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Why Terex, VeriFone Systems, and Hertz Global Holdings Jumped Today

By Dan Caplinger - Dec 13, 2016 at 4:13PM

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These stocks led the way higher on another strong market day. Find out why.

After a brief pause yesterday, the stock market returned to its record ways on Tuesday. The Dow came within 100 points of the 20,000 mark, and new record highs for the S&P 500 and Nasdaq Composite helped further the spirit that the market has had ever since early November. Gains for the major market benchmarks were generally in the 0.5% to 1.25% range, but some stocks did much better. Among the best performers were Terex (TEX -1.13%), VeriFone Systems (PAY), and Hertz Global Holdings (HTZG.Q). Below, we'll look more closely at these stocks and tell you why they did so well.

Image source: Terex.

Terex climbs on hopes for positive transformation

Terex rose 9% as it gave its investor day presentation to shareholders and analysts. The crane company set out its strategic plan through 2020, noting its intent to transform itself into a high-performance business with better operational activity and higher return of capital to shareholders. Terex has already made major divestitures in the past year, with overhead cost reductions that have helped enhance its bottom line. Despite challenging global markets, Terex expects to use its expertise in aerial work platforms, cranes, and materials processing to capture an expected global uptick in industrial activity. Terex's guidance for 2017 was mixed, with expected drops in sales in the aerial and crane segments, but investors seemed more favorably inclined toward its expectations for better operating profit growth. If the global economy does recover more strongly, then Terex is in a good position to benefit.

VeriFone overcomes a loss

VeriFone Systems gained 9% despite reporting a loss in its fiscal fourth-quarter financial results Monday afternoon. The payment and commerce solutions specialist suffered a 10% drop in revenue for the quarter, resulting in a net loss of $4.5 million. Yet CEO Paul Galant noted that the results were actually better than VeriFone had expected, and the company did a good job of competing against rivals in Latin America and the Europe, Middle East, and Africa segment. VeriFone also gave guidance for the fiscal first quarter, with expectations of further net losses on a GAAP basis. However, the company gave adjusted earnings guidance of $1.35 to $1.39 per share for the full 2017 fiscal year. That's below the consensus forecast among investors, but it nevertheless seemed to satisfy investors who wanted to see evidence that the company might finally have overcome the worst of a tough environment.

Hertz gets takeover speculation

Finally, Hertz Global Holdings climbed 10%. The rental car company was the subject of a story in the Los Angeles Times that noted that Hertz has turned to a start-up company called Shift to help it sell off its used rental cars once they've been taken out of the rental cycle. Hertz hopes to get better results from selling its cars through Shift than it would get at used-car auctions. Yet even as the rental car giant faces pressure from ride-sharing services, rumors are swirling that Hertz might be the subject of a potential takeover from an investor group possibly led by Carl Icahn. Icahn already has a significant stake in Hertz, and so moving forward would be a natural fit if the activist investor sees potential there. Even with the gains, Hertz trades at just over half where it did as recently as September, which shows how much uncertainty there is among investors.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of Hertz Global Holdings. The Motley Fool recommends Terex. 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.

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Stocks Mentioned

Terex Corporation Stock Quote
Terex Corporation
$34.11 (-1.13%) $0.39
Hertz Global Holdings, Inc. Stock Quote
Hertz Global Holdings, Inc.
VeriFone Systems, Inc. Stock Quote
VeriFone Systems, Inc.

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