With a return to normalcy post-COVID, the prospects for the car rental sector are recovering, and many investors are looking for new investment opportunities. One of the biggest companies in this sector is Hertz, and though up and running again, the pandemic did force it to file for bankruptcy in 2020.
So, is it worth investing in Hertz? This guide will analyze the most important facts about the car rental company and how to buy Hertz stock, as well as provide you with an overview of the best brokers to use.
Intermediate Traders and Investors
What is Hertz?
Notably, Hertz, with 74%, was the second most famous car rental service in the United States in 2022 after Enterprise Rent-A-Car, based on brand awareness.
Regarding the most used car rental provider in 2022, Hertz shares second and third place with Budget, again, right after Enterprise Rent-A-Car.
The two primary sources of revenue for Hertz are the sale of car rentals and the income from contract add-ons such as insurance and premium roadside services. So as soon as the COVID-19 pandemic hit in 2020 and the world entered into lockdown, with fewer people driving and having accidents during the pandemic, Hertz revenues tanked.
Faced with the epic and unprecedented challenges introduced by the COVID-19 pandemic, Hertz filed for Chapter 11 bankruptcy on May 22, 2020, citing a sharp plunge in revenue and future bookings.
In March 2021, Knighthead Capital Management and Certares Opportunities agreed to buy Hertz and take it out of bankruptcy. The investment firms provided Hertz with $5.9 billion, and as of July 1, 2021, the company is no longer insolvent.
Hertz has gone on to thrive since emerging from bankruptcy. For example, as of December 31, 2021, the corporation had revenues of $7.3 billion, up from $5.2 billion. Its net income also recovered, declining from a $1.7 billion loss in 2020 to less than $84 million in 2021.
The car rental company was spending big just four months out of bankruptcy, ordering 100,000 cars from the EV giant Tesla (NASDAQ: TSLA) in a major step to electrify its rental fleet. It also began working with the ride-hailing service Uber to make its fleet available to drivers. What’s more, the company made an agreement with used car online marketplace Carvana (NYSE: CVNA) to sell its excess rental fleet inventory. Partnerships like these as well as surging rental car prices have propelled Hertz’s stock after it surfaced from bankruptcy.
Recommended video: How did Hertz bounce back from bankruptcy?
On July 1, 2021, Hertz emerged from Chapter 11 bankruptcy and started trading over-the-counter (OTC), changing its ticker symbol from HTZGQ to HTZZ.
On November 9, 2021, the company went public again through an initial public offering (IPO), this time on the Nasdaq Global Select Market with the symbol HTZ.
Step-by-step process on how and where to buy Hertz stock
Hertz is a publicly-traded company, which means you can buy HTZ stock through a broker. The steps involved in purchasing shares of Hertz are summarized in the following section in detail.
Step 1: Choose a broker
To buy Hertz stock online, you’ll need a brokerage account. While several platforms are available, the one that suits you will depend on your investment style (long-term buy-and-hold strategy or active day trading) and needs (e.g., whether you want to trade more advanced financial products such as options). When assessing brokers, consider the following features:
- Fees: Brokerage fees are a type of fee collected by brokers to execute your transactions or provide specialized services. Fortunately, today, the vast majority of online brokers offer commission-free stock and exchange-traded funds (ETF) trading;
- Security: Pick a trustworthy broker by ensuring it is fully licensed by state regulatory authorities as well as FINRA and registered with the Securities and Exchange Commission;
- Trading tools: Active traders may prefer brokerage accounts with all the bells and whistles. Some brokers offer fully customizable platforms with comprehensive analysis tools or access to additional data for an extra cost. If such additions are unnecessary for your purposes, avoid paying extra for them. It’s typically a good idea to look for a user-friendly platform with a competitive fee structure if you are new to stock trading. A dedicated section with investing tips and tricks is a bonus;
- Access to market data: You should search for a platform that allows access to solid market research and reporting tools to help you trade confidently with updated data;
- Fractional stock trading: Fractional shares allow investors to buy stock or ETFs by the dollar amount instead of the number of shares; especially helpful for investors who don’t have unlimited capital but want to build a diversified portfolio or are looking to set up a dollar-cost averaging strategy.
