HTZ - Hertz Global Holdings, Inc.

NYSE - Nasdaq Real Time Price. Currency in USD
1.4250
-0.0250 (-1.72%)
As of 3:25PM EDT. Market open.
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MACD

MACD

Performance Outlook
  • Short Term
    2W - 6W
  • Mid Term
    6W - 9M
  • Long Term
    9M+
Previous Close1.4500
Open1.4900
Bid1.4300 x 27000
Ask1.4400 x 38500
Day's Range1.4000 - 1.4801
52 Week Range0.4000 - 20.8500
Volume6,167,284
Avg. Volume74,040,619
Market Cap202.769M
Beta (5Y Monthly)1.40
PE Ratio (TTM)N/A
EPS (TTM)-2.0300
Earnings DateAug 04, 2020 - Aug 10, 2020
Forward Dividend & YieldN/A (N/A)
Ex-Dividend DateN/A
1y Target Est20.50
Fair Value is the appropriate price for the shares of a company, based on its earnings and growth rate also interpreted as when P/E Ratio = Growth Rate. Estimated return represents the projected annual return you might expect after purchasing shares in the company and holding them over the default time horizon of 5 years, based on the EPS growth rate that we have projected.
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  • There’s No Good Reason for Long-Term Investors to Buy Luckin Stock
    InvestorPlace

    There’s No Good Reason for Long-Term Investors to Buy Luckin Stock

    As of June 29, Beijing-based coffee retailer Luckin Coffee (OTCMKTS:LKNCY) got delisted from the NASDAQ Exchange. Now, Luckin stock is a penny stock that may also be a bankruptcy-candidate.Source: Keitma / Shutterstock.com There has recently been increased day trading interest in shares of potentially bankrupt companies, such as Hertz Global (NYSE:HTZ), JCPenney (OTCMKTS:JCPNQ), and Whiting Petroleum (NYSE:WLL). As a result many analysts are wondering if equity markets have become over-speculative in the post-coronavirus world.It might be time for investors to accept the reality that some companies are bankrupt and their stocks are not worth their hard-earned cash. Although Luckin Coffee has not yet declared bankruptcy, investors may be better off if they look for better companies for their long-term portfolios.InvestorPlace - Stock Market News, Stock Advice & Trading Tips How Luckin Stock Got DelistedThe Xiamen-based company started operations in Oct. 2017. Since its early days, Luckin stock has been touted as the Starbucks (NASDAQ:SBUX) of China. * The 7 Best Stocks to Invest in Right Now In May 2019, the company went public in the U.S. as an American Depositary Receipt (ADR) at an opening price of $25. Luckin Coffee offered 33 million American Depository Shares in its IPO. And it raised $571.2 million through the IPO.In China, listing requirements are in general quite strict and lengthy. Chinese stock exchanges would have required Luckin to have been profitable over the three years prior to the proposed IPO date. In other words, it could have not listed in China. The group possibly initially chose the U.S. due to easier listing requirements for ADRs.The LK share price hit an all-time high of $50.38 on Jan. 17. But the story has changed and gone literally downhill since then. On April 2, management said that it was investigating reports that senior executives and employees fabricated transactions totaling $310 million (or 2.2 billion RMB). It also urged investors to not rely on its previous financial statements for