United Rentals, Inc. (NYSE:URI)

ht Fusion IQ

A lot of people will be using this service as the economy rolls along.

s&P 5 star

Buy american

Bought on the dip. Should continue growth.

Poor fundamentals.

When housing and construction pick up contractors will need to rent equipment.

Construction market is coming back and more homeowners are tackling their own projects instead of hiring contractors.

This company should do well under a recovering economy with assist for infrastructure projects by the Federal government.

Shoutout to Berkowitz

This stock was grossly undervalued a month ago but has been creeping up. I bought on March 9th for $3.04 and have already made a reasonable profit. This company tends to have a boom and bust cycle which follows the construction economy. I bought this in 2002 for about $5 and sold in 2007 for about $33. It is a good company that is the leader in its field but is beat up by macro conditions. They have closed a number of under-performing stores and bought back shares so that now there are only sixty million outstanding. The economy will eventually recover and URI will be well positioned to take advantage. Sure the company isn't very profitable at this exact moment but if you are a buy and hold value investor as I am, you can make a lot riding this company up over the next five to seven years.

Estimated free cash flow of 2$ per share for 2009 according to value investor Bruce Berkowitz.

If this trun out to be true, then this stock is selling at only 2.5 times cash flow.

Who wouldn't like to be able to purchase a business at this price level?

Solid management and planning for upcoming rough years conservatively, they do have lots of debt, but their assets can be liquified fairly quickly if needed...debt not due till 2012 though.

Balance sheet from last year took large losses on new equipment purchases that hurt it's earnings report. 2009 and beyond will output better numbers and the Obama stimulus package should increase demand for their rental units with new construction.

rental

I love this company. I first was tipped by my colleges construction and the equipment being used. Along with Bobcats, about every machine being used is rented through United Rentals. The stock plunged after the failed takeover, but it has continued to put up numbers in a very tough macro environment.

It was "Tails"

United is a good company in a good business. The $34.50 buyout price that was offered by Cerberus is a reasonable target price for 2010.

URI recently was offered $34.50/share by a private equity firm (Cerberus Capital), but due to the collapse of the credit market the deal fell thru.
URI is likely still taking bids if any are out there so there may be an opportunity for a second bid (likely at a lower price) once the market decides to settle down (hopefully in the 2nd half ’08).
Also, I believe since URI only has a 7% market share in the North American they have plenty of room to grow in their current market plus have ample opportunity to pursue Europe, Asia, and South America.