AMERCO (UHAL) estimates jumped and shares made a drastic turnaround on the recent earnings surprise.
Company Description
AMERCO is the parent company of U-Haul, the widely recognized moving and storage company. Additionally, AMERCO is a parent to 2 insurance companies and a real estate company, which comprise a small portion of the balance sheet.
Revenues Up
On Jun 9 AMERCO reported fourth-quarter results for fiscal 2010 that showed revenues of $444, up 7% since the same period last year. Additionally, the company was able to trim costs by 3%.
The end results was a loss of 43 cents, less than half of the Zacks Consensus Estimate and down from a $1.99 loss a year ago. As you might expect, AMERCO is a seasonal business, typically posting a loss in the fiscal third and fourth quarter.
AMERCO’s full-year earnings came in at $2.74 per share, much improved over the previous year’s 2 cents.
Estimates Pop
Following the news both covering analysts quickly raised full-year estimates. The average forecasts jumped 29 cents to $4.32, a 58% growth rate.
Next year’s projections are up 14 cents to $4.99. However, only one of the analysts has submitted their estimate. The current level would be a 15% increase.
Valuations Look Good
A piece of AMERCO can be yours for less than 12 times forward earnings. Shares have a price-to-book ratio of only 1.2 and trade with a price-to-sales of 0.5. The PEG is a bit higher at 1.3, but far from a reach.
The Chart
Shares of UHAL were in a sharp sell off before the earnings release caused them to turn on a dime. You can see below that bounce back and the shift in momentum in the highlighted portion of the chart.
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