 2014. In addition, company’s total tower count will reach to 20,000 globally.