Avis Budget Group, Inc.
) achieved a new 52-week high of $41.91 yesterday and eventually
closed trade at $41.71. The average volume of shares traded over
the last 3 months was over 1,510K. Notably, this vehicle rental
company amassed a return of over 99% in the past one year.
Moreover, Avis Budget currently trades at a forward P/E of
15.6x, a 22.0% discount to the industry average of 20.0x.
Additionally, the company's long-term estimated earnings per
share (EPS) growth rate is 13.9%, which is above the industry
average of 12.8%.
We believe that the recent momentum in the stock was mainly
driven by a rebound in leisure and business travels owing to
recovery in the U.S. economy and increased spending by
individuals. Furthermore, while the company is growing due to an
uptick in travel demand, the integration of its Avis Europe and
Apex Car Rentals businesses is progressing well too.
Apart from recent positive industry trends, we believe that
the company's record of beating quarterly earnings expectations
and sustained focus on increasing its global footprint make the
stock an attractive option for investors.
With respect to earnings surprises, this Zacks Rank #3 (Hold)
company has posted positive surprises in 3 of the last 4 quarters
with an average beat of 27.7%.
The company posted improved quarterly results for
third-quarter 2013 with adjusted EPS of $1.48, which was up 1.4%
from the year-ago quarter figure. Results primarily benefited
from volume growth and strong pricing trends in North America,
along with robust performance in the EMEA region. Moreover, Avis
Budget registered a 10.4% year-over-year rise in net revenue.
Moreover, the company remains focused on expanding its
operations through acquisitions and joint ventures. In an effort
to increase its global footprint, Avis Budget is investing in
potential markets with a growing car rental demand. The company's
intention to venture into new avenues was evident from its
acquisition of Zipcar Inc., which enabled Avis Budget to widen
its offerings from car rental to car sharing. We expect such
strategies, along with a better customer support system to boost
the company's top line.
Apart from Avis Budget, companies such as
The Hain Celestial Group, Inc.
) achieved new 52-Week highs of $78.82, $84.31 and $98.06,
respectively, on Jan 15 2014.
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