Ashtead Share Discussion Threads

[discodave4] 19/7/2017 23:15

Nice one fenners.......CLLN, the writing was on the wall for long enough!.DD

[fenners66] 19/7/2017 18:38

That charts looking better

[fenners66] 19/7/2017 18:37

Au contraire - if they are spending this much then there is not as much fire power for a larger target - bolt ons , bolt ons.....
Been having some fun looking at Carillion apart from the low brow bickering there is a lesson to be learned from the short interest held by the institutions for the last few years there.

Made me think about the psychology of profit warnings and I had this take on it :-

Remember CLLN stated that a review of cashflow had prompted the discovery and write off of £850m.

So my take on what that actually meant ...

Senior management to operating arm - "hows things going?"

operating arm " Ok ,bit slow but we have billed "
3 months go by

Senior management to operating arm - "hows things going?"
operating arm " Ok ,bit slow but we are struggling with collecting billed work"

2 months goes by
Senior management to operating arm - "Where is the cash?"
operating arm " Ah well there might be a small issue on one of the contracts , nothing to worry about"

1 month goes by
Senior management to operating arm - "Where is the cash, do we need to send someone to collect it?"
operating arm " Well that small issue may be a bit bigger than we thought"


1 month goes by
Senior management to operating arm - "We'll have to review the situation, we'll get some outside auditors in because they don't know the details and will never get the wool pulled over their eyes"
operating arm " Ok well there is no need to panic I'm sure....."


1 month goes by
Senior management to operating arm - "We're screwed - aren't YOU ! "
operating arm " Ok we've identified a small provision required - not much cash cost to worry about though....."

Senior management to the markets £850m should cover it
Senior management to operating arm - " is that really everything? "

And so it goes on - human nature to delay the bad news in the hope that
a, it gets better
b, someone else declares their bad news first, it may be worse than yours and then you don't look as bad
c, that may mean senior management gets others to sack first and has not got time to sack you
d, just delaying the inevitable in order to get some interviews in first....

Howzat?

[bracke] 19/7/2017 10:15

Good day fenners

You are awarded a Gold Star for your foresight but the acquisition must have you thinking about larger ones and the spectre of a 'you know what'!

Gap fill probable.

[ianwwwhite] 19/7/2017 09:22

"Q was the business purchased in Canada the first expansion into that country?

If so how soon before we see Sunbelt on "Gold Rush"?"
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Nice one fenners, good call!

This info from AHT's strategic plan adds some background:

STRATEGIC PRIORITIES
Target 15% US market share
Take 5% Canadian market share
Increase UK market share by 50%

More background at: (half way down)
.

[fenners66] 19/7/2017 08:29

My post : 53860

"Q was the business purchased in Canada the first expansion into that country?

If so how soon before we see Sunbelt on "Gold Rush"?"


I had an inkling that it would signal expansion into Canada.....

[ianwwwhite] 18/7/2017 18:46

bracke

lol!!

Thanks for your comments, as always, interesting times..

[bracke] 18/7/2017 17:52

A typical AHT day. The DOW takes fright but AHT continues as if nothing had happened, must be the fundamentals.

To-day's candle is a hammer but as it comes after a rising price trend it is called a hanging man and is usually considered bearish reversal.....but Bulkowski states:

"The hanging man is probably one of the better known candlestick patterns, but it does not work as many expect. Candle theory says it acts as a bearish reversal of the prevailing price trend, but my tests show that it is really a bullish continuation 59% of the time. Of course, that is what I call "near random." The hanging man appears frequently in a historical price series, but the trend after the breakout is dismal, ranking 87 out of 103 candle patterns where 1 is best."

Mr Trump not doing very well with Obamacare and the Budget.

[bracke] 18/7/2017 10:12

Following yesterdays large rise a retrace to-day is to be expected.

[bracke] 17/7/2017 17:48

ian

I never doubted your genuine interest with my chart analysis.

27 years!!! I doubt i'll still be around.

The long I took did have a high probability of success given the price action.

Not withstanding 27 years, my interest is in what it does during the next few months.

[ianwwwhite] 17/7/2017 17:21

bracke

Let's get this straight, be in no doubt, I value your charts, different way of thinking and insight.

Keep up the good work!!

P.S. Just read your post above. If you take my advice put your AHT shares in a drawer, and come back in 27 years - worked for me!! lol!

P.P.S. Looks like your long is paying off, well done!

[bracke] 17/7/2017 17:20

ian

I'm only interested in what is causing the ripples as an aid to determining the direction of the next flow.

10% is not a minor retrace, 2%-4% is. Why be concerned with 10%? Because given the good fundamentals it's a large retrace and may be indicative of what is to come.

The plus side is that 1540 held and it has just about stuck its nose above the Daily SMA 100.

Now we wait to see if it is going to go for 1700.

As you post, we agree to disagree and each to their own.

