Ashtead Technology Share Discussion Threads

[johnrxx99] 09/5/2024 04:13

Interestingly, on Sharescope, AT. and W7L have the same foreward peg of 1.6. I hold both but AT. is my largest holding.

[sogoesit] 08/5/2024 17:09

Thanks,
Yep, that's low-ball.
The share price growth trend rate from IPO (Dec 2021) to October 2023 was about 50%pa.

It then broke-out and then there was a further displacement upon the ACE Winch acquisition and it consolidated between 01/12/23 and 24/01/24.

The share price then entered a new trend from a low of 572 on 12/01/24 to today at 825. This trend rate is about 200% CAGR. FFS!

Lets also be conservative and by awarding it a PEG of 1 at the old share price growth rate of 50% thereabouts. The forward P/E of 22.5 is thus 0.5 or thereabouts.
Thus significantly undervalued!

The other comparator is W7L which, until 18/04/24, was also in a growth trend rate of 50%.
But on recent results its 18p EPS, up 123% y-o-y, means it now trades, at share price 460, on 25x P/E.
Also undervalued.
But I think AT is the winner here... for the time being. Unless W7L rerates.

[johnrxx99] 08/5/2024 15:40

Projected PE 22.5 - Sharescope

[sogoesit] 08/5/2024 14:22

Cheers...
I make all forecasts, consistently approx. 14% pa underlying EPS growth, to be one year adrift. So I make FY24 to be about 40/42p versus 37.6p.

What's the consensus forward P/E... anyone?
What will you pay for this?

I think analysts are low-balling. Still, they're paid and I'm not.

[carcosa] 08/5/2024 06:30

Updated Analyst Forecasts:

[sogoesit] 07/5/2024 18:49

Someone bought 54,613 shares at 16:35 at 847p

[bigbigdave] 07/5/2024 16:43

WOW! What a close! News coming?

[faz] 07/5/2024 16:27

deutsche might just have to revise that figure tomorrow!

[sogoesit] 07/5/2024 11:19

Ok, cheers!

[sogoesit] 07/5/2024 10:41

Thanks for that broker input, carcosa...

QUOTE
"This model helps to drive strong pricing power, margins and returns," said Berenberg, which also issued the stock a 405.0p target price.
UNQUOTE

Can you edit your "405.0p" TP quote, please?

[carcosa] 07/5/2024 08:35

*Removed - Duff quote* Sorry. Berenberg actually initiated coverage in Feb 2024

[bigbigdave] 07/5/2024 08:23

DEUTSCHE BANK RESEARCH STARTS ASHTEAD TECHNOLOGY WITH 'HOLD' - PRICE TARGET 835 PENCE

[whittler100] 02/5/2024 09:37

CEO's sale was simply selling his award under the LTIP, another LTIP was was announced in an RNS dated 24th April and this one vests from end of 2026.

"1 May 2024, Allan Pirie, CEO and Executive Director, has exercised options for 270,926 ordinary shares under the IPO LTIP at nil cost, and has sold 270,926 shares. Following this exercise, and sale, Allan Pirie retains a beneficial interest in 1,341,600 ordinary shares representing approximately 1.7% of the Company's issued share capital!.

[bigbigdave] 02/5/2024 07:44

CEO offloading a few yesterday, maybe reason for the dip. He still has plenty.

[villarich] 30/4/2024 07:18

I doubled up on results day

[bigbigdave] 29/4/2024 17:49

Wonder if those that sold out on results day at 14% off have been buying back.

[zho] 29/4/2024 13:28

This company’s share price has trebled and still has further upside

A subsea services group is benefiting from strong growth drivers and is primed to deliver double-digit growth for years to come

[slogsweep] 29/4/2024 09:52

4 big trades gone though 4x20625=82500 shown as sells but probably buys as share price unmoved, looks like institutional buying, bit late small investors have been here since 160!

[solarno lopez] 29/4/2024 09:07

Will it hold ?

[wilmdav] 28/4/2024 17:30

I have now had a closer look at how AT is likely to have arrived at an ROIC figure of 28.6% for 2023.

My post 399 above noted that three different formulae provided by Investopedia produce three different figures for the denominator of ROIC. This remains the case but the figures are all in the same rather wide ball park.

Having read the Morgan Stanley 44 page article I am going to settle for the following Investopedia definition of Investment Capital, while bearing in mind that the MS article demonstrates how ROIC can be significantly affected by various adjustments that might be necessary.

IC = Total assets - cash - non interest bearing current liabilities (including tax and account payables)

The denominator is the average of IC over the reported year. This would normally be calculated by adding figures for the reported year and its predecessor and dividing by 2. In AT's case this would be problematic because of the final one month increase of investment in Ace Winches. To calculate the 2023 IC the company appears to have taken the 2022 figure and added one twelfth of the difference between figures for the two years - or something along those lines.

However IC for 2024 will be affected by Ace Winches for the whole year. Hence an indication of ROIC for 2024 can be gleaned by simply using the 2023 IC as denominator. During the analyst presentation the company said it was looking for an ROIC going forward of high teens.

The numerator is NOPAT (net operating profit (EBIT) after tax). In AT's case they appear to have used adjusted EBITA minus tax, which would be in accordance with Morgan Stanley's advice. AT has conveniently provided a figure for adjusted EVITA of 36.2m. My calculations suggest they have also followed MS advice in adding the interest component of operating lease expense, which brings the NOPAT figure up to 37.4m or 29.9m after deduction of a notional 20% tax.

The outcome of all this is an ROIC of 26.9% and around 18% going forward, which is close enough for the purpose of showing the kind of calculations the company is likely to have made.

I should add that MS makes a point that companies need some cash in their working capital to operate. They suggest a figure between 2% and 5%, depending on the company's size and maturity. Adding this back would reduce the outcome of ROIC calculations somewhat.

The current p/e on 2023 earnings is 24.3 and 21.4 for 2024 earnings. The PEGs are 1.8 and 1.4 respectively.

[wilmdav] 27/4/2024 13:55

Sagoesit

Doesn't that assume that the current P/E is oblivious to 2023 ROIC?

Is it not also true that if the price goes up the P/E will also go up and your formula would provide a higher price target?

[sogoesit] 26/4/2024 16:32

Well, let's hope it gets back to its senses and continues a trend towards £10.50 approx. from next week onwards.... ;-))

[33.4 x 1.28 (ROIC) x 24 (P/E)]

[bigbigdave] 25/4/2024 13:39

Looks like it wants to go back to the previous high.