the nine months ended September 30, 2019.As a result, Luckin stock tanked from a closing price of $26.20 on April 1 to an opening price of $4.91 the next morning. Then trading got halted on April 7, when the share price was at $4.39.On April 27, the headquarters of the scandal-hit chain was raided by regulators in China. And the stock started trading again on May 20. In late June, the company notified shareholders of the delisting.Finally, in recent days, shareholders voted out its chairman Charles Lu, who was also a co-founder. However, the issue of trust is likely to linger over Luckin Coffee for a long time to come. It would also mean the company would find it extremely difficult to raise fresh capital, at least in the U.S. Where to Invest for the Love of Coffee in ChinaMany know China as a nation of tea-drinkers. But coffee consumption has also begun to take off in the country. That consumer trend was in part behind the initial interest behind Luckin stock.Are you an investor who would like to take invest in the potentially lucrative market of coffee in a land of 1.4 billion residents? Then you may want to do due diligence on SBUX stock. Starbucks has over 4,300 stores across China.On April 28, the Starbucks chain released Q2 Fiscal 2020 results that said its quarterly global same-store sales fell 10%. Americas and U.S. comparable store sales declined 3%. For the quarter, adjusted earnings per share came at 32 cents. Revenue was $6 billion, a decline of 5% from the prior year due to lost sales related to the viral pandemic.Starbucks management also warned that third-quarter results would take a larger hit from the COVID-19 outbreak, even though sales in China were recovering.Starbucks opened 255 net new stores in the quarter, which means a 6% YoY unit growth. At the end of the period, it had 32,050 stores globally, of which 51% and 49% were company-operated and licensed, respectively.So far in 2020, SBUX stock is down about 15.5%. Long-term investors may consider buying dips on SBUX stock, especially if it goes toward $70 or lower. I regard it as one of the best dividend-paying stocks to buy, especially in a long-term portfolio. The current dividend yield stands at 2.3%. The Bottom Line on Luckin StockFollowing a major revenue fraud, the rather short trading history of Luckin stock in the U.S. seems to have come to a halt. But there are other ways to invest in the growing consumer markets in China.In addition to the Seattle-based coffee chain Starbucks which has established Chinese operations, investors may also consider researching China ETFs. Examples would include the Global X MSCI China Consumer Discretionary ETF (NYSEARCA:CHIQ), the VanEck Vectors ChinaAMC SME-ChiNext ETF (NYSEARCA:CNXT), or the Xtrackers MSCI All China Equity ETF (NYSEARCA:CN).Tezcan Gecgil has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation. As of this writing, Tezcan did not hold a position in any of the aforementioned securities. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * America's 1 Stock Picker Reveals His Next 1,000% Winner * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * Radical New Battery Could Dismantle Oil Markets The post There's No Good Reason for Long-Term Investors to Buy Luckin Stock appeared first on InvestorPlace.

