CAR / Avis

[value]

Hi

Bruce Berkowitz of Fairholme mentioned in last OID about his investments in car rental biz - Avis.

Can anyone following Avis (CAR) tell hows did the company did in past few months - the stock move up from as low as 0.5 to 10!

 

Value

-India

[jjlin]

Hi

Bruce Berkowitz of Fairholme mentioned in last OID about his investments in car rental biz - Avis.

Can anyone following Avis (CAR) tell hows did the company did in past few months - the stock move up from as low as 0.5 to 10!

 

Value

-India

 

Berkowitz was talking about Hertz, not Avis.

[valuecfa]

That's right, it was Hertz. The other company he spoke highly of as his other favorite investment idea in that OID issue was United Rentals. I believe United Rentals is still an outstanding bargain.

 

 

~Long: URI

[value]

Pardon my mistake

But any idea wht happened to warrant such a big turnaround?

 

Thanks

[valuecfa]

People started renting cars again.

 

The company's low share price and bond yields reflected a fear of insolvency, given large debt maturities. The plan was for the company to shrink its fleet to increase free cash flow, to put a dent in near term debt maturities. and to increase utilization rates. Alas, people started renting cars again, as the economy has not gone to hell, and the company has been buying cars at discounts like crazy to meet this unexpected upturn in rental demand. Basically, a much quicker than expected upturn in demand.

[jjlin]

People started renting cars again.

 

The company's low share price and bond yields reflected a fear of insolvency, given large debt maturities. The plan was for the company to shrink its fleet to increase free cash flow, to put a dent in near term debt maturities. and to increase utilization rates. Alas, people started renting cars again, as the economy has not gone to hell, and the company has been buying cars at discounts like crazy to meet this unexpected upturn in rental demand. Basically, a much quicker than expected upturn in demand.

 

Here's the quote from the latest Fairholme letter:

 

 

For sure, it will take a long time to repair the damaged balance sheets of

individuals, corporations and entire nations. Still, we are hopeful that the global

economy is on the mend. One of our canaries in the economic coal mine is Hertz

Global Holdings. In a June 25 interview on CNBC, Hertz CEO Mark Frissora said

“we’ve seen continuous improvement every single week for the last 10 weeks in the

US rent-a-car space on improving demand for the summer season. We’ve been

buying a lot of cars the last eight weeks…. We’re scrambling to buy as many cars

as we can.” Others are beginning to chirp, but are less sanguine.

 

 

You can find the whole letter here:

 

http://www.fairholmefunds.com/2009semi.pdf

 

 

 

 

 

 

 

 

 

 

[Packer16]

The reason the company went up so much is the leverage in these types of business.  Berkowitz's other holding in the rent space is URI.  He has an interesting thesis of large free cash flows being generated from de-fleeting (reduction in fleet size to match demand) and being used to reduce debt.  I think most of his investment is in the debt of these firms as they were yielding high returns.  The common stock of these firms is like a call option on the value of the equipment they lease out.  If you go to the Fairholme site, you can get an OID excerpt which describes his thesis in detail.

 

Packer

[value]

Thank you guys, you are a wonderful source of learning.

 

[nsx5200]

Was just randomly looking at tickers of past holdings and found out that $CAR is currently undergoing a month long short-squeeze:

What's unusual is that until recently it's received very little coverage on the usual social channels (Twitter, Reddit), so not your typical GME MEME squeeze.

 

This is an interesting space since it primarily operates a used car sales business with a car rental business attached to it, the way I understand it.  This is even more so post-pandemic.  Unfortunately I exited this small position long ago while cleaning up my portfolio.  Was wondering if anybody have any interesting stories to tell.  TIA.

[Sweet]

2 hours ago, nsx5200 said:

Was just randomly looking at tickers of past holdings and found out that $CAR is currently undergoing a month long short-squeeze:

What's unusual is that until recently it's received very little coverage on the usual social channels (Twitter, Reddit), so not your typical GME MEME squeeze.

 

This is an interesting space since it primarily operates a used car sales business with a car rental business attached to it, the way I understand it.  This is even more so post-pandemic.  Unfortunately I exited this small position long ago while cleaning up my portfolio.  Was wondering if anybody have any interesting stories to tell.  TIA.

There were a couple of us that looked at it a few years ago in the Tidbits thread.  At the time, at face value it looked cheap and was buying back shares.  When we dug into it, the reason why it was doing so well at the time was the second hand car market prices.  I can’t recall the numbers, but if you assumed the second hand car market prices would return to a pre-covid baseline it didn’t look that hot anymore.  I think Ackman recently took a position - a month ago - citing expectations of second hand car prices to rise again.  That’s probably the reason for the short squeeze.

 

Edited April 19 by Sweet

[whatstheofficerproblem]

Karthik Sharma is a billionaire now. His investment in the name is such a case study.

[Spekulatius]

Meme reversion is the new mean reversion. Why didn’t Bennie G teach us this? Much more profitable than waiting for years to get a puff out of a cigar butt while you could light up firecrackers. 

Edited April 24 by Spekulatius

[brobro777]

This kinda volatility is great, absolutely great and it's gonna continue 

 

More retail from the entire world are trading leveraged ETFs, futures and options, there's gonna be 24 hour trading of everything and they're even removing the PDT rule! 
 

Bring on more action baby! Insufferable value investor funboys can stay mad jelly! Haha yes 

[Spekulatius]

16 minutes ago, brobro777 said:

This kinda volatility is great, absolutely great and it's gonna continue 

 

More retail from the entire world are trading leveraged ETFs, futures and options, there's gonna be 24 hour trading of everything and they're even removing the PDT rule! 
 

Bring on more action baby! Insufferable value investor funboys can stay mad jelly! Haha yes 

If you truly are a value investor, you should love volatility.

[brobro777]

9 minutes ago, Spekulatius said:

If you truly are a value investor, you should love volatility.

whatever makes you feel better! Now is da time is for gamblers like me, trading NQ and ES!(not YM or RTY, never had the same kind of feel for those)
 

it should be much less electric once trump leaves office I think 

[DegenerateGambler]

I shorted CAR from 669 and bought puts on it.  Exited early like I always does at 487 - I wish i held onto them all the way down to sub-200.  My take-profit target was 280 but i paper-handed it.  So i kinda fumbled this trade.

[brobro777]

On 5/2/2026 at 5:56 AM, DegenerateGambler said:

I shorted CAR from 669 and bought puts on it.  Exited early like I always does at 487 - I wish i held onto them all the way down to sub-200.  My take-profit target was 280 but i paper-handed it.  So i kinda fumbled this trade.

that's a hell of a call bro, nice

 

vast majority of other people would have shorted at 300 and get squeezed out at 500, only to bitch "I knew it!" afterwards