Hot stock to watch: AMERCO (NASDAQ: UHAL)

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AMERCO (NASDAQ: UHAL) stock rose over 3.73% on May 28th, 2020 pre-market session (Source: Google finance) after the company in the fourth quarter of FY 20 has reported the reported the net earnings available to shareholders of $122.4 million, compared to net earnings of $0.8 million, for the same period last year. Towards the end of March and into April and May, COVID-19 has negatively impacted the operating cash flows through lower self-moving equipment rental revenues along with a near total reduction in equipment sales proceeds stemming from the closures of commercial auto auctions. The cash and credit availability at the Moving and Storage operating segment was $498.1 million at the end of March, 2020 and in excess of $400 million as of April 30, 2020. In May 2020, the company had signed a $200 million term loan to further strengthen the liquidity position.

Moreover, during the fourth quarter, Self-moving equipment rental revenues fell 2.1% in the fourth quarter of fiscal 2020 compared with the fourth quarter of fiscal 2019 and ended the full year up $38.9 million or 1.5% compared with fiscal 2019. The company has increased the number of retail locations, trucks and trailers in the rental fleet compared to the same period last year. Self-storage revenues rose 13.1% in the fourth quarter of fiscal 2020 compared to the fourth quarter of fiscal 2019. The average monthly number of occupied units rose by 16.5%, or 47,000 units during the fourth quarter of fiscal 2020 compared with the same period last year. The growth in revenues and units rented are on back of a combination of occupancy gains at existing locations and from the additions of new facilities to the portfolio. Operating earnings at the Moving and Storage operating segment fell by $33.7 million in the fourth quarter of fiscal 2020 compared with the same period last year. Total revenues rose $9.4 million and total costs and expenses grew $43.1 million. The company’s Life Insurance subsidiary’s premiums increased $75.8 million in the fourth quarter fiscal 2020 compared to fiscal 2019 mainly due to a terminated reinsurance agreement in the fourth quarter of fiscal 2019, which had reduced their Life Insurance premiums $78.4 million and their Benefits and Losses expense by $76.4 million.

Additionally, in April and May of 2020, the company has opted to slow the development of new self-storage projects to preserve liquidity.

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