Ashtead Share Discussion Threads

[discodave4] 27/5/2020 20:41

Hi fennersAgree, but IMO that is unlikely to come to fruition, if at all, until 2021/22, so for the moment this looks pricey. That said it's not the only one.Will be interesting to see what their outlook is when they issue year end/Q4 results next month.HSS reported today that their Q2 (April to date) Rev was down 40% so imagine A Plant will be similar.

[fenners66] 27/5/2020 20:14

Agreed Dave its a surprise that share price has recovered so much.
URI up around $142

The other potential explanation is that the US govt finally gets around to the fabled infrastructure spend to try and rescue their economy.

[discodave4] 27/5/2020 18:07

Sorry meant to add, they have already said that underlying profit before tax will be about 5% below last year. So unless I'm missing something, a share price 15% higher than this time last year with a major recession looming suggests to me it's got a bit pricey.

[bracke] 27/5/2020 16:46

Good day Disco

I see you have been awarded a couple of 'thumbs down'.

Your 'negative' post, even if true, will be unappreciated by some.

It's not just this share price which might be considered "a bit ahead of itself". When the state of economies, debt and redundancies is considered the market would normally be expected to be in a bad state BUT......it's The Fed to the rescue pouring cash into the market as if it were water. Remember they can keep doing so ad infinitum.

I think it's fair to say that no one knows how it will eventually end.

EDIT

The gap down to 2300 remains unfilled so time for a short unless you think it's a breakaway gap.

[discodave4] 27/5/2020 14:14

Hi chapsIs it me or has this got a bit ahead of itself?It's only about 10% below all time high and do think year end will show a decline in earnings (quick calcs I have about 163p).

[2flatpack] 26/5/2020 22:11

I noticed that and had a small short, hoping for a quick trip to the dentist.
Cheers

[bracke] 26/5/2020 11:54

A gap up to resistance.

A gap fill or hold above 2413?

[bracke] 19/5/2020 10:56

The share price duly returned to the top of the range and managed to pierce it courtesy of the vaccine news from the US but has since dropped back. The rise filled a gap at 2277 from 5-6 March.

If more good news is forthcoming it will assist in breaking out to likely resistance at 2413. If not, back to bottom of range at 2100 is probable.

[smcni1968] 18/5/2020 14:49

Morgan Stanley downgraded it today having upgraded it at the peak

[yertiz] 18/5/2020 14:43

Mr Market has taken S&Ps downgrade badly....🤪

[amaretto1] 18/5/2020 07:02

Late Friday .. u need to check.

[smcni1968] 17/5/2020 21:50

S&P mentioned Ashtead as a company at risk of being downgraded to junk sometime in the future- they didn't actually downgrade them

[fenners66] 17/5/2020 16:36

From the AHT website :-


Credit ratings and debt information

Current credit ratings for Ashtead Group plc are set out in the table below:
Standard & Poor's
Long term BBB- (negative outlook)
Moody's
Long term Baa3 (stable outlook)
Fitch
Long term BBB- (negative outlook)


Funding and liquidity
The Group funds its operations through a mixture of equity and debt. Debt facilities include bank and capital markets borrowings.

The Group targets leverage in the range of 1.5 to 2 times net debt to EBITDA (excluding IFRS 16) over the econonic cycle.

The table below summarises the main facilities available:

Available finance
Facilities available Maturity
Asset-based first priority secured bank debt $4,100m 2023


Issue
Principal Coupon Maturity Amount
in issue Coupon date*
Second priority $600m 4.125% 2025 $600m 15 February / 15 August
senior secured notes $600m 5.25% 2026 $600m 1 February / 1 August
$600m 4.375% 2027 $600m 15 February / 15 August
$600m 4.00% 2028 $600m 1 May / 1 November
$600m 4.25% 2029 $600m 1 May / 1 November

* The coupon is paid by the Company to the trustee of the bond on the date show above.

As at 31 January 2020, the Group had net debt of £5,443 million.

[fenners66] 17/5/2020 16:34

Have you got any details of a new rating ?

[fenners66] 17/5/2020 16:34

I found this from April - though I guess it can be out of date....



S&P Global Ratings upgraded its long-term issuer credit rating on Ashtead Group PLC to BBB- from BB+ and maintained a stable outlook.

The upgrade reflects the rating agency's expectations that a favorable U.S. equipment rental market and increasing market penetration will keep the company's earnings steady, which are estimated to grow by around 12% to 15% in 2020 and 2021.