  • 18 Reasons Hertz Thinks You Should Think Twice Before Buying Its Stock
    Motley Fool

    18 Reasons Hertz Thinks You Should Think Twice Before Buying Its Stock

    There's still a huge amount of volume in the car rental company's shares, but investors are being too optimistic.

  • Financial Times

    The leveraging of America: how companies became addicted to debt | Free to read

    At Hertz, the car rental company then known for its pioneering computerised booking system, executives realised that transport companies would inevitably be among the first casualties. Within weeks of the embargo starting, Hertz was selling off the gas guzzlers that made up three-quarters of its fleet, and borrowing heavily to replace them with smaller, more efficient cars. The next year, as an oil price shock ravaged competitors and triggered a bout of “stagflation” as high inflation combined with low growth, Hertz’s revenues and profits hit new records.

  • The Anatomy of a Dip: How to Buy Low in Today's Markets
    GuruFocus.com

    The Anatomy of a Dip: How to Buy Low in Today's Markets

    An analysis of what qualifies as 'buying the dip' after several major modern market changes Continue reading...

  • What we learned – and probably didn't learn – from the Hertz debacle
    Yahoo Finance

    What we learned – and probably didn't learn – from the Hertz debacle

    The crazy Hertz-trading has calmed down and the stock, while volatile, has flattened out just above a dollar. The company is still bankrupt, but here's what we learned about what happened with the benefit of a little hindsight.

  • Influencers with Andy Serwer: Marc Lasry
    Yahoo Finance Video

    Influencers with Andy Serwer: Marc Lasry

    In this week's episode of Influencers, Andy is joined by Avenue Capital Group CEO and Milwaukee Bucks Co-Owner, Marc Lasry, as they discuss the pandemic's impact on the global economy, why he's throwing his support behind Joe Biden, and the return of the NBA.

