Speed Bump for Avis Budget
Under normal circumstances, I would be very happy to have a 10% return in one of my stocks in just five weeks, but that is not the case with shares of Avis Budget Group (CAR). The sharp pullback last week came as quite a surprise to me. Shares had recently risen past the $15 mark, giving me a tidy 30% one-month gain. Presumably investors were increasingly coming to see the benefits that I saw in the recent acquisition of Avis Europe. I still think that's the case, despite a pullback to the $12.50 range.
The selloff is the result of a slightly weak quarter. Sales of $1.63 billion were just shy of the $1.65 billion forecast. Core earnings before interest, taxes, depreciation and amortization (EBITDA) of $64 million were especially weak, considering that analysts had been looking for $85 million. On the conference call, management suggested that investors may have been underestimating the fact that the December quarter is seasonally weak, especially in Europe....349 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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