Ashtead Share Discussion Threads

[bracke] 02/3/2017 12:15

AHT is shown as 21.3 on ADFVN and 18.9 on Big Charts.

If 92p and 18.9 are used forecast share price is £17.39.

If 100p and 18.9 are used forecast share price is £18.90.

[2flatpack] 02/3/2017 12:08

As I understand it AHT have expanded capex near the top of their stated range already.
From the last presentation Geoff stated there are 2000+ construction project $10M+ planed for 2017 and Aht's planning did not include any pie in the sky from Trump.
Unless they change their criteria I cannot see how they can expand capex in the
short term. Geoff did also state that their capex was larger than all the other players and that he expected the Trump spending to take more than a year to begin.
In the short term I see rates improving but I think the board will keep capex under control.
Another point is oil and gas .
Fracking is increasing. URI are more into it than us. I guess their capex will lean that way.
I think we are expanding in a controlled way and I hope we do not overreach.
Having said that we have a board who I have every confidence in .
Just a few idea's that came on reading the last few posts.
Asever I live in hope .
Cheers

[fenners66] 02/3/2017 11:52

H& E and URI though are on 22.5 and 18.6 respectively already building in the Trump effect presumably but that leaves AHT looking cheap by comparison

[fenners66] 02/3/2017 11:49

That's the 64 million dollar question (or not).

What's already priced in?
I like to use 10x PE for my own benchmark , however the earnings here are growing anyway, so 92p earnings this year?
Next year 110 ?
Take out the 300p for Trump and you get to 13x on current price but there's an expectation of growth...

[bracke] 02/3/2017 11:34

So what share price are you suggesting?

[fenners66] 02/3/2017 10:56

No I'm taking a PE of say 10 given that the same assumption is for infrastructure spend seems ok

[bracke] 02/3/2017 10:49

Thanks fenners

"To value that on say the same 10 years x 10 = £1500m to add to the share price based on 500m shares

= 300p a share"
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Hmmmm........you are taking 10 years of additional cash adding it together into one year to achieve an additional 300p/share. Very creative. Surely it should be calculated per year ie. an additional 30p/share

[kilgallp] 02/3/2017 10:48

Thanks Ianwwwhite, but it remains to be seen whether it was the right move. My last sale was at a little over £15, so you could argue I got it wrong. Then again, I'm notoriously bad at selling, I generally watch my shares drop before getting out. So locking in some profit seemed a good idea. I still like the Ashtead story, if there's a significant retrace I'll probably buy some back.

[fenners66] 02/3/2017 10:31

Hi Bracke,

1, I thought that the spend on construction in the USA included a traditional 6 % spent on plant hire but a glance at the 2016 accounts could not find it. However there is a chart of the UK construction spend at £135bn so given the known 6 % of the plant hire market in the UK (also in the accounts) and the turnover of £365m then we can deduce 4.4%.

2, 60% drop through ( the proportion of incremental rental revenue that drops through
to EBITDA) was easy the header of page 27 of 2016 accounts has this in bold so I stopped looking.

Cheers

[bracke] 02/3/2017 10:13

Good day fenners

Thank you for your calculations. I have a few questions

1 "Then of that say 4.4% is spent on plant hire" Where are you obtaining 4.4% from?

2 "Sunbelt's drop through -60% - from the same accounts" You've lost me with this. What does it mean?

I may have additional questions once you have answered the above.

[fenners66] 02/3/2017 09:44

With all this talk of $1 trillion to be spent on infrastructure I thought I would estimate the potential impact :

So assuming its planned to be spent over say 10 years = $100 Bn /yr

Then of that say 4.4% is spent on plant hire - I looked at 2016 accounts and calculated that % from the UK construction spend since it's lower rental penetration in the US this may be a little high , but penetration is rising and I had a number in the back of my head which was higher so settled on this.

AHT have 7% of the US rental market, planned to rise but less leave it for now.

