Industrials

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.

Consumer Discretionary

Report by MYST Advisors

Trades at a ~5-turn multiple discount to Avis, with limited Sell-side coverage, and very attractive warrants ($13.80 strike price expiring 2051). This is a “classic bankruptcy re-listing” - strong new management team; B/S restructured with minimal debt; and renegotiated contracts on more favourable terms. Given the ongoing rental car shortage and robust industry backdrop, pricing will remain positive for at least another 18 months. HTZ’s recent order with Tesla for 100k EVs also gives it a first-mover advantage into electrification for rentals vs. peers. TP $35 (35% upside).