Where can I buy Hertz stock?
Thanks to various online brokers, access to the stock market has never been more accessible as well as affordable. However, choosing the right broker optimized for your needs (investing goals, educational tools, trading style) is critical for a stress-free trading experience.
To securely invest in Hertz and buy HTZ stock, consider these brokers:
- Commission-free stock trading;
- 2,000+ stocks from 17 exchanges;
- Fractional shares available;
- User-friendly platform.
Intermediate Traders and Investors
2. Interactive Brokers (IBKR)
- Commission-free stock trading;
- Global stock-trading on 90+ market centers;
- Fractional shares available;
- Extra income on fully paid shares;
- Lowest financing rates for margin accounts in the industry;
- No account minimum.
Low cost investing
Step 2: Fund your account
Once you have decided on a broker, it’s time to fund your account. Remember, it can sometimes take up to three days for the money to reach your account.
Step 3: Research the company
Before buying Hertz stock, it’s essential to investigate the company’s financial health to understand its long-term growth potential. Fortunately, as a publicly traded company, Hertz’s quarterly (form 10-K) earning reports, SEC filings, founders’ letters, product and business updates, as well as recent news releases can be accessed directly from its investor relations section.
After weighing both the expected risks and rewards, decide whether you want HTZ stock as part of your investment portfolio.
Step 4: Decide how much you want to invest
Now that you’ve decided that Hertz stock is the right choice for you, you’ll need to determine how much you want to invest.
The amount of money you invest depends on the stock price and the number of shares you want to buy. If the share price of a stock you’re interested in is financially out of reach, you can also explore fractional shares. Fractional shares allow you to purchase shares on the dollar amount you’re comfortable with, so you may end up with less than a whole share, a whole share, or more than a whole share.
Because investing can have unpredictable returns, it’s essential only to invest what you can afford to lose and to be mindful of your risk appetite.
Step 5: Place your order and buy Hertz stock
Once you decide on the number of shares or the dollar amount you’d like to purchase, you can place your order. If you’re working with an advisor, tell them you’d like to buy Hertz stock and how much you can invest, and they’ll do it for you. If using a brokerage account, simply log in and enter the ticker HTZ in the search bar.
There are a few different execution options to choose from, including:
- Market order: A market order is an order to buy the stock at the current market price that is generally executed immediately (subject to availability);
- Limit order: A limit order is processed once the stock reaches your specified price. For example, imagine you want to buy Hertz
- stock at $20 or lower. You would then set the limit price at $20, and the order will only execute when the stock reaches the set price or lower;
- Options contract: Options speculation allows for leveraged positions in a security at a fraction of the cost of the underlying asset. A call option allows the trader to profit if the price of the stock increases, and a put option enables them to profit if the stock price declines. Remember, derivative instruments can only be traded on a margin account, which typically has higher minimum balance requirements than standard brokerage accounts.
Step 6: Monitor your investment
You want to keep sporadically inspecting the company’s performance by checking the same annual and quarterly reports you used to conduct your preliminary research.
So, while “set it and forget it” is a solid strategy for a diversified portfolio of ETFs, for single stocks like HTZ, investors should keep a close watch on press releases, company health indicators such as revenue and net income, the car rental industry performance (and factors that can disrupt it, e.g., a pandemic) as well as overall economic conditions. Then, depending on your financial goals, use that knowledge to reassess whether it’s best to hold onto the stock or sell it.
You may also want to track the performance of similar stocks in the industry for comparisons, such as Avis Budget Group Inc (NASDAQ: CAR) or Costco Wholesale Corporation (NASDAQ: COST).
Hertz stock price today
Should I buy Hertz stock?
Besides looking at Hertz’s fundamentals, you can use technical analysis to evaluate the company and identify trading opportunities in price trends and patterns seen on charts.
