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August 7, 2008 Stock Pick: Avis Budget Group, Inc. (CAR)

Stock Price: $7.02

Avis Budget Group, Inc. provides car and truck rentals, and ancillary services to businesses and consumers in the United States and internationally. The company supplies rental cars to the premium commercial and leisure segments of the travel industry under the Avis brand name and to the price-conscious segments of the industry under the Budget brand name.

CAR reported better-than-expected 2nd quarter results earlier in the day. This comes after investors were bearish on CAR with its shares trading as low as $4.20 recently.

We believe sentiment is now turning around on CAR and that it can have strong gains from its current price level. Gas prices have also begun to level out at lower levels and should lessen the strain on CAR's business.

CAR expects revenue to rise above its $6 billion level of 2007 and the company sees pre-tax income of about $140 million, excluding items. CAR is trading at a market cap of only $709.67 million.

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