  • 'It's going to be hard for Trump to win': Billionaire Dem donor
    Yahoo Finance Video

    'It's going to be hard for Trump to win': Billionaire Dem donor

    Avenue Capital Group CEO and legendary investor, Marc Lasry, joins 'Influencers with Andy Serwer' to discuss the 2020 Presidential race.

  • Why Avis and Hertz Stocks Jumped Wednesday
    Motley Fool

    Why Avis and Hertz Stocks Jumped Wednesday

    Shares of Avis Budget Group (NASDAQ: CAR) and bankrupt rival Hertz (NYSE: HTZ) jumped 11% and 8%, respectively, on Wednesday after news that Melvin Capital Management had opened up a position in Avis. Riding alongside the late-afternoon broader market rally, Avis stock jumped double digits after Melvin Capital disclosed a 5.8% stake in the rental company. It's been a common theme among investors and analysts that Avis will benefit from the Hertz bankruptcy once travel and transportation demand returns, assuming the COVID-19 pandemic will eventually be under control.

  • Barrons.com

    Caterpillar Gets an Upgrade, but Another Construction Stock Has Far More Upside

    Investors seemingly have left construction machinery stocks for dead. But there is still some opportunity in construction, according to Wall Street.

  • The coronavirus has given investors a ‘once-in-a-lifetime opportunity,’ says hedge-fund billionaire
    MarketWatch

    The coronavirus has given investors a ‘once-in-a-lifetime opportunity,’ says hedge-fund billionaire

    “You’ve got a lot of companies that are in trouble,” Marc Lasry explained, comparing what we’re seeing now to what happened in the Great Recession in 2008. “It’s a once in a lifetime, but it happened 10 years ago, also,” he added with a chuckle.

  • Is Buying Hertz Stock Right Now Just Crazy Talk?
    Motley Fool

    Is Buying Hertz Stock Right Now Just Crazy Talk?

    It's tough to find a likely bullish case, but that's not stopping some from treating the shares like lottery tickets.

  • COVID-19 recession is a 'once in a lifetime opportunity': Marc Lasry
    Yahoo Finance Video

    COVID-19 recession is a 'once in a lifetime opportunity': Marc Lasry

    Avenue Capital Group CEO and legendary investor, Marc Lasry, joins 'Influencers with Andy Serwer' to discuss the pandemic's impact on the global economy.

  • Why Avis Budget Group Gave Up 29% in the First Half of the Year
    Motley Fool

    Why Avis Budget Group Gave Up 29% in the First Half of the Year

    Shares of Avis Budget Group (NASDAQ: CAR) pulled back through the first six months of the year. The rental car company was one of many travel stocks hammered by the COVID-19 pandemic. Rival Hertz (NYSE: HTZ) was even forced into bankruptcy.

  • 5 Popular Stocks I Wouldn't Buy With Free Money
    Motley Fool

    5 Popular Stocks I Wouldn't Buy With Free Money

    Uncertainty and panic related to the coronavirus disease 2019 (COVID-19) pandemic completely pulled the rug out from beneath the stock market and ultimately sent the benchmark S&P 500 lower by 34% in a mere 33 days. The recently ended quarter featured the best returns for the broad-market indexes since 1998, with the technology-focused Nasdaq Composite galloping to new all-time highs. Right now, there are five exceptionally popular stocks that investors can't seem to get enough of lately that, frankly, I wouldn't buy with free money.

  • Why Investors Should Steer Clear of (Most) Robinhood Stocks
    Motley Fool

    Why Investors Should Steer Clear of (Most) Robinhood Stocks

    There's been lots of volatility on the markets this year since the outbreak of COVID-19, a lot of which has come as a result of more retail investors getting involved in the markets. Robinhood's attracted investors by offering commission-free trades, making it easier to place small bets on stocks. Here's why you should generally avoid stocks that are popular on Robinhood.