This gauge displays a real-time technical analysis overview for your specified timeframe. It can be a valuable technical analysis tool for many traders by simplifying trading decisions by demonstrating the real-time recommendations of popular technical indicators such as moving averages and oscillators.
Disclaimer: TradingView does not recommend trading financial instruments based exclusively on the advice of the Technical Rating indicator. These recommendations cannot predict future movements and are meant as assistance for spotting potentially favorable buy/sell conditions if this is consistent with their strategy.
Common mistakes to avoid when investing in stocks
Mistakes are expected when investing in stocks but can be avoided if you recognize them. For an in-depth guide on investing mistakes, we have compiled a list of 17 common mistakes and tips for preventing them. But, for now, let’s list some of the most typical ones:
- Not performing your due diligence on the stock;
- Having unclear financial goals;
- Attempting to time the market;
- Failing to diversify;
- Letting your emotions rule the investment decision-making process.
How to sell Hertz stock?
You can sell Hertz stock if you see the company performing differently than expected or after reaching your desired financial goal.
If you’re working with an advisor, they can create a sale order for you. However, if you have your own broker account, simply log on, navigate to the stock’s detail page, input the number of shares or dollar amount you want to offload, and tap sell.
Pros and cons of buying Hertz stock
Before you buy HTZ, take into account both the pros and cons of Hertz’s business:
- Recovery from pandemic devastation: Though COVID-era lockdowns and travel restrictions led Hertz to file for bankruptcy, the business has since bounced back and gone public again;
- A reimagining of the brand: Herty is making a massive push towards electrifying its fleet as the world also moves towards more sustainable options.
- Heavy reliance on the tourism industry: Since two-thirds of the company’s business comes from its airport locations, fewer people traveling due to external factors such as pandemic-imposed restrictions or economic hardships (recession) will have a massive impact on Hertz’s bottom line;
- Fierce competition: Not only does Hertz have to contend with long-term rivals on the car rental side of the competition, but ride-sharing as well as car-sharing services pose another existential threat to its business;
- Recent bankruptcy: Bankruptcies send the message that the underlying business is unfeasible. Since HTZ stock will still face the same competitive pressures in the post-pandemic ecosystem, it’s crucial to ask if anything fundamental has changed. Also, remember that even before COVID-19, the company was struggling with a debt load was $17 billion;
- No dividends: Hertz does not pay dividends to its shareholders.
After more than a hundred years in business, the COVID-19 pandemic saw the car rental behemoth Hertz descend into bankruptcy and its stock delisted from the NYSE. However, new management and partnerships, as well as a move towards green technology, have all aided its recovery. However, another threat looms on the horizon – a recession – and if it comes to fruition, it may crush the company’s revival efforts.
So, as always, remember to do your own independent research and have solid risk management tools in place before entering the market. Ultimately, the goal of investing is to make money over the long term, so investors should focus on where companies will be ten years from now rather than short-term fluctuations in the stock market.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
FAQs about Hertz
What is Hertz?
Hertz is an American car rental company that operates the Hertz, Dollar, Thrifty, and Firefly car rental brands across the Americas, Asia, Europe, the Middle East, Australia, and New Zealand.
How to buy Hertz stock?
Hertz is a publicly-traded company, and its stock is available on the NASDAQ exchange under HTZ, which means you can buy shares of Hertz through your brokerage account.
What happened to Hertz stock?
Faced with unprecedented challenges introduced by the COVID-19 pandemic and as Hertz’s stock price plummeted, the company filed for bankruptcy on May 22, 2020.
Is Hertz a good stock to buy?
Whether Hertz is a good stock to buy or a suitable investment should be based on your risk tolerance, portfolio size, financial goals, and market experience. So always conduct your due diligence before trading. Also, note that past performance doesn’t guarantee future returns.
Where can I buy Hertz stock?
You can buy Hertz stock at various online brokers such as Interactive Brokers (IBKR) and eToro.