Do-it-yourself movers have been renting U-Haul International’s 225,000 trucks and trailers at a quickening pace, helping its corporate parent, Amerco (UHAL), close at a record yesterday. The surge made Edward “Joe” Shoen, the company’s chairman, a billionaire.
Amerco reported net income of $2 a share May 28, beating analyst forecasts and giving the Reno, Nevada-based company its fifth-straight year of increasing per-share net income. Amerco has gained more than 3 percent since the earnings report.
“They’re incredibly sophisticated at running their business and they have fully integrated it from top to bottom, from self-storage to the moving business,” James R. Wilen, president of Wilen Management Co. Inc., a value-oriented fund manager based in Lutherville, Maryland, said in a phone call.
Amerco is benefiting from increasing utilization rates of its equipment, as well as the reduction of the truck fleet by competitor Avis Budget Group Inc. (CAR), Wilen said.
“That operating leverage is huge and that’s what is driving the bottom line,” he said.
Wilen’s funds own almost 58,000 shares of Amerco, according to data compiled by Bloomberg.
Shoen, 65, is the son of U-Haul founder Leonard Shoen, who started the company in 1945 after seeing a need for one-way rentals after moving his family from California to Oregon. By 1986, Leonard Shoen had gifted 92 percent of the company to his 12 children from his 5 marriages. That year Joe and his brothers Mark and James forced Leonard from the company and took control of Amerco. Joe Shoen’s been chairman ever since.
“There is a really powerful story that no one outside of the company has really told before of a leader who took an ailing, household name and made it a dominant market player, despite many internal and external challenges,” Amerco spokesman Sebastien Reyes said in an e-mail.
The billionaire was traveling and unavailable for comment, Reyes said. He controls about 18 percent of Amerco, and has never sold a share. He’s collected more than $40 million in salary, bonuses, directors fees and dividends since 1992.
Joe Shoen is the second member of his family to become a billionaire, according to the Bloomberg Billionaires Index. His younger brother Mark V. Shoen has a $4.2 billion fortune, the majority of which is derived from SAC Holding Corp., the second largest self-storage business in the U.S. by revenue after Public Storage (PSA), according to data compiled by Bloomberg.
Most of SAC’s locations are operated under the U-Haul brand and pay Amerco about $1 per square foot a year in fees, according Amerco regulatory filings. He started the business with Joe and another brother, James, in 1993, buying assets from Amerco in part with $600 million in loans from the company.
Joe and James Shoen sold their share to Mark after both were sued by opposing family members over the takeover of the company, according to a 2011 Nevada supreme court opinion. Joe Shoen paid $6 million in punitive damages to other family members as a result.
James, an Amerco director, owns 1.87 million shares as well as a minority stake in Mercury Partners, a 78-location self-storage business controlled by his brother Mark, according to regulatory filings. The three brothers vote their 47 percent share of Amerco as a block.
A sister, Sophia Shoen, owns about seven percent of the company and is not a party to the voting agreement. That stake is valued at more than $380 million.
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