  • Why Shares of Avis and Hertz Are Up Today
    Motley Fool

    Why Shares of Avis and Hertz Are Up Today

    Shares of Avis Budget Group (NASDAQ: CAR) soared 29% at the open on Thursday morning after receiving an upgrade from Morgan Stanley. Car sales are holding up better than feared during the pandemic, according to the analyst, and that is good news both for Avis Budget and its bankrupt rival Hertz Global Holdings (NYSE: HTZ). Avis Budget shares gave back some of those gains after the open, but were still up 19% as of 10:30 a.m. EDT.

  • Luckin Stock Faces Delisting — Look Elsewhere to Invest
    InvestorPlace

    Luckin Stock Faces Delisting — Look Elsewhere to Invest

    On June 26th, Luckin Coffee (NASDAQ:LK) tumbled more than 50%. The company withdrew its request to make a case for continuing its listing on the Nasdaq. Luckin stock was pulverized, then suspended for trading on June 29th.Source: Keitma / Shutterstock.com It was not a good ending and certainly not the one that bulls were hoping to see. To be quite frank, I'm not sure what investors were looking for with this name. If they were going to pick over the scraps, they had to know it was pure speculation.To be fair, speculation can be completely fine -- so long as it is done in the right manner.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Speculation vs. InvestingBefore accounting issues were found, Luckin Coffee traded pretty well. Once the news was out though, many investors stepped aside. They have learned -- either the hard way or from others -- that accounting issues equals "no touch," and certainly not "go long." * 9 Florida Stocks to Avoid as Coronavirus Rates Spike We're in strange times, though. Bankruptcy stocks, like Chesapeake Energy (NYSE:CHK) and Hertz (NYSE:HTZ), have caught huge bids off the lows. While the rallies have been unsustained, one can see why some investors thought perhaps LK stock was worth holding.That's the difference between investing and speculating. Buying Hertz, Chesapeake or Luckin was buying into the hope that perhaps the stock would double, triple or become some sort of a multi-bagger.In other words, they are somewhat like call options. Meaning that they have the potential to go up several times the original investment, but they also have the potential -- and depending who you ask, the likelihood -- to go to zero.If done with low enough risk, speculation is fine. Because we have to remember these securities can become worthless and they can do so in the blink of an eye. As a result, risk management is virtually non-existent, with the exception of knowing that investors can wake up in the morning with these shares being worthless. Alternatives to LK Stock Click to EnlargeSource: Chart courtesy of StockCharts.comBack in May, I wrote the following on Luckin Coffee:"If I'm not long Luckin now, there's no way I'm buying this stock. Where there's smoke, there's fire. There's hundreds of quality stocks to own right now and one that just fell 80% on cooked books is not one of them."That's the simple truth, too. Of all of the great companies trading at a discount to where they were trading at the start of the year, why would investors go with a stock that just fell 80% on accounting issues?If coffee and China are the two ingredients one needs in their portfolio, why not consider Starbucks (NASDAQ:SBUX) instead? The company has a solid balance sheet, reputable and dependable management and steady growth.Well, it had steady growth before the novel coronavirus came around. By and large though, investors can count on this company. For starters, it's profitable, free cash flow positive and has sound financials.When it comes to 2020 though, the feeling is mixed. Analysts expect Starbucks to earn 90 cents per share this year. While good that it's expected to generate a profit, that result is down almost 70% vs. 2019's earnings results. The costs related to Covid-19 are building up, as revenue is forecast to fall just 12.5% this year.The U.S. is Starbucks' largest market, followed by China. The company committed to building hundreds of stores per year for several consecutive years in China, as the potential in this country was clear. It's why Luckin stock popped up out of nowhere, only to turn out to be a fraud.Starbucks could have a bumpy second half of 2020, but for the long term, this company will get it done for investors. In recent years, SBUX has made a larger commitment to the dividend and it shows. Shares now yield 2.23%, a generous payout compared to the 64 basis point yield of the 10-year Treasury bond.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long SBUX stock. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * America's 1 Stock Picker Reveals His Next 1,000% Winner * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * Radical New Battery Could Dismantle Oil Markets The post Luckin Stock Faces Delisting a€” Look Elsewhere to Invest appeared first on InvestorPlace.

