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Wall Street Suggests Reducing These Holdings

Over the one-year, three-year and five-year periods, the following companies have underperformed the U.S. market, as represented by the S&P 500 benchmark. They don't pay dividends, and Wall Street sell-side analysts recommend a moderate selling rating for both stocks.

Therefore, shareholders might consider reducing their holdings in AutoNation Inc (NYSE:AN) and Avis Budget Group Inc (NASDAQ:CAR).


AutoNation

Shares of the Fort Lauderdale, Florida-based automotive retailer have dropped 22% in the past year, 42.2% over the past three years and 58% over the past five years through March 20. The stock has underperformed the S&P 500 by 8%, 43.3%, and 72.3%, respectively.

AutoNation Inc does not pay dividends and has no plans to start doing so any time soon.

Year to date, the share price is down 46% to $26.50 at close on March 20 for a market capitalization of $2.37 billion.

The 14-day relative strength index of 27 suggests the stock trespassed oversold levels.

Avis Budget Group

Shares of the Parsippany, New Jersey car and truck rental and leasing services company have dropped by 67% in the past year, 68.2% in the past three years and 81% in the past five years through March 20, underperforming the S&P 500 by 53%, 69.3% and 95.3%, respectively.

The company stopped paying dividends 14 years ago. As of today, it doesn't seem the company intends to resume the payment.

The share price has decreased 66% so far this year to close at $10.98 on March 20, determining a market capitalization of $816.44 million.

The 14-day relative strength index of 28 suggests the stock trespassed oversold levels.

Disclosure: I have no positions in any securities mentioned.

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This article first appeared on GuruFocus.