AMERCO (UHAL), mcap=$10.3bn, price $523 vs $553

$UHAL pitch:
– Two businesses under one roof: rental of trucks and related moving equipment and owner/operator of self-storage.
– The stock is cheaper (8x-10x EPS) and the business is stronger and more overcapitalized than ever.
– The market overestimates UHAL’s COVID benefit – two factors drove structurally sustainable earnings growth:
(1) lease-up of self-storage properties that were with zero occupancy initially and
(2) truck and equipment rental price increases.
– UHAL’s brand equity and related competitive moat are underappreciated – the company is dominant in organic web search traffic.
– Management talks openly about taking actions to close the long persisting valuation gap.

$UHAL valuation:
– Trades somewhere between <8x-10x EPS.
– Trucking and rental peers, with much lower margins and ROIC than UHAL, are at 12x EPS.
– Publicly traded self-storage REITs trade at >20x AFFO and <4.5% cap-rates.
– At 10x EPS for rental and a 6.5% cap rate for self-storage, UHAL fair value is at $911/share.

Exp. gain: +50% to $831/share

Full UHAL write-up (free guest account required):

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