May 23, 2024
Top 10 Stock Herc Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Herc – Top 10 Stock in Dividend Champions United States
Herc is listed as a top 10 stock on May 23, 2024 in the market index Dividends USA because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low. Based on the Obermatt 360° View of 100 (top 100% performer), Obermatt assesses an overall strong buy recommendation for Herc on May 23, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Trading & Distribution |
| Index | Dividends USA, Low Waste, Recycling |
| Size class | Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Herc Strong Buy
| 360 METRICS | May 23, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 92 |
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| GROWTH | ||||||||
| GROWTH | 97 |
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| SAFETY | ||||||||
| SAFETY | 14 |
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| SENTIMENT | ||||||||
| SENTIMENT | 79 |
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| 360° VIEW | ||||||||
| 360° VIEW | 100 |
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ANALYSIS: With an Obermatt 360° View of 100 (better than 100% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Herc are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Herc. The consolidated Value Rank has an attractive rank of 92, which means that the share price of Herc is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 92% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 97, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 79. But the company’s financing is risky with a Safety rank of 14. This means 86% of comparable companies have a safer financing structure than Herc. ...read more
RECOMMENDATION: With a consolidated 360° View of 100, Herc is better positioned than 100% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 92), above-average growth (Growth Rank of 97), and positive market sentiment in the professional investor community (Sentiment Rank of 79), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 14), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Herc is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Herc very positive
ANALYSIS: With an Obermatt Sentiment Rank of 79 (better than 79% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Herc is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Herc. Analyst Opinions are at a rank of 38 (worse than 62% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 83, which means that stock research experts are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in Herc. More encouragingly, the Professional Investors rank is 98, which means that professional investors hold more stock in this company than in 98% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 47, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 53% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 79 (more positive than 79% compared with investment alternatives), Herc has a reputation among professional investors that is significantly higher than that of its competitors. The sentiment signals are mixed for Herc. While analysts and the news channels are negative, there is a change in what analysts think. Above-average institutional investors in this company support them. Sentiment signals remain mixed with analysts and news channels pessimistic, though improving, and professional investors above average. ...read more
Value Strategy: Herc Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 92 (better than 92% compared with alternatives) for 2024, Herc shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Herc. Price-to-Sales is 57 which means that the stock price compared with what market professionals expect for future sales is lower than for 57% of comparable companies, indicating a good value for Herc's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 89% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 55. Compared with other companies in the same industry, dividend yields of Herc are expected to be higher than for 82% of all competitors (a Dividend Yield rank of 82). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 92, is a buy recommendation based on Herc's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Herc based on its detailed value metrics.
Growth Strategy: Herc Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 97 (better than 97% compared with alternatives) for 2024, Herc shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all four indicators above average for Herc. Sales Growth has a value of 60, which means that, currently, professionals expect the company to grow more than 60% of its competitors. The same is valid for Profit Growth with a value of 79 and for Capital Growth with 96. In addition, Stock Returns had an above-average rank value of 78, which means they have been higher than 78% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 97, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Herc exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. ...read more
Safety Strategy: Herc Debt Financing Safety risky
| SAFETY METRICS | May 23, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 9 |
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| REFINANCING | ||||||||
| REFINANCING | 39 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 40 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 14 |
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ANALYSIS: With an Obermatt Safety Rank of 14 (better than 14% compared with alternatives), the company Herc has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Herc is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for Herc. Liquidity is at 40, meaning that the company generates less profit to service its debt than 60% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 9, meaning the company has an above-average debt-to-equity ratio. It has more debt than 91% of its competitors. Finally, Refinancing is at a rank of 39 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 61% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 14 (worse than 86% compared with alternatives), Herc has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.
Combined financial peformance: Herc Top Financial Performance
| COMBINED PERFORMANCE | May 23, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 92 |
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| GROWTH | ||||||||
| GROWTH | 97 |
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| SAFETY | ||||||||
| SAFETY | 40 |
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| COMBINED | ||||||||
| COMBINED | 89 |
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ANALYSIS: With an Obermatt Combined Rank of 89 (better than 89% compared with investment alternatives), Herc (Trading & Distribution, USA) shares have much better financial characteristics than comparable stocks. Shares of Herc are a good value (attractively priced) with a consolidated Value Rank of 92 (better than 92% of alternatives), show above-average growth (Growth Rank of 97) but are riskily financed (Safety Rank of 14), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 89, is a strong buy recommendation based on Herc's financial characteristics. As the company Herc's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 92) and above-average growth (Obermatt Growth Rank of 97), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 14) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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