Ashtead Share Discussion Threads

[bracke] 03/1/2020 15:55

perfido

Thank you for the explanation.

"I have no intention of reopening the 'buyback' discussion again :-)"
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Neither have I.

"Was 2440p for Mater's recent sale not enough for you? :-)"
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Enough is never enough.


Given that there are now fewer shares eligible for the dividend and assuming that the cash amount available for dividend is unchanged or greater; the dividend should increase relative to the reduced number of shares.

If my reasoning is correct should that not increase the attraction of the shares and therefore result in an increased SP?

[perfido] 03/1/2020 15:09

Good day bracke (aka fido)

Perhaps this might help:

In an efficient market, a company buying back its stock should have no effect on its price per share valuation. If the market fairly prices a company's shares at $50/share, and the company buys back 100 shares for $5,000, it now has $5,000 less cash but there are 100 fewer shares outstanding; the net effect should be that the underlying value of each share is unchanged. Additionally, buying back shares will improve price/earnings ratios due to the reduced number of shares (and unchanged earnings) and improve earnings per share ratios due to fewer shares outstanding (and unchanged earnings).

If the market is not efficient, the company's shares may be underpriced. In that case a company can benefit its other shareholders by buying back shares. If a company's shares are overpriced, then a company is actually hurting its remaining shareholders by buying back stock.
(source: Wikipedia)

In Ashtead's case the average price per share repurchased to date was only 2100p, and the remaining shareholders own a bigger share of the pie going forwards, as the company's earnings potential remains undiminished.

Was 2440p for Mater's recent sale not enough for you? :-)

P.S. I have posted this information in response to the question you posed, I have no intention of reopening the 'buyback' discussion again :-)

[bracke] 03/1/2020 14:22

Good day uppompeii

NEVER!!!

Dog with a bone.

[uppompeii] 03/1/2020 14:08

Let it go bracke...let it go...

[bracke] 03/1/2020 13:52

Good day perfido

Given the cancellation of shares would I be naive in thinking that there should be an upward re-rating of the SP?

[perfido] 02/1/2020 15:12

RNS today confirmed cancellation of AHT shares in Treasury from buyback (9% of issued share capital), as anticipated.

[perfido] 02/1/2020 15:04

bracke

Indeed!

[fenners66] 02/1/2020 11:18

It was more than a little obvious !

[bracke] 02/1/2020 10:59

Good day perfido

You probably realised my 'rights issue' comment was aimed at shaking fenners out of his Christmas/New Year torpor.

[perfido] 02/1/2020 09:58

Good morning fenners

Quite possible. AHT currently yields 1.68% ( ) under a progressive dividend policy.

According to this list( ) the current 10th place ftse company, Carnival yields 4.89%

In time you may get your wish, in the meantime, the share price appreciation has not been insignificant to date, particularly if you are not liable for CGT....happy days :-)

[fenners66] 02/1/2020 09:23

I would certainly settle for them being in the top 10 by dividend growth over the next 10 years.

That's possible.

[perfido] 01/1/2020 21:22

A rights issue? Really? The mere mention is likely to give some of our readers apoplexy!

It would seem the current capital allocation plan gives ample scope for acquisitions even once the share buyback scheme resumes?

Ashtead will no doubt continue to grow well, but is unlikely to be in the top ten FTSE100 performers at the end of the new decade IMHO.

I look forward to reviewing progress with you in 2030..

[bracke] 01/1/2020 17:08

perfido

I would think AHT has plenty of room for growth considering United Rentals is a lot larger. I don't know about other US rental companies. Surely AHT would still consider expansion through acquisition?

A nice chunky rights issue to fund purchases would seem appropriate given the company finances.

[perfido] 01/1/2020 12:16

Happy New Year bracke and fellow posters

Re 'Will it remain so?..'

The article referenced Jim Slater's assertion that 'elephants don't gallop',implying that established giants simply can't grow fast enough to sustain the highest returns needed to stay at the front of the pack.

Nevertheless AHT is still a keeper for me as part of a diversified portfolio, I tend to think that it is less vulnerable to an end of cycle downturn than it was, since it has diversified into new activities and areas (no advice intended!)

[bracke] 01/1/2020 11:24

Happy New Year perfido and all

"Will it remain so? The article mentions that only one stock in the current top ten (LSE +1,130 percent) started the decade as a FTSE100 company....."
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Although some of them may have gone out of business maybe others were merged or taken over?

Perhaps the biggest risk is that AHT is a cyclical business. You have to consider where the US is in the cycle.....good luck with that!

[perfido] 31/12/2019 22:41

AHT is identified in today's DM as one of the best FTSE100 investments of the decade, second only to JD Sports, in research by AJ Bell.

JD Sports returned 3,200 percent and Ashtead returned 3,120 percent over the last ten year period.

Will it remain so? The article mentions that only one stock in the current top ten (LSE +1,130 percent) started the decade as a FTSE100 company.....

[perfido] 29/12/2019 06:21

Thanks bracke

[bracke] 28/12/2019 13:13

Well done perfido

[perfido] 27/12/2019 09:47

Re my post 57519, my part sale order was executed this morning at the limit set of 2450p - a nice, but modest little earner :-)

Edit: Happy to buy them back if the price dips appreciably in due course.

[bracke] 23/12/2019 14:01

Good day perfido

I also take the cash route for presents. Far easier and better for the recipient.

Here's hoping for a relatively Brexit Free Year.....but somehow I doubt it.

May all AHT posters and lurkers have a reasonable if not a Pleasant Christmas & New Year.

[perfido] 20/12/2019 18:35

Good evening bracke,

Thanks to you and Mater for your kind comments.

I am not sure the ADVFN figures and volume graph above are correct, I am seeing the volumes for yesterday and today reported as 2,597,172 and 1,748,164 respectively elsewhere.

Nevertheless, if my limited 'limit order' remains unfulfilled I m happy to add the small number of shares involved to my core holding in the short term.

As for Xmas shopping I avoid it like the plague. In my immediate family circle I have declared my home as a Xmas Present-free zone, and have addressed expectations by giving 'the gift of choice' to family members, they get cash, and get to choose how to use it.! Problem solved!

Best wishes to both Mater and yourselves, I hope you and the rest of the AHT posters enjoy a peaceful Xmas and a prosperous New Year. :-)
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[bracke] 20/12/2019 18:14

Good day perfido

Mater and I wish you well with you part sale.

Interesting to note the volume yesterday and to-day, the small range and where the share price closed. It suggests to me more selling than buying so maybe a retrace is on its way.

Have a pleasant weekend which assumes you are not venturing to the shops.

[perfido] 20/12/2019 17:50

bracke

Mater, has somewhat ungraciously I thought, suggested that you maybe a 'one trick pony'. I have assured her that you are probably good for 'two tricks'.
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In view of Maters curmudgeonly comments, I have gone for a second trick, I have placed a 'limit' order to sell the small number of shares I bought on 10th Dec (2195p) at 2450p - missed the boat today, but the limit order expires 7th Jan 2020.

I am sure Mater will wish me good fortune...

In the meantime my core AHT holding remains intact.
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[bracke] 19/12/2019 16:10

Good afternoon 2flat

It's nice to win one occasionally.

I suspect most of us are thinking when are the US Markets going to take profits. The problem is that thanks to the FED there is so much money available finding a home for it is difficult.

The FED with Mr Trump's full approval, continue to pump money into the system and still he wants more plus a reduction in interest rate. When and how does it end?

[2flatpack] 19/12/2019 15:32

Afternoon bracke

Congratulations, on the nose as usual.
Its scary.
Cheers