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United Rentals, Inc. (URI) May Be Getting Ahead of Itself

URI has been on a tear, but you might want to hold out for now

The Trump Rally is now in the books as the best post-election move ever after just five weeks. All of the major indices are trading close to new highs, and while it’s not quite like waiting for the ball to drop on New Year’s Eve in Times Square, the market continues to watch for Dow 20,000, which is likely not far away.


A lot of stocks have reaped the benefits of the post-election rally, but one of my favorites has to be United Rentals, Inc. (NYSE:URI). It’s the largest equipment rental company in the world, leasing to businesses, utilities, governments and even homeowners.

URI has more than 3,000 classes of equipment and rents them through more than 880 locations in 49 states and 10 Canadian provinces. About 50% of customers are non-construction, such as industrials. Slightly less (46%) are non-residential construction and the remaining 4% are residential.

URI Stock Has Been a Juggernaut

Earlier this year, I took the opportunity to add URI to my Smart Investing Buy List the day after the election. URI stock had been chopping around prior, but the results caused it to break out in the aftermath, as the well-run equipment rental company would be a big winner with a spike in demand for big government infrastructure spending. It’s also perfectly positioned to rally on improved private sector demand.

As I had anticipated, URI stock took off, but I would be patient about buying after its huge run. URI has climbed far and fast, and it may have gotten ahead of itself. At this point, the best move is to wait for a pullback. My subscribers locked in very quick profits, and we are now ready to pounce at the next opportunity.

The hype has continued for the moment, fueled in part by analysts raising their ratings of URI stock. I’m not surprised, though. Wall Street is always late to the game. That said, I still think the current enthusiasm here might be a few months ahead of reality, which makes URI more vulnerable to a retracement. That would be the buying opportunity.

Bottom Line on URI Stock

Long before November 8, I had identified URI as a stock that would do well on the rebuilding America theme, no matter which candidate won. I still really like the company and expect it to do well over time.

I’m not a buyer at these elevated levels, but I’m sure watching closely for right time to get back into URI stock.

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