Forage Capital’s David Kim Wades Into Ever-Expanding Alphabet/Amazon/Facebook Battle, Likes AMERCO

David Kim Loves AMERCO (NASDAQ:UHAL)

David Kim said he bought shares of AMERCO (NASDAQ:UHAL), a moving and storage equipment company, after it reported disappointing second-quarter results. According to the investor, Amerco has a strong network of over 20,000 rental locations in different cities and 60 years of experience. These factors make AMERCO better than its two main rivals, Budget Truck Rental and Penske. Such a large number of rental locations provide Amerco to win customers who want to move between different cities. Kim thinks that albeit Amerco lacks flawless customer satisfaction and business model, its service, competitive advantage and future growth prospects make it a tempting option. The company is trying to solve the problem of increasing input costs and margins. It is employing used trucks for the deliveries decreasing the company’s costs. Amerco’s self-storage business however could be affected badly (by approximately $2.26 a share) should the rents go down to 2008 levels. But self-storage is not the core business of the company. Amerco’s core business is “cycle resilient” according to Kim, and the company has generated healthy returns over the course of many years. At the end of the second quarter, 23 hedge funds out of 750 funds in our database were long AMERCO (NASDAQ:UHAL).

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