Sunbelt's drop through -60% - from the same accounts

So that gives $100bn x 4.4% x 7% x 60% = $185m profit
Use say $1.23/£ gives us £150m PBT

To value that on say the same 10 years x 10 = £1500m to add to the share price based on 500m shares

= 300p a share

Of course some of that may be built in and you may shorten the infrastructure spend period etc. but I think its a starter for ten......

[ianwwwhite] 02/3/2017 00:58

The FTSE has enjoyed an outstanding day, thanks in part to a weakening pound at the hands of a resurgent US dollar," said Joshua Mahony, market analyst:

"Trump's infrastructure promise has clearly had a substantial effect upon the FTSE, with the leader-board including firms such as Ashtead and CRH which stand to gain substantially from the approval of $1trn in spending," Mahony added.

FTSE 100 - Risers
Ashtead Group (AHT) 1,751.00p 5.74%
CRH (CRH) 2,854.00p 4.93%
Glencore (GLEN) 337.75p 4.88%
Next (NXT) 4,003.00p 4.60%
ITV (ITV) 211.70p 4.54%
Persimmon (PSN) 2,150.00p 4.32%
BHP Billiton (BLT) 1,353.50p 4.32%
Standard Chartered (STAN) 748.50p 3.61%
Wolseley (WOS) 5,090.00p 3.56%
Bunzl (BNZL) 2,335.00p 3.55%

[fenners66] 01/3/2017 23:24

Have to celebrate the new all time closing high though - well done AHT

[ianwwwhite] 01/3/2017 18:15

2flatpack

Thanks for your comments, but I must admit in the short term serendipity and happenstance should get most of the credit if my strategy does pays off.

The vagaries of short term price movements are beyond me too!

[2flatpack] 01/3/2017 17:50

Evening fenners
Not sure I agree with you.
Take 24.02.17 down 64p 3.8% on a volume of over 6 mill.
note .
I normally use advfn or IG figures didn't realise there was such a large discrepancy between them and LSE.
cheers

[fenners66] 01/3/2017 17:04

Low volume?
2.5m after yesterdays 3m so not so low, especially since the cost of those shares has risen, this £42m shares traded today.

[2flatpack] 01/3/2017 16:50

ian congratulations on your hold strategy.
I find it hard to understand how the share price ticks up by 6% on such low volume.
I must admit it has unnerved me somewhat .
The coming few days should prove interesting.
cheers

[bracke] 01/3/2017 16:44

ian

Powder dry as far as AHT goes.

Which 'serious' posters. If they have something useful to post they should do so.

Not strictly relevant but of interest never the less is the DOW. It has powered straight through 21,000. It will be unusual if it does not drop back to test that level.

[ianwwwhite] 01/3/2017 16:41

Kilgallp

Congratulation on your sale, you may well have got 'top dollar' today, I sense a retrace in the coming days but who knows?

[ianwwwhite] 01/3/2017 16:34

Bracke,

I know, I just wanted to get the 'powder dry'. reference in :-)

I fear I am due for another telling off from one of the serious posters...

[kilgallp] 01/3/2017 16:31

Sold a second 25% today, to lock in some profit. If it follows the pattern of my last sale, the share price should be £19+ in no time!

[ianwwwhite] 01/3/2017 16:31

uppompeii

I think you have got your tactics absolutely right, and well may get the opportunity to buy back at a lower level, after all this is Ashtead!

I too go back to the days of people like Hatto, DCD, topcar, rescuer etc, but in those days I was more of a watcher than a poster. Still am really!

[bracke] 01/3/2017 16:30

ian

Re Hot Water - I wasn't complaining. It's a poignant reminder.

[ianwwwhite] 01/3/2017 16:26

Hi bracke,

Just come back from the golf driving range, tried out some new irons on a bright warm sunny afternoon - where did that come from?

Point taken re 'hot water', and glad to see you are keeping your powder dry for the time being! :-)

[uppompeii] 01/3/2017 15:51

Thanks Ian. I've had these in the Sipp from £9 ( yes a latecomer, having had them 1st time round with i think Hatto taking the lead many years ago ). Always hard and already still going higher. I have a few left so not to worry!