Larry Robbins’ Glenview Capital has disclosed ownership of 23.75 million shares of Hertz Global Holdings Inc. (NYSE:HTZ) via a 13G filing with the SEC, which represent 5.20% of the company’s outstanding common stock. This yields an increase of 6.13 million shares from the position revealed in Glenview’s latest 13F filing, which eventually displays Glenview Capital’s confidence in the future outlook of the company.
Glenview Capital, one of the most prominent event-driven hedge funds, was established by Larry Robbins back in 2001. Glenview Capital is widely-known as a friendly activist investor, primarily seeking to engage in constructing and active dialogue with companies’ management so as to unlock shareholder value. According to the fund’s most recent 13F filing, Glenview Capital manages an equity portfolio worth $25.25 billion as of June 30.
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Let’s now move on to Hertz Global Holdings Inc. (NYSE:HTZ) and Larry Robbins’ latest move regarding the company. The stock performance of the car rental company has been very disappointing so far this year, as it has lost nearly 30% since the beginning of 2015. However, the stock could represent a real bargain at the moment and we will try to see if that’s the case. Meanwhile, Carl Icahn’s Icahn Capital LP and Barry Rosenstein’s JANA Partners, two reputable activist investors, represent the largest shareholders of Hertz Global Holdings within our database, holding stakes of 51.92 million shares and 41.94 million shares, respectively.
Overall, Hertz Global Holdings Inc. (NYSE:HTZ) has witnessed an increase of the hedge fund confidence in the last several months. There were 67 hedge funds within our database that owned stakes in the company at the end of the second quarter, compared with 63 reported in the prior quarter. However, the value of the total stakes decreased to $4.06 billion from $5.04 billion over the quarter, while the stock lost over 16% during the April – June period. It is also worth mentioning that the hedge funds tracked by Insider Monkey own 48.90% of Hertz’s outstanding stock, which yet again implies confidence in the company’s future outlook. Therefore, it seems that the smart money believe in the growth or turnaround strategy of the company, but it might take a while until it brings results.
Hertz Global Holdings has been in turmoil for the past year, as the car and truck rental company had to restate its 2011, 2012, and 2013 financial reports due to the discovery of accounting irregularities. However, all the talks around the misstatements should now be over, as the company has already cleared that issue. In addition to the closing of the investigation, the company reaffirmed a $1 billion share-buyback plan and announced the spin-off of its equipment-leasing unit that is expected to finalize in the second quarter of 2016. Moreover, Hertz intends to cut $300 million in costs by freezing the defined-benefit pension plan, closing loss-making offices, improving its fleet management, and implementing a cloud-based IT platform, which suggests that the company has a clear and defined plan of how to turn things around. John Tagues, the recently-assigned CEO, stands behind this overhaul as he plans to assist the company in profiting from the industry’s oligopoly structure.
To conclude with, Hertz Global Holdings Inc. (NYSE:HTZ)’s stock was not overlooked by the latest decline of the stock markets and as there is a high level of uncertainty in stock markets, it will surely put some downward pressure on Hertz’s stock and on the company’s performance in general. However, Hertz is set to rebound and attempt to achieve its full potential in the worst case should the current state of uncertainty waste away.
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