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Is United Rentals Inc. (URI) A Smart Long-Term Buy?

Jose Karlo Mari Tottoc
·Lesedauer: 3 Min.

Carillon Tower Advisers, an investment management firm, published its “Carillon Eagle Mid Cap Growth Fund” first quarter 2021 investor letter – a copy of which can be downloaded here. Mid-cap stocks as a whole advanced in the first quarter of 2021. However, there was a rather considerable disparity among the two style indexes, as the Russell Midcap® Growth Index (down 0.57%) significantly lagged its Russell Midcap® Value Index (13.45%) counterpart. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Carillon Tower Advisers, in their Q1 2021 investor letter, mentioned United Rentals, Inc. (NYSE: URI), and shared their insights on the company. United Rentals, Inc. is a Stamford, Connecticut-based equipment rental company that currently has a $23.5 billion market capitalization. Since the beginning of the year, URI delivered a 40.14% return, extending its 12-month gains to 185.42%. As of May 03, 2021, the stock closed at $321.80 per share.

Here is what Carillon Tower Advisers has to say about United Rentals, Inc. in their Q1 2021 investor letter:

"United Rental is an equipment rental company that primarily services construction and industrial companies, as well as manufacturers, utilities, homeowners, municipalities, and other government entities. The firm performed well in the first quarter as the company is a clear beneficiary of both a strengthening economy as well as a possible infrastructure bill. United Rentals’ business model performed exceptionally well in 2020 as the company generated substantial free cash flow by aggressively scaling back its capital expenditures. In 2021, we believe the company should be able to push its rental rates higher following a year of disciplined fleet management across the entire equipment rental industry. Additionally, the entire rental industry should benefit from tightness throughout the machinery sector as manufacturers struggle to meet demand due to supply chain constraints."

Backhoe
Backhoe

Our calculations show that United Rentals, Inc. (NYSE: URI) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, United Rentals, Inc. was in 46 hedge fund portfolios, compared to 40 funds in the third quarter. URI delivered a 29.66% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best innovative stocks to buy to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website:

Disclosure: None. This article is originally published at Insider Monkey.