Insider Trading Report: Avis Budget Group (CAR)

SRS Investment Management bought 104,900 more shares of Avis Budget Group (CAR) recently. The buy upped the fund’s stake by a mere 0.6 percent despite a cost of $3.6 million. That’s thanks to the fund’s 18.3 million share stake in the car rental firm.

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  • This is the fund’s third buy so far this month. The fund has been an active buyer all year, at prices as much as 40 percent lower than where shares currently trade.

    A number of insiders have also been buyers, albeit earlier in the year at far lower prices. Shares reached a high of $40 in mid-October, but have had trouble moving higher. With more insider interest, and with an economy moving towards being more open except for a few densely-populated hotspots, shares appear likely to continue to trend higher.

    While holiday travel demand is expected to be less than half that of 2019, early numbers are showing rising holiday travel trends, which will likely help shares rally further in the coming weeks.

    Action to take: With insiders buying and shares trending back to their old 52-week high of $47, traders should consider the February 2021 $40 calls. Just slightly out-of-the-money, the calls trade near $4.00, making them an inexpensive play on shares moving higher.

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  • Traders can likely nab mid-to-high double-digit gains, likely as soon as shares manage to hold a price over $40. After all, why buy shares when you can just rent them?