Hertz: rental control - FT.com Hertz's investors - not unlike its customers waiting at the counter - need to show a little patience. A series of prominent activists, including Carl Icahn, have bought stakes in the car rental company. Uncharacteristically, they have made few public statements about what they want - at least so far. They should stay quiet: Hertz's shares were up 60 per cent in 2013, nearly doubling the S&P's return, and with the benefits of the Dollar Thrifty acquisition rolling in, they may be just hitting their stride. Over 90 per cent of the US airport car rental market is now controlled by Enterprise, Hertz and Avis. Each holds a series of brands that target the spoiled business traveller, the cheapskate tourist and everyone in between. Hertz's bulked-up fleet can be shared across divisions and that, along with greater bargaining power with automakers, has helped its profits margin double to 13 per cent since 2006. Another key initiative is growing its much more profitable off-airport rental business, where Hertz's $1bn in revenue only accounts for a tenth of the total market. The main source of investor consternation is Hertz's industrial equipment rental business. It accounts for a third of group profits but only about a tenth of revenue. Because of the disparity in how the two types of rental companies trade (7 to 8 times cash flow for car rental against 5 to 6 times for equipment renters, according to Wells Fargo) Hertz could increase its total value by, say, 10 per cent through a split. Management has signalled its openness to a split. Even with the rally in Hertz shares in 2013, it trailed both Avis" (a 99 per cent gain) and equipment leaser United Rentals" (70 per cent) which may indicate the market's preference for pure plays. If management does not deliver in 2014 there will be plenty of time for activism. Until then, gadflies, breathe deeply and wait.