Additionally, Ashtead's conservative financial policy is expected to support its fiscal targets. S&P Global Ratings estimates the company's funds from operations-to-debt ratio at comfortably above 45% and debt-to-EBITDA below 2.0x, in line with its BBB- rating.

The agency maintained a stable outlook on anticipation that Ashtead will continue to strengthen its market position in the U.S. and register a strong operating performance for the next 24 months while keeping a balanced capital investment level, positive free operating cash flow and stable EBITDA margins.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.

[amaretto1] 16/5/2020 15:01

S+P have rated Ashtead junk status on Friday afternoon.Not sure consequence .. unless needing restructuring or cash.

[bracke] 14/5/2020 17:52

Ref Post 57998

It was a retest of previous support at 2111.

So where now? It's in a 2100-2300 range so logically it should rise back to 2300 if the trend is to continue. However 'market logic' is not always what we think it should be, more especially with President Trump. A few weeks ago he was bemoaning about a strong $ now he is saying a strong $ is not a bad thing!

There is thinking that more QE is on the way from the FED but they may not act until they have a good reason to do so, particularly as the Democrats have suggested another $3 Trillion should be pumped into to the economy now.

The share price needs a reason to break up out of the range, QE would probably do it but failing that a fall below support becomes the likely probability.

[hydrogen economy] 12/5/2020 13:42

bracke

There was optimism when infrastructure spend was promised 4 years ago, seems now like a forlorn hope.

[bracke] 12/5/2020 12:26

The share price is back to its recent high of 30 April so it's decision time. Push on to the next target at 2413 or drop back to support at 2111.

[bracke] 12/5/2020 11:31

Good day hydrogen

Perhaps an addition to 'The hopes'

In an effort to reduce unemployment and get the economy moving Mr Trump will invest large amounts of $ into the infrastructure which will benefit AHT.

The danger is that he will repeat his previous strategy of pumping the markets and leave the economy largely to itself.

[hydrogen economy] 12/5/2020 04:35

AHT at 2268p feels like a lot of hope has been priced in and the risks largely swept under the carpet.

Trump is clearly determined to smear as much lipstick on the economic pig before November’s beauty pageant as he can, he’ll reallocate blame for any consequences later. Longer term issues might not feature highly in what passes for his thinking.

The hopes
-Early return to normal working in US with no big spike in infections.
-Unemployment will drop almost as quickly as it spiked
-Government handouts/support will stop the short-term economic harm feeding back
into a downward spiral and depression.
-Vaccine, therapeutics or drain-cleaner will make COVID less of an issue.

The risks
-Many retail and hospitality businesses are likely to fail.
-Unemployment reported at 14.7% but expected to go higher.
-Business failures will slow down the re-employment, Unemployement and lack of spend
will push more businesses to the edge.
-If opening leads to a spike in cases/deaths, lockdown may need to be reinstated tighter and
longer which would do longer term damage.
-A more virulent second wave as seen in 1919
- Throwing $3 T+ and counting at the economy might turn out to have some downside

If we take the best case leading back to the 2800 all time high and a bad case say 1200, as a binary comparison, current price implies a 66% chance of the good outcome. The glass does not feel two thirds full to me, I have sold and will watch for a cheaper re-entry.

[ygor705] 05/5/2020 12:33

BH has been, and probably still is, a very shrewd investor. His main problem is driven by his own success.......size. One wonders why he doesn't just retire and have fun with his mates investing in local start ups and smaller companies. That's how he started and that's what he's best at. His biography which came out several years ago now is a good read. I wish him well.

[fenners66] 04/5/2020 13:16

"Amusingly, after wasting much digital ink bashing buybacks in his annual letters, Buffett went off on a rant defending buybacks "


I had not studied BH before yesterday - I knew about it of course.

I have to say it took about 10 minutes to work out the modus operandi, and just why buybacks have to be central to BH.

Today I read the report above and it states that :-

"There is a more simplistic explanation of Buffett's style of investing at least in recent years: he will buy the stock of companies that engage in massive buybacks, such as Apple, even though his annual letter bashes companies that buybacks stocks, and he will dump all companies that halt buybacks, of which IBM is the most famous example."

As I said yesterday - its pretty obvious if you are buying multi-billion stakes in a company you are going to need a market you can sell into otherwise you will sink the share price on your own holdings.

Self interest a great motivator......