Mario Gabelli Stock Portfolio: 10 Best Stocks to Buy

1) Herc Holdings Inc. (NYSE:HRI)

GAMCO Investors’ Stake Value: $198.1 million

Percentage of GAMCO Investors’ 13F Portfolio: 2.15%

Number of Hedge Fund Holders: 32

Herc Holdings Inc. (NYSE:HRI), through its subsidiaries, provides equipment rental services in critical markets, such as construction, industrial and manufacturing, petrochemicals, refineries, civil infrastructure, and automotive, among others.

In 2Q 2024, the company saw record equipment rental revenue of $765 million, exhibiting an increase of 9% YoY and record total revenues of $848 million, an increase of 6% YoY. During 2Q 2024, the company benefited from positive rental pricing, improved fleet efficiency, and enhanced market share.

For 2H 2024, mega project activity continues to ramp up into peak season as expected. Notably, higher revenue growth for the remainder of the year and incremental adjustments made in 2Q 2024 to better align the local cost structure should help drive more normal margin and REBITDA (Rental Adjusted EBITDA) flow through for 2H 2024.

Despite slower growth in the current rate-sensitive local market, the outlook for rental demand remains strong. This is because the pipeline for mega projects is healthy, data center construction continues to accelerate, and federal infrastructure spending continues to roll out. Herc Holdings Inc. (NYSE:HRI) should continue to ride high, mainly due to fleet efficiency, pricing power, and growth opportunities available in the entertainment and industrial sectors. It plans to capitalize on the opportunities available in construction activity over the upcoming 3 years.

JPMorgan Chase & Co. initiated the coverage on the shares of Herc Holdings Inc. (NYSE:HRI) on 7^th June. They gave a “neutral” rating and a price target of $155.00. Around 4 research analysts gave a “Hold” rating and 1 analyst gave a “Buy” rating on Herc Holdings Inc. (NYSE:HRI)’s stock.

As per Insider Monkey, 32 hedge funds hold Herc Holdings Inc. (NYSE:HRI) as of Q2 2024.

While we acknowledge the potential of HRI as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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