Guru David Einhorn (Trades, Portfolio) is a Demarest, New Jersey native who co-founded Greenlight Capital in 1996 after his wife gave him the “green light” to go ahead with his idea to found his own hedge fund.
During the third quarter, Einhorn nearly tripled his position in Amerco (UHAL, Financial) adding 141,313 shares of the company to his portfolio. Since the trade Amerco’s market price has gained an estimated 3%.
Amerco has a market cap of $7.24 billion, a price-earnings (P/E) ratio of 15.65, an enterprise value of $7.22 billion and a price-book (P/B) ratio of 2.75.
Amerco is North America’s largest “do-it-yourself” moving and storage operator through its subsidiary U-Haul International Inc. The company is a Nevada corporation that was founded in 1945 and was later incorporated in 1969.
Amerco generates revenue through its rental services. The company provides rental trucks, trailers, self-storage rooms as well as U-Haul brand boxes, tape and other moving and self-storage products.
Amerco has a network of approximately 1,700 company-operated retail moving stores and approximately 19,500 independent U-Haul dealers.
According to GuruFocus Amerco has a 5 of 10 financial strength rating with a cash-debt ratio of 0.98%, an equity-asset ratio of 0.29%, an interest coverage ratio of 7.81% and an Altman Z-Score of 1.93 indicating the company is in the grey zone, which implies that the company is in some sort of financial stress.
Amerco also has a 7 of 10 profitability and growth rating with an operating margin of 24.82%, a net-margin of 13.67%, a return on equity (ROE) of 19.65%, revenue growth (three years) of 8.40%, and earnings per share (EPS) growth (three years) of 22.50%.
Amerco has three good signs according to GuruFocus, which likely had an impact on Einhorn’s decision to nearly triple his holding.
- The company has shown positive revenue per share growth of 5.70% per year over the previous 10 years.
- The company is expanding its operations which is usually a good sign.
- The company has a three-star predictability rating based on backtesting results. Stocks with a three-star predictability rating produce, on average, an 8.2% yearly return over a 10-year sample size.
Below is a Peter Lynch chart for Amerco.
Disclosure:Â Author does not own any shares of this company.
