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Avis/Budget a Lemon? Make Lemonade! (CAR)

Posted on September 30, 2021

Some things are just too outrageous to cope with.

Take the Batflu, for instance…

What the…?

Another is the Avis Budget Group (NASDAQ:CAR), master of the vehicle rental sphere, whose stock is now due for an I-405 pile-up.

Fundamentals

Get this –

  • CAR carries an airbag P/E of 46.22,
  • A bumper-bending BUPKUS dividend yield,
  • Revs a Price to Book ratio of 89.39 (!),
  • An unbelievable Debt to Equity ratio of 159.85, and
  • Earnings per Share for the coming year are expected to DECLINE by 38.49% (after declining by 343.20% already this year).

So what’s driving the stock price?

Of late, it’s all short covering.

And there’s still a huge short position out there – over 20% of the float!

Which means a short bet on CAR could be a dangerous endeavor.

Unless we carefully craft the trade as a defined-risk proposition.

And so we shall.

But first, let’s have a look at the daily chart for the last six months –

G-tt in Himmel will decide.

Praise Him all through the day.

And many happy returns!

Matt McAbby

 

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