  • Herc Holdings Announces Second Quarter 2020 Earnings Call and Webcast Date
    Business Wire

    Herc Holdings Announces Second Quarter 2020 Earnings Call and Webcast Date

    Herc Holdings Inc. (NYSE: HRI) will host its second quarter and first half 2020 earnings call and webcast on Thursday, July 23, 2020, at 8:30 a.m. U.S. Eastern Time. The Company plans to issue a press release with the financial results on the same day prior to the call.

  • What's Up With Hertz Stock Today?
    Motley Fool

    What's Up With Hertz Stock Today?

    Here are the recent developments surrounding Hertz's wild bankruptcy, including today's stock-price bump.

  • Hertz, Creditors in $11 Billion Standoff Over 494,000 Used Cars
    Bloomberg

    Hertz, Creditors in $11 Billion Standoff Over 494,000 Used Cars

    (Bloomberg) -- Bankrupt Hertz Global Holdings Inc. and its bondholders are squaring off over how to shrink its nearly half-a-million vehicle fleet. Market watchers say the outcome could upend the multi-billion dollar lease-backed ABS industry.The cars are housed in an entity linked to Hertz’s asset-backed securities and leased to the rental giant. Normally, when a company with ABS files for bankruptcy, it must choose to confirm or reject the entire master lease tied to the debt. If it keeps the lease, it has to continue making payments on the vehicles as it offloads them piecemeal. If it walks away, all of the collateral is liquidated to pay back bondholders.Hertz wants a judge to allow it to convert the master lease into 494,000 separate agreements so it can reject the terms on 144,000 vehicles. That would allow Hertz to save roughly $80 million a month while it hangs onto the remainder of the cars as it seeks to emerge from bankruptcy a viable company. If the motion fails, Hertz may press for a reduction in payments to creditors, according to people familiar with the matter.The standoff raises the stakes in what is already 2020’s largest corporate bankruptcy. Hertz is seeking to avoid liquidation and strengthen its balance sheet via the restructuring, while bondholders with billions of dollars at risk who’d grown confident of their chances of being paid back are now threatened with losses. Moreover, industry insiders worry that if Hertz is successful in court, it would re-define the rules that have long governed the ABS market.“It’s going to be a real showdown,” said Philip Brendel, analyst with Bloomberg Intelligence. “Hertz is taking an aggressive posture, but if it rejects the master lease, it doesn’t have a fleet and this bankruptcy looks more like a liquidation.”Hertz almost certainly doesn’t want that to happen.Yet neither do its ABS creditors. For them, the best bet for maximizing the recovery on roughly $11 billion of bonds would be to have Hertz make lease payments on all the vehicles while it sells them gradually, using its industry connections to command top dollar.With that kind of leverage, Hertz may try to extend a 60-day postponement on its lease payments due to expire later this month. The company may also press bondholders to accept less going forward, said three of the people familiar with the matter who asked not to be identified discussing private negotiations.Still, bondholders may not be willing to give in so easily. A resurgent used-car market has strengthened their hand in recent months, making the threat of Hertz rejecting the master lease in its entirety less ominous. Used-vehicle prices in the first 15 days of June were up 6.6% over May and 4.4% above the same period in 2019, according to Manheim, the nation’s largest used-car auction.Hertz didn’t respond to a request seeking comment.ABS RiskBoth sides are now waiting to see what happens with Hertz’s court motion. A decision could come as soon as July 6.So are ABS industry experts, who say that if Hertz is allowed to reject some leases but not others, it could undermine the $25 billion market for rental-car related ABS, as well those for farm-equipment and construction-machinery financing, by making the bonds riskier. That could raise funding costs for borrowers and ultimately consumers, representatives for the Structured Finance Association argued in a proposed brief filed last week.“Granting Hertz’s motion would disrupt access to the capital markets for entire industries that depend on favorable financing terms provided via ABS structures -- and thus the national economy,” the group wrote.When credit graders and investors assess the risks of an ABS, they typically do so under the assumption that leases tied to all of the cars backing their bonds would be accepted or rejected during a bankruptcy.If Hertz is allowed to selectively reject leases, it effectively leaves bondholders with a different pool of collateral than they were expecting when they bought the securities. That could hamper their ability to be made whole by selling the cars backing the bonds, the thinking goes.“They have manufactured an assault on the securitization structure from which they raised tens of billions of dollars effectively secured by the master lease, in an effort to shift to the ABS lenders the hundreds of millions of dollars, or more, of economic cost from the depreciation on the vehicles,” lawyers representing ABS participants said in court papers.Hertz has dismissed the arguments about upending the structured-finance market as speculative and irrelevant, as have first and second-lien creditor groups.Thanks to the recovery in used-vehicle prices, many Hertz ABS investors have grown more confident they’ll get a full recovery on their bonds. Slices of ABS have rallied since the company filed for bankruptcy in May, with the portions of the securities that are first in line for repayment now trading near par. Junk-rated C slices of many Hertz deals, which are further back in line for repayment, have rallied 10 points or more since May to trade around 90 cents on the dollar.“This is gamesmanship,” Bloomberg Intelligence’s Brendel said. “It will be a constant negotiation. If the judge rules against Hertz, the company will say, ‘you took away my sword, now I’ll take out my club.’”The case is Hertz Corp. 20-11218, U.S. Bankruptcy Court, District of Delaware (Wilmington)(Updates to include additional markets affected in first and 12th paragraphs)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Barrons.com

