Hertz Global Holdings (Hertz Global Holdings) Predictability Rank

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What is Hertz Global Holdings Predictability Rank?

Warren Buffett said many times that the companies he likes are:

1. Simple businesses that he understands
2. that have predictable and proven earnings and
3. with economic moat
4. those can be bought at a reasonable price.

It is hard to quantify "simple businesses that he (Buffett) understands", so we will focus on the other three characteristics instead. In GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank, we will show that the businesses that have predictable and proven earnings are usually also simple businesses that an average person could understand.

GuruFocus conducted a back test study of Warren Buffett's strategy of "buying good companies at fair prices" for the years from 1998-2008.

Hertz Global Holdings Predictability Rank Calculation

In our database there are 2403 stocks that have been traded from Jan. 2, 1998 to Aug. 31, 2008. We have the complete 10-year financial data and trading prices of these companies for this period. We rank the predictability of these companies based on the consistency of their revenue per share and EBITDA (earning before interest, tax, depreciation and amortization) per share over the past ten fiscal years, and study the correlation between the stock performances and the predictability of the business.

Our study may be subject to these biases and assumptions:

Dividend yields are not counted for investment returns
Effects of price changes due to spin-offs may not be fully adjusted
Study is subjected to survivorship bias due to de-listing, bankruptcy, LBO, M&A, etc.

The correlation between business predictability and investment returns of a company is showed below.

Correlation Between Business Predictability and Investment Returns

	Predictables	Non-Predictable	All stocks
Total Number of stocks	570	1833	2403
Total Lost Money	61	830	891
Total Lost More Than 50%	18	412	430
Total Lost More Than 90%	4	86	90
Average Gain	260.6%	100.0%	138.1%
Median Gain	150.0%	13.0%	39.0%
Maximum Gain	2852.0%	11483.0%	11483.0%
Maximum Loss	-100.0%	-100.0%	-100.0%
Annualized Average Gain	12.7%	6.7%	8.4%
Annualized Median Gain	8.9%	1.1%	3.1%

For the 570 predictable companies, we have seen strong correlation between the predictability of businesses and the stock performances over the past 10 years, regardless of the valuation of business at 1998. Accordingly, we have ranked the business predictability from 5-star to 1-star, as shown in this table.

Predictability Rank	5-Star	4.5-Star	4-Star	3.5-Star	3-Star	2.5-Star	2-Star	1-Star (non-predictable)	Average among all
% Out of All 2403 Stocks	3.3%	2.9%	3.7%	3.3%	3.3%	3.7%	3.3%	76.3%	100%
% that are in Loss (10y)	3%	10%	8%	9%	11%	18%	16%	45%	37%
Average Gain (10y)	364.6%	330.9%	278.0%	235.1%	243.5%	227.8%	154.8%	100.0%	138.1%
Median Gain (10y)	238.5%	193.5%	171.0%	159.0%	132.5%	113.5%	87.0%	13.0%	39.0%
Maximum Gainer	2228.0%	2547.0%	2452.0%	2852.0%	2432.0%	1892.0%	1807.0%	11483.0%	11483.0%
Maximum Loser	-82.0%	-53.0%	-67.0%	-100.0%	-83.0%	-100.0%	-78.0%	-100.0%	-100.0%
Annualized Average Gain	15.4%	14.6%	13.2%	12.0%	12.2%	11.7%	9.1%	6.7%	8.4%
Annualized Median Gain	12.1%	10.6%	9.8%	9.3%	8.2%	7.3%	6.0%	1.1%	3.1%

For detailed information about each predictability rank, please go to GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank

Hertz Global Holdings Predictability Rank Related Terms

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Hertz Global Holdings (Hertz Global Holdings) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Business Services » Hertz Global Holdings Inc (OTCPK:HTZGQ) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

HTZWW:USA HTZ:USA HTZ1:Mexico AZK0:Germany

Address

8501 Williams Road, Estero, FL, USA, 33928

Website

https://www.hertz.com

Hertz Global Holdings Inc operates an automotive vehicle rental service through the Hertz, Dollar, Thrifty, and Firefly brands. The company offers cars, crossovers, and light trucks for rent; ancillary products and services; rental of industrial, construction, and material handling equipment; and fleet-leasing and fleet-management services. The company operates a network of car rental locations and licenses its brands to associates and franchisees.

Executives

Daniel A Ninivaggi	director	C/O ICAHN ENTERPRISES L.P., 767 FIFTH AVENUE, SUITE 4600, NEW YORK NY 10153
Henry R. Keizer	director	MONTPELIER HOUSE, 94 PITTS BAY ROAD, PEMBROKE D0 HM 08
Sunghwan Cho	director	C/O ICAHN ENTERPRISES L.P., 16690 COLLINS AVE., PH, SUNNY ISLES FL 33160
Darren Richard Arrington	officer: EVP Revenue Management & Fleet	8501 WILLIAMS ROAD, ESTERO FL 33928
Kenny K Cheung	officer: EVP Chief Operational Finance	HERTZ GLOBAL HOLDINGS, INC., 8501 WILLIAMS ROAD, ESTERO FL 33928
Frederic Deschamps	officer: EVP Revenue Management	8501 WILLIAMS ROAD, ESTERO FL 33928
David A Barnes	director	55 GLENLAKE PARKWAY NE, ATLANTA GA 30328
Vincent J Intrieri	director	C/O ICAHN ENTERPRISES L.P., 16690 COLLINS AVE., PH, SUNNY ISLES FL 33160
Laura Suenon-nestar	officer: EVP Global Marketing and Custo	8501 WILLIAMS ROAD, ESTERO FL 33928
Opal Perry	officer: EVP Chief Information Officer	HERTZ GLOBAL HOLDINGS, INC., ESTERO FL 33928
Jodi J Allen	officer: EVP Chief Marketing Officer	8501 WILLIAMS ROAD, ESTERO FL 33928
Jamere Jackson	officer: EVP Chief Financial Officer	C/O NIELSEN 85 BROAD ST., NEW YORK NY 10004
Richard Eric Esper	officer: SVP Chief Accounting Officer	8501 WILLIAMS ROAD, ESTERO FL 33928
David Galainena	officer: EVP General Counsel and Secret	HERTZ GLOBAL HOLDINGS, INC., 8501 WILLIAMS ROAD, ESTERO FL 33928
Icahn Partners Master Fund Lp	10 percent owner	16690 COLLINS AVE., PH, SUNNY ISLES FL 33160