[ianwwwhite] 17/7/2017 16:43

Hi bracke

I think that the difference in our views is one of perspective.

If I may go back Robert Rheas’s Ripples, Waves and Tides analogy, I think that you are wanting to know what causes the Ripples, I am more interested in which way the Tide is flowing.

During the short period that you quote, we have had Trumps ability to deliver his plans questioned, a minor market correction, and an oil price hiccup, all of which have impacted the market to some extent but AHTs business plan remains intact.

It is worth bearing in mind, that on 31 Oct 2016 AHT was at 1217p, by Dec 15 it was at 1640p. Subsequently as you know on Jan 2 AHT was at 1592p, reached a high of 1721p in Feb, and closed on Jul 14 at 1581p.

So, tell me, why are we concerned at a minor retrace of 10% from a high when AHT has risen 30% since October 2016?

It seems we may have to agree to disagree, and I respectfully suggest you make money from AHT your way, and I hope to continue to make money mine!

[uppompeii] 17/7/2017 16:40

"My skin is far too thick".....bracke, is that down to the punishment beatings endured during the dark period when your elite guru status was thrown into doubt?

[bracke] 17/7/2017 15:28

ian

My skin is far too thick for any comment to reach a nerve.

"In the period from March to June we have had some significant other developments:
• Q3 and Q4 results, and record profits for the year ending 30th Apr
• Positive free cash flow for the first time in the last five years of 319 mil
• Dividend increased again
• Five positive Brokers estimates in the range 1650-2000p
• Short Tracker indicates shorts above 0.5% stable at 1.14%, lowest since 2015"
================================================================================

So why during this period did the share price decline 11.4% (I have excluded the long spike down to 1475). I appreciate that an share price will retrace a % or two following a rise and a high but given the results you show 11.4% is over the odds.

I also note that it has been some way outside of the 1650 - 2000 range.

For whatever reason and I do not think it is due to fundamentals which haven't changed; the share price has started rising.

There are ways and means of taking an share price down without shorting whether it be on the open market or on others less transparent.

For me the question is 'what is the intent'. Is today's rise due to genuine purchases because the fundamentals have dawned and we have moved into an accumulation phase, or is it part of the trading strategy that took the share price down from the high. Either way in the short term it doesn't matter to holders, in the mid and long term it might.

Volume will be interesting. I expect at least 3 million .

[ianwwwhite] 17/7/2017 14:45

Good afternoon bracke,

My earlier comment was made in a light-hearted vein, I am sorry if it has touched a raw nerve.

Nevertheless, as you have posed the questions, I am happy to share my views:

At any one time it seems self-evident that the AHT share price is the product of a number of key factors:
• The company’s results, previous trading and financial performance
• The company’s barriers to competition, other competitors, and future market and
trading prospects
• Investment Analysts recommendations (including those using TA)
• Shareholders and prospective purchasers propensity to buy/sell/hold/short shares

In addition in the wider market the follow factors seem important:
• General market trends
• Speed of migration from equipment ownership to renting
• Economic cycle
• Currency fluctuations (particularly $/£)
• Countries attempts to manage their economies e.g. Janet Yellen
(rates/expansion/contraction)
• Factors like the ‘Trump’ effect

In the period from March to June we have had some significant other developments:
• Q3 and Q4 results, and record profits for the year ending 30th Apr
• Positive free cash flow for the first time in the last five years of 319 mil
• Dividend increased again
• Five positive Brokers estimates in the range 1650-2000p
• Short Tracker indicates shorts above 0.5% stable at 1.14%, lowest since 2015

It seems that all these factors will have played a part in maintaining the AHT share price, (I am sure you can think of others), and of course last but not least there is also the share price movements caused by speculators who form a valuable part of the market although their activities may often create a divergence between market price and the company’s perceived intrinsic value.

Did fundamentals play a part in the prices changes you mention – they certainly did in my view.

Finally in trying to understand the markets, I am very much drawn to Robert Rheas’s Ripples, Waves and Tides analogy described in The Dow Theory. It makes pefect sense to me!

[bracke] 17/7/2017 14:15

Good day 2flat

Yes I agree the 30-1600 rise was down to fundamentals.

Why does the share price fluctuate. Simple answer, supply and demand but why does supply and demand fluctuate. I suggest trading and the 'games' that are 'played' as a result.

[2flatpack] 17/7/2017 14:05

Afternoon bracke
As always you are correct.
I would suggest the price rise from sub 30 to 1600 is down to fundamentals, long may they last or is that a technical blip.
The more I look at the fundamentals the only word that comes to mind is consistency so why does the share price fluctuate so much ? That is what I am trying to figure out.
cheers

[ianwwwhite] 17/7/2017 11:43

I see my mere mention of AHT fundamentals at the weekend has reinvigorated the share price this morning!

Now let's see what bracke can do with his charts and squiggly lines! Uh oh! Just spotted brackes earlier post, seems I'm too late!
.