Why On Earth Are Investors Buying This Stock?

Why On Earth Are Investors Buying This Stock?

Why On Earth Are Investors Buying This Stock?

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Let’s get right to the point.

I just recently shared a timely trade with my Profit Amplifier readers that I want to tell you a little about. But since time is of the utmost importance, I’m going to have to get right to the point. But please don’t mistake my brevity or lack of personal trade-related anecdotes for cutting corners.

I’ve examined the details thoroughly and can feel confident in telling you that the stock I’m going to discuss is extremely and undeservedly overbought. Experts from Goldman Sachs and Morgan Stanley, as well as several other high-powered analysts, are on my side. But while their warnings get louder and louder, they seem to be falling on deaf ears.

It’s only a matter of time until the short squeeze in this stock ends and its current price, which is more than 30% higher than the consensus analyst target, comes back to earth. And when it does, we will already be well-positioned with put options to take advantage of the move.

This is a classic case of investors hurrying into investments that may benefit from a natural disaster without thinking things all the way through. They often get overly excited about a stock’s potential without looking too deeply at how an event will affect its fundamentals. The Tractor Supply (Nasdaq:TSCO ) trade I detailed last week , which is already moving in our favor, is another prime example of this.

Lucky for us, the market is set up another trade just like it.

A Gift From Shortsighted Investors
Rental car stocks have experienced an unprecedented boom since Hurricane Harvey was first spotted in the gulf, but some, like Hertz Global Holdings (NYSE: HTZ ) , have been pushed up too far.

Hertz is the second-largest car rental company in the United States, sandwiched between market leader Enterprise (which has nearly three times as many cars as Hertz) and Avis Budget Group (slightly smaller than Hertz). Based in Florida and operating primarily in North America, the company also has a presence in Europe, Latin America, Asia, Australia, Africa, the Middle East and New Zealand.

Despite its recent price appreciation, Hertz has been experiencing serious declines in revenue since 2014 and is currently losing money. The average analyst — and remember, these are usually the most optimistic estimates in the room — has a price target of just over…READ MORE