Dollar Thrifty: Bull or Bear?

After one investment columnist gave its dreaded one-star ranking to Dollar Thrifty Automotive on Jan. 19, shares of the company were on the rise on Feb. 1, according to tradingmarkets.com, crossing bullishly above their 10-day moving average of $25.37 on volume of 214 thousand shares.

“This may provide swing traders with an opportunity for a long position as such a crossover often suggests higher prices in the near term,” wrote Chip Brian of TradingMarkets.com.

Another investment writer Brian D. Pacampara countered in his “The Motley Fool” column on msnbc.com that Dollar Thrifty “operates in a terrible industry, with too many competitors and no company enjoying any durable competitive advantage.”

He also wrote that on CAPS, 84 percent of the 204 All-Star members who have rated Dollar Thrifty believed the stock would underperform the S&P 500 going forward.

One of the CAPS members wrote that at its Jan. 19 price of $27.55, Dollar Thrifty Automotive is selling at two times book value despite the fact that it is currently losing money and “despite the fact that the company's long term returns on equity are tepid at best.” He added that “I believe Dollar Thrifty is likely to disappoint.”

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