Carl Icahn Takes Stake in Hertz Calling Stock 'Undervalued'
According to the SEC filing, Icahn has activist intentions with the company. He also said he believed the company’s shares are “undervalued,” and that he intends “to have discussions with representatives of the Issuer’s management and board of directors relating to shareholder value, accounting issues, operational failures, underperformance relative to its peers and [his] lack of confidence in management.”
The company’s stock price has appreciated about 23% over the past 12 months, landing at $30.33 on Wednesday.
Hertz Global Holdings is a holding company for the consolidated Hertz business, which has been involved in the car and truck rental and leasing business since 1918.
The company on Aug. 12 announced that its quarterly financial statement for the period ended June 30, 2014, which was scheduled for Aug. 11, would be late due to a review of its internal financial records for the fiscal years 2011, 2012 and 2013.
On Aug. 20, Hertz reported to the SEC that its 2014 results would be “well below” its previous guidance. The results were adversely impacted by sizable recalls in the industry, which prevented it from meeting demand, as well as costs associated with its review of its financial records.
For the past five years, Hertz has grown its annual per-share revenue at a rate of 4.9%, EBITDA at a rate of 5.9% and book value at a rate of 5.8%.
The company’s P/E ratio is 40, its P/B ratio is 4.7 and its P/S ratio is 1.2.
Joel Greenblatt (Trades, Portfolio), George Soros (Trades, Portfolio) and Larry Robbins (Trades, Portfolio) also bought the stock or added to their holdings in the second quarter.
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