Why Shares of Avis Budget Group Stock Accelerated Last Week

A press release from Avis Budget Group jumpstarted the momentum.

Mar 24, 2014 at 11:30AM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

Last week, shares of car rental company Avis Budget Group (NASDAQ:CAR) were driven in the fast lane by over 8% following a press release on Monday, March 17 unveiling its latest initiative to get customers into their cars more quickly.

So what?
Avis Budget is now offering an "Express Lane" option for customers who pay in advance on either the Avis.com or Budget.com websites. It is expected that these customers can both check out more quickly when they return their vehicles and also get into their vehicles faster when they first rent them.

Avis Budget Group claims this will save customers both time and money. The company has made enhancements to its websites and mobile applications to help drive more traffic and improve the user experience.

Now what?
This wasn't exactly the biggest blockbuster news of the decade, but it was apparently enough to spark momentum. The press release came out at 11am, and the stock took off from there almost immediately and continued most of the week.

Avis Budget Group stock has been trading at new all-time highs since posting better-than-expected fourth quarter results a month ago that beat analyst expectations by 25% with $0.15 per share compared to the $0.12 estimate. It would seem the market was looking for any excuse to continue the rally, and it got it with the most recent development.

It certainly isn't bad news. Avis Budget is currently offering this service to 100 locations, and it's reasonable to speculate that this number will increase in the future. This will give the company a competitive advantage especially among business people who are on a time crunch as well as people renting cars at airports. One of the worst things that can happen is a delay at the rental facility causing you to end up late for your meeting or worse missing your flight. This alleviates the risk.

With Avis Budget trading at 18 times 2014 analyst estimated earnings and 14 times 2015 estimated earnings, Fools may want to take a closer look at the company. As long as the economy holds up and continues to support the need for car rentals, Avis Budget may represent a compelling growth and value story.

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Nickey Friedman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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