Hertz (NYSE:HTZ) has decided to give up on the cash cow of wildly overcharging customers for filling up the tank. Instead of charging $7 a gallon for gas, they'll charge the market price. Oh, don't get me wrong, they'll still charge an outrageous fee for putting gas in the tank when the deal kicks in on July 1. They'll just charge a flat fee of $7 to fill up, plus the market price of gas. What does that translate to in terms of pay, about $100 an hour to pump gas?

I'm pleased that Hertz is getting out of the gas gouging business. Maybe that field has just gotten too competitive lately. It's getting harder to shock Americans with preposterous gas prices. Rental car companies have been charging insane gas rates -- almost what you'd pay in Europe at the pump -- for years. Consumers think of it as their evil little profit center, like phone charges at hotels.

In a story at USAToday, the industry claims that it's only overcharging to scare people into bringing the car back full, so they don't have to hassle with storing the fuel and filling up cars. So why don't they charge that rate for prepaid gas? USAToday did a survey and found that rental car companies sold pre-paid gas at about $4 a gallon, but charged about $8 when someone returned the car less than full.

While Scotts Miracle Gro Co. (NYSE: SMG) Monday blamed a slow start to spring and recalls for a drop in second-quarter profits, Pilgrims Pride Corp. (NYSE: PPC) said its second-quarter loss widened due to rising feed costs and a restructuring charge. And analysts expect lower consumer spending on leisure travel and a drop in business travel to drag on Avis Budget Group Inc. (NYSE: CAR) first-quarter results when it reports on Tuesday.

Discounting charges, Marysville, Ohio-based Scotts reported it made $77.7 million, or $1.19 per share for the quarter ended March 29, two cents better than the forecast of analysts surveyed by Thomson Financial. Revenue fell 4% to $958 million. The company also warned that profits would likely fall below Wall Street forecasts for the year.

Pilgrim's Pride, the nation's largest chicken producer, lost $111.5 million, or $1.67 per share, in the three months ended March 29 compared with a loss of $40.1 million, or 60 cents per share, a year earlier. Revenue rose to $2.10 billion. Analysts had expected a loss of 81 cents per share on $2.09 billion in sales. The company said feed costs would probably push the company to another loss in the current quarter as well.

Analysts expect Parsippany, New Jersey-based Avis to break even on a per share basis, on $1.37 billion revenue. In last year's first quarter, the company posted profit of 12 cents per share. It's unclear how much of an effect the current economic conditions will have on Avis's full-year 2008 results, but in April, rival Hertz Global Holdings Inc. (NYSE: HTZ) managed to post an adjusted quarterly profit that beat Wall Street predictions.

Shares of Scotts ended the day up 1.2%, but fell nearly 12% in after-hours trading to $30.00. Pilgrim's Pride fell less than 1% during the day, then another 1.1% after hours to $23.59. Avis also continued its slide into after-hours trading, down to $13.49.

MOST NOTEWORTHY: AVX Corp (AVX), Vishay Intertechnology Inc (VSH), Buffalo Wild Wings (BWLD) and three car-rental companies were today's noteworthy downgrades:

• American Technology downgraded both AVX Corp (NYSE: AVX) and Vishay Intertechnology Inc (NYSE: VSH) to Sell from Buy after channel checks suggested weaker than expected demand for the June quarter from Europe, EMS, and distribution.

• Sanders Morris believes investors should take profits in Buffalo Wild Wings Inc (NASDAQ: BWLD), cutting shares to Sell from Buy, and sees limited catalysts on the horizon that could drive shares higher.

• Morgan Stanley downgraded car rental companies Avis Budget Group (NYSE: CAR), Dollar Thrifty Automotive (NYSE: DTG) and Hertz Global Holdings (NYSE: HTZ) to Underweight from Equal-Weight to reflect weak Q2 rental prices.

OTHER DOWNGRADES:

• Lehman downgraded Amgen Inc(NASDAQ: AMGN) to EqualWeight from Overweight.

• Caris cut Limited Inc (NYSE: LTD) to Below Average from Average.

• Goldman downgraded Nvidia Corp (NASDAQ: NVDA) to Neutral from Buy.

• Soleil downgraded Cinemark Holdings Inc (NYSE: CNK) to Hold from Buy.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

We blogged in November to invest in the Hertz (NYSE: HTZ) IPO and those who suffered through the initial volatility are up close to 20%.

Avis Budget Group (NYSE: CAR) is also a good play on the rental car business. Hertz was acquired by private equity from Ford (NYSE: F) and recently came public. Avis was spun off from Cendant last year. Now the two largest rental car companies are publicly traded.

The mere fact that the two largest players are publicly traded should impose pricing discipline. This should translate into higher earnings and higher stock prices for both players over time.

According to Oscar Schafer in this weekend's Barron's Roundtable (subscription required), he expects the company to earn $3.00 this year. With the stock at $24, that is just 8x earnings.

This stock has rallied a bit most likely on Barron's whispers since the interview was held a few weeks ago and only published this weekend. I'd wait for a little pull back and then jump into this stock.