    The Stock Market Is Set for One of Its Best Quarters in Decades. Time to Prepare for the Worst.

    Two veteran Wall Street strategists favor using options hedges to tamp down risk as a blockbuster quarter draws to a close. Through Monday, the S&P 500 index had recovered 36% from its March 23 lows

  • Coronavirus update: Global COVID-19 case tally tops 10 million and Florida, South Carolina and Nevada set daily records
    MarketWatch

    Coronavirus update: Global COVID-19 case tally tops 10 million and Florida, South Carolina and Nevada set daily records

    The number of confirmed cases of the coronavirus illness COVID-19 topped 10 million around the world and the death toll surpassed a half million over the weekend, and Florida, South Carolina and Nevada all recorded their highest number of new infections in a single day.

  • Stocks Set Adrift After Losing Propellers and Anchors
    Bloomberg

    Stocks Set Adrift After Losing Propellers and Anchors

    (Bloomberg Opinion) -- Another volatile week in the U.S. equity market highlighted an inconvenient reality that investors have not yet fully grasped: Stocks now lack not just upward drivers but also anchors to maintain what has been an astonishing disconnect between elevated prices and challenged economic and corporate realities.The market has seemingly exhausted three potent drivers of returns — policy support, fundamentals and retail inflows — and investors are left searching for a new fuel for a market that is now missing not just momentum but also a stabilizer. Their hope is that the Federal Reserve will come to the rescue again with a new round of policy support. This “Fed put” has proved to be highly effective in the past in repressing volatility, enticing more risk-taking and attracting additional investment funds. The risk is that the central bank feels more compelled to wait for further signs of market stress before extending an already stretched, if not overstretched, policy response.A down week for the S&P 500 Index, which dropped 3%, has now taken returns for June into negative territory and exposed investors to considerable daily volatility. Dispersion among the top indexes remains evident, especially with the exhaustion of the rotation trade that for a short time favored many “reopening” stocks, especially those that had lagged badly. Consequently, the Nasdaq composite index is still up 3% for the month while the Dow Jones Industrial Average is down 1%. That divergence has produced a 9% gain for the Nasdaq so far this year but an 11% loss for the Dow and a 6% drop for the S&P 500.Behind these numbers are drivers — mostly sequential but also overlapping at times — that impressively pulled the main indexes from their lows on March 23 but started to run out of steam after June 8, when the Nasdaq hit a record and the S&P 500 briefly turned positive for 2020. Since then, the S&P 500 has lost 7%, the Dow 9% and the Nasdaq 2%. The first surge after March 23 was essentially led by extraordinary fiscal and monetary policy interventions, including previously unthinkable cash handouts and a remarkable expansion in the scale and scope of the Fed’s direct involvement in market pricing and functioning. While the vast majority of stocks benefited, the outperformance was concentrated among the “stay-at-home” companies, including Big Tech, which obviously favored Nasdaq.The second phase was led by corporate and economic fundamentals. High-frequency indicators of economic activity and associated corporate revenue generation shot up, turbocharging heavily downtrodden stocks such as airlines and, yes, even Hertz, the car-rental company in the midst of bankruptcy proceedings.  The third and final phase was more technical. It was dominated by the greater involvement of retail investors, accentuated by the fear-of-missing-out (FOMO) influence that has been present awhile among institutional investors who had recently become more cautious.All three drivers now seem less effective and are, in the process, also robbing the stock market of anchors.A shockingly good jobs report for May diminished the urgency for more fiscal policy actions. Not only did it lead to a more divided Congress on what to do next, but it also risks the elimination of important household and corporate relief payments in the next few weeks. The Fed remains more worried about the outlook, but the astounding scale and scope of its previous interventions have come under growing criticism. In particular, there are concerns that by venturing into buying junk bonds, the segment of the credit market with high default risk, it has encouraged huge corporate debt issuance and even more excessive risk-taking by creditors and investors.Regarding fundamentals, the process of healthy reopenings has run into problems in a growing number of states, including Arizona, California, Florida, South Carolina and Texas. With both a record surge in cases and hospitalizations increasing, some local and state governments have opted in the last few days to halt and reverse reopenings. And even before that, the highest-frequency partial indicators of economic activity suggested that certain households were already pulling back from physical economic interactions. On the corporate side, Apple announced it was reclosing certain stores.All this has dampened the enthusiasm of retail investors who were instrumental in fueling the rotation into lagging stocks. With that, market outperformance reverted in the last couple of weeks to the narrower theme of “stay-at-home” stocks — and even that is likely to become even narrower as a growing segment of corporate America announces that it is suspending advertising on social media sites.Absent a new catalyst, markets that now lack both drivers and anchors are likely to languish in volatile and downward-trending trading. And with fundamentals unlikely to improve anytime soon given the spillovers between Covid-19 and the economy, investors will have to pin their hopes again on policies and, in particular, the reactivation of the Fed put. But with elevated asset prices already so disconnected from fundamentals, and with the divergence between Wall Street and Main Street attracting greater political and social attention and concern, it could well turn out that the Fed put is more out of the money than many investors assume.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Mohamed A. El-Erian is a Bloomberg Opinion columnist. He is the chief economic adviser at Allianz SE, the parent company of Pimco, where he served as CEO and co-CIO. He is president-elect of Queens' College, Cambridge, senior adviser at Gramercy and professor of practice at Wharton. His books include "The Only Game in Town" and "When Markets Collide." For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Bankruptcy Makes Trading Hertz Stock a Pure Gamble
    InvestorPlace

