Sunday, February 18, 2007

See The USA

In your Chevrolet - actually - Avis's Chevy.

Want to play earnings roulette? Avis budget rental car (CAR) reports earnings on the 21st. The current historical volatility is 13% and the current implied volatility is 31% which suggests a move is coming but, of course, we don't know up or down. I also don't know how to convert implied volatility into a dollar value but it could be a buck or so.

I also don't know how to value car rental companies - I know Avis "tries harder" but I'm not sure what they try harder to do. I do know one thing - they are number one with a bullet on my quick estimate of efficiency so they are doing something right. About 77% of their float is held by institutions and there have been some sales but the insider activity is almost non-existent with the only transaction in the last 12 months being a 3000 share purchase.

Here is the chart -

And it is a good looker too.

But this is one for folks who want to game earnings - I believe that a stock rising into earnings is usually a good stock to buy and if you get a spike on earnings day - that's probably a good time to sell.

I won't be playing CAR - I just drive 'em.