Value Investing Congress Presentations: Mick McGuire’s Bullish Thesis On United Rentals

Value Investing Congress presentations: Here at Insider Monkey, we tout United Rentals (NYSE:URI) pretty highly, and for good reason. The stock was our market-beating small-cap strategy‘s No. 1 stock pick for at least four consecutive quarters, and shares of the rental behemoth are up 54.5% over the past twelve months.

The crux of any bullish thesis on United Rentals is founded in the belief that a U.S. economic recovery will continue, particularly in the construction markets. What sets URI apart, though, is the fact that it absolutely dominates the rental equipment industry in a post-recessionary macro environment where consumer spending habits have significantly changed. In layman’s terms, preferences have changed to favor rental equipment over purchasing the actual goods, and one hedge fund manager explained this phenomenon in detail at this week’s Value Investing Congress.

Mick McGuire, manager of Marcato Capital Management, issued a presentation titled “Don’t Buy This Recovery,” with the word buy in italics, thus implying that investors should rent it withURI instead. From valuation analysis to a thorough discussion of United Rentals’ capital structure, this slideshow has it all, and we were particularly blown away by the detailed analysis present in the cyclical trends section. It’s not everyday you see a regression analysis checking for correlation between any stock’s growth statistics and economic data. Very good stuff to give a look at.

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Recommended reading:

VIC 2013: Small-Cap ‘Needles in a Haystack’

VIC 2013: Donald Yacktman Says Apple Isn’t That Cheap

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