Report by Vision Research
Vision initiated a short on CAR to clients on 10th Jan 2023 focused on peaking rental rates and used car values as fleets returned to pre-pandemic levels and promotions increased. Vision expected depreciation to rise, gain on sale of used vehicles to abate and rising debt per vehicle to raise interest expense. The short was closed on 16th Feb 2024, generating alpha of 61.2% as the shares declined (31.2%) while the S&P 500 rose 30.0%. At the time of the initiation, ADV was >$150m and there was no cost to borrow the shares.
Vision uses fundamental analysis to identify structurally challenged companies. They currently have 16 active US shorts, 13 active European shorts and 8 active APAC shorts.