    Bankruptcy Makes Trading Hertz Stock a Pure Gamble

    Estero, Florida-based vehicle rental company Hertz Global (NYSE:HTZ) is in the middle of bankruptcy proceedings. Hertz stock is currently hovering at $1.25, down from the $16-level of January 2020.Source: Eric Glenn/Shutterstock.com Analysts are wondering if markets have become over-speculative in the post-coronavirus world. The debate in part centers around the increased day trading activity in the shares of companies, such as Hertz, that are in effect bankrupt.Robintrack, which monitors interest in stocks held by Robinhood brokerage customers, has shown a surge in ownership in the stock in recent days. Therefore today, I'll take a closer look at the group and discuss whether the shares should belong in a long-term portfolio. At this point, it is important to remember that Hertz stock is unlikely to recover in the coming months.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Covid-19 Claims Corporate VictimsAccording to research by Meghan Busse and Jeroen Swinkels of Kellogg School of Management, Northwestern University, "The American car rental industry was born on August 20, 1916, when Josiah Ellis "Joe" Saunders, an entrepreneur living in Omaha, Nebraska, ran a seven-line classified ad offering "Automobiles for Hire." Saunders's fleet consisted of one vehicle--a Model T Ford--that he rented for ten cents per mile." * 10 Consumer Stocks to Buy to Ride the Post-Covid-19 Wave The car rental industry has experienced difficult downturns following the events of 9/11 as well as during the global financial crisis. But the coronavirus-lockdown and the ensuing economic contraction have become a major worldwide challenge for vehicle rental companies. The industry relies heavily on air travel as many customers rent vehicles at airports. As the level of business and leisure travel fell abruptly, so did car rentals.Thus Hertz Global has become one of the victims of the coronavirus economic difficulties. The 102-year-old group operates Hertz, Dollar and Thrifty vehicle rental brands in approximately 10,200 corporate and franchisee locations around the world. Initially management announced temporary closures of almost 600 locations.However, those measures were not enough and Hertz had to file for Chapter 11 bankruptcy proceedings in the second half of May. Chapter 11 will allow Hertz to operate while working out a plan to repay creditors. Its international operating regions including Europe, Australia and New Zealand were not included in those U.S. Chapter 11 proceedings.Veronique de Rugy and Todd Zywicki of George Mason University conclude that the current difficult environment "is driving debt-laden companies such as … Hertz into bankruptcy." As of the end of March, Hertz Global's debt burden had gone over $18 billion. In return, the group had only $1 billion of available cash. Bankruptcy Does Not Favor Investors in Hertz StockThe uncertain environment faced by car rental companies is highlighted by yet another recent Chapter 11 filing. In late May, Advantage Rent A Car, a former subsidiary of Hertz also went bankrupt.The U.S. Securities and Exchange Commission (SEC) clarifies what happens when a public company files for protection under the federal bankruptcy laws. It says "Bankruptcy laws determine the order of payment… Stockholders - owners of the company, have the last claim on assets and may not receive anything if the Secured and Unsecured Creditors' claims are not fully repaid."In other words, in the coming months, current investors in Hertz stock are unlikely to be left with any shareholder value.Prior to the bankruptcy announcement, Hertz stock was shy of $3. The next day, it was down to an intraday low of 40 cents, as would be expected.Yet the past month has seen some rather unusual trading activity in the shares. For example, on June 8, HTZ stock hit an intraday-high of $6.25. But as I write, it is around $1.25.InvestorPlace readers may remember that billionaire investor Carl Icahn used to be the largest shareholder in Hertz stock. On May 25, he sold his holdings, which represented a 39% stake in the car rental group, at an average per-share price of 72 cents.I cannot help but wonder why speculators are now coming to a Hertz stock when a professional like Icahn has decided to get out of it completely. After all, he lost close to $2 billion in his overall investment in the shares.Yet this kind of speculation around the recent bankrupt names has become somewhat of a weekly norm. Other names that day traders flock to include JCPenney (OTCMKTS:JCPNQ) and Whiting Petroleum (NYSE:WLL). The Bottom Line on Hertz StockInvesting in bankrupt names like Hertz stock in effect means wagering against a legal process that wipes out shareholders. For seasoned market participants, that would not be investing, but sheer reckless speculation. If you decide to play that daily game, it is important to appreciate the risks involved fully.Market participants see price spikes in any one of these bankrupt names quite regularly. However, long-term investors would be best served if they did not include any of them in their portfolios. If you are a rather risk-averse investor who wants to invest for the long run, broader markets offer plenty of solid companies.Tezcan Gecgil has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education, including a Ph.D. degree, in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation. As of this writing, Tezcan Gecgil did not hold a position in any of the aforementioned securities. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * America's 1 Stock Picker Reveals His Next 1,000% Winner * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * Radical New Battery Could Dismantle Oil Markets The post Bankruptcy Makes Trading Hertz Stock a Pure Gamble appeared first on InvestorPlace.