Ashtead Share Discussion Threads

[fenners66] 09/1/2020 12:35

Bloomberg just suggested that "US Cyclicals" will raise EPS by 15% in 2020 outperforming the rest of the market

AHT are a cyclical are they not ?

[bracke] 07/1/2020 15:58

perfido

Yes I know but remember I'm biased!

I presume that Barclays are forecasting a large rise in earnings either organic or by acquisition.

[perfido] 07/1/2020 15:50

Bracke

Come, come the buyback may be one aspect, but you are ignoring all the other factors that contribute to Ashteads performance, hence we need to see the full text before passing judgement.

Q3 results are due 3rd Mar

[bracke] 07/1/2020 15:43

perfido

Thanks for information.

2396.5 to 2430 is an increase of 1.40%. Not very onerous.

I too would be interested in the Barclays reasoning. AHT would have to buyback a very large quantity of shares to increase the share price by 31.5%.

[perfido] 07/1/2020 15:31

Good day bracke,

Previous forecast made: price was 2444 27th Nov 2019 reiterated

I would be interested to read the full Barclays Capital opinion if anyone has access?
(It seems that it mentions the buyback and I am interested in their view)

[bracke] 07/1/2020 15:16

Good day perfido

Can you remember what the share price was when the 2430 forecast was made?

"Oh ye of little faith"
======================

I did not post that 3195 would not be attained. My point is that banks/brokers etc make such forecasts without giving reasons or when the forecast will be met.

Bear in mind that 2430 to 3195 is an increase of 31.5%.

I can well imagine the posts on this thread if I made such a forecast without rhyme or reason!! Even when I an Elite Guru provide superb reasoning with chart analysis I am still subject to ridicule and castigation.

[perfido] 07/1/2020 13:49

Oh ye of little faith, Barclays previous target of 2430 was attained in short order.
(Edit removed)
.

[bracke] 07/1/2020 13:12

"Eventually"..... is that about as long as a piece of string?

[demo trader] 07/1/2020 10:57

Eventually but Few percentages better than astrology.



Good day demo

I bet they didn't say when! They never do.

[bracke] 07/1/2020 10:52

Interesting price moves on what appears to be very low volume.

[smcni1968] 07/1/2020 02:50

BARCLAYS CITE SHARE BUYBACK AS POSITIVE FACTOR BEHIND TARGET PRICE BOOST

[smcni1968] 06/1/2020 21:51

ASHTEAD GROUP PLC AHT.L: BARCLAYS RAISES PRICE TARGET TO 3195P FROM 2430P

[bracke] 06/1/2020 14:25

Good day demo

I bet they didn't say when! They never do.

[demo trader] 06/1/2020 13:47

Barclays Capital has 3195p target.
2382p at the mo.

[hydrogen economy] 06/1/2020 04:12

"assuming that the cash amount available for dividend is unchanged or greater"

Presumably the sum available will be reduced by the cost of servicing any additional debt incurred for buy-backs.

The Group’s debt facilities are now committed for an average of six years at a weighted average cost of 4%.

The dividend yield and annual saving is around 2% of buyback spend with cost at 4% of that spend. I do not expect that the dividend will be correspondingly reduced.

Personally I would not see dividends as the basis to make investment decisions for a growth business like AHT, keeping dividends well covered by cash flow gives flexibility to take advantages of opportunities when presented. A similar argument could be made against buybacks, though they are easier to switch off, not something which can be said of the debate.

[perfido] 03/1/2020 17:01

bracke,

Re: the dividend has been increasing by approx 21% over the past three years. (Compounded!!)
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I'm thinking mid-twenties for the full year dividend, provided performance holds up. Perhaps you could start a guess the divi competition?

Edit: Its worth bearing in mind that the shares in Treasury do not qualify for dividends so the 'dividend payment' saving was harvested from when the shares were taken into Treasury (Dec 2017 - Dec 2019), not when cancelled.
.

[bracke] 03/1/2020 16:42

perfido

As you show the dividend has been increasing by approx 21% over the past three years. Taking into account the reduced number of shares it would not be unreasonable for a sizeable increase. Doing a quick and dirty calculation perhaps an increase of 30% would seem about right.

[perfido] 03/1/2020 16:14

bracke

Re: 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?
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Yes, this is what I alluded to in my 'greater share of the pie' comment, given time.

However it is worth remembering that we are already benefiting from AHT's progressive dividend increase record:

Year...Interim..Final..Total .Growth
04/2020 7.15p tbc
04/2019 6.50p 33.50p - 40.00p 21.21%
04/2018 5.50p 27.50p - 33.00p 20.00%
04/2017 4.75p 22.75p - 27.50p 22.22%
04/2016 4.00p 18.50p - 22.50p 47.54%
04/2015 3.00p 12.25p - 15.25p 32.61%
04/2014 2.25p 9.25p - 11.50p 53.33%
(Source )

Not too shabby, and probably better than most of us recall.

[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?