Car Stock Quick Win by the Algorithm: Partnership With Alphabet Puts Avis In The Fast Lane

Quick Win by the Algorithm

On June 21st, 2016, the I Know First algorithm issued a bullish forecast for Avis Budget Group, Inc. (NASDAQ:CAR). Avis had a signal of 11.52 and a predictability of 0.20. As a result, in accordance with the forecast, the company’s stock increased by 20.21% in a year, showing a quick win by the algorithm.

car stock

The Avis Budget Group, Inc. (CAR) is a leading global provider of vehicle sharing and rental services. Its Avis and Budget brands operate in more than 11,000 rental locations in about 180 countries. Its Zipcar brand boasts more than one million users. Avis’s American segment license its brands for car rentals in the United States. The firm’s international operations engage in vehicle leasing in Europe, the Middle East, Africa, Asia, Australia, and New Zealand.

quick win

It comes as no surprise that Avis shares have been performing well recently. On June 26, Avis entered a partnership with Waymo, the autonomous vehicle unit of Alphabet Inc. As a result, Avis shares climbed nearly 10% in morning trading on the same day of the agreement. Terms of the deal entail Avis’s management of Waymo’s fleet of self-driving cars. The firm will service and store Waymo’s Chrysler Pacifica minivans in Phoenix, the testing ground for Alphabet’s pilot ride-hailing service.  The companies did not disclose financial details of the arrangement. Waymo will maintain ownership of its vehicles and pay Avis for maintenance services of its fleet.

While the lucrative potential of the arrangement currently remains unclear for Avis, having the backing of a prominent company such as Alphabet is a symbolic win for the firm. Alphabet’s support also provides validation for Avis’s on-demand rental service, Zipcar, which could have the potential to transition into an autonomous vehicle rental service over time. In addition, this deal comes amid the formation of a series of partnerships in the autonomous vehicles field as automotive companies rush to position themselves in an industry trending towards a driverless future. As this partnership is the first major one of its kind involving driverless vehicle fleet oversight, the deal is a boon to Avis’s growth prospects and helps the firm secure a foothold in the autonomous vehicle industry. Avis CEO has expressed optimism in Avis’s extending its business into “fleet-management-as-a-service” as another potential revenue stream.

Given this development, we can see why Avis shares increased.

This bullish forecast on CAR was sent to current I Know First subscribers on June 21, 2017. 

Before making any trading decisions, consult the latest forecast as the algorithm updates predictions daily. You can use the algorithm for intra-day trading. The predictability tends to become stronger with forecasts over longer time-horizons such as the 1-month, 3-month and 1-year forecasts.