What Happened?

A number of stocks jumped in the afternoon session after the US president announced a framework for a future deal with Greenland. 

Wall Street saw a broad-based rally, with the S&P 500 gaining 1.2% as investor concerns over global trade tensions eased. The positive sentiment followed an announcement that reversed course on plans to impose tariffs linked to Greenland, which had caused steep market losses earlier in the week. This recovery reflected renewed optimism in the market, as the threat of a widening trade conflict appeared to subside, encouraging investors to move back into equities.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Specialty Equipment Distributors company Herc (NYSE: HRI) jumped 3.5%. Is now the time to buy Herc? Access our full analysis report here, it’s free.
• Automobile Manufacturing company Lucid (NASDAQ: LCID) jumped 2.6%. Is now the time to buy Lucid? Access our full analysis report here, it’s free.
• Energy Products and Services company Ameresco (NYSE: AMRC) jumped 3.2%. Is now the time to buy Ameresco? Access our full analysis report here, it’s free.
• Custom Parts Manufacturing company Stratasys (NASDAQ: SSYS) jumped 3.3%. Is now the time to buy Stratasys? Access our full analysis report here, it’s free.
• Waste Management company Perma-Fix (NASDAQ: PESI) jumped 3.2%. Is now the time to buy Perma-Fix? Access our full analysis report here, it’s free.

Zooming In On Herc (HRI)

Herc’s shares are extremely volatile and have had 40 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 6 months ago when the stock dropped 17.9% on the news that the company issued a disappointing full-year forecast that overshadowed its second-quarter financial results. 

While the equipment rental company's revenue grew 18.2% year-over-year to $1.00 billion, it reported a net loss of $35 million. This loss stemmed primarily from $73 million in costs related to its acquisition of H&E Equipment Services and a $49 million asset impairment. The market reacted negatively to the company's updated guidance for the full year, with its revenue projection falling 15% below analyst expectations. The acquisition also increased Herc's debt load and pushed its net leverage ratio to 3.8x, amplifying concerns about the company's financial stability amid the costly integration process.

Herc is up 11.8% since the beginning of the year, but at $170.29 per share, it is still trading 19.3% below its 52-week high of $211.06 from January 2025. Investors who bought $1,000 worth of Herc’s shares 5 years ago would now be looking at an investment worth $2,362.

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