Ashtead Share Discussion Threads

[bracke] 14/12/2018 15:11

Tested 1700 which held but not a resounding bounce so far.

[bracke] 13/12/2018 13:54

I note the opening gap from 4/5 December at 1776 has been filled today. Now needs to push on above 1800 but it may drop back to test 1700.

[bracke] 13/12/2018 11:09

Good day fenners

Orange squiggle is the S&P 500.

[palwing32] 12/12/2018 20:05

Apologies if this is old news. Just spotted it was yesterday!

[palwing32] 12/12/2018 20:03

Courtesy of the Motley Fool today.The company in question is FTSE 100 support services specialist Ashtead (LSE: AHT). Its first-half results showed a rise in rental revenue of 18% on an underlying basis, with pre-tax profit increasing by 19% to £633.4m. During the period, it invested £1,063m in capital and a further Positive performanceThe company in question is FTSE 100 support services specialist Ashtead (LSE: AHT). Its first-half results showed a rise in rental revenue of 18% on an underlying basis, with pre-tax profit increasing by 19% to £633.4m. During the period, it invested £1,063m in capital and a further £362m in bolt-on acquisitions. This has added 80 locations to its business and contributed to a rental fleet growth of 15%.It continues to see a structural growth opportunity as it seeks to broaden its product offering and geographic reach. It now expects full-year results ahead of previous forecasts, with earnings due to rise by 28% in the current year, followed by growth of 13% next year.Having fallen by 34% since the start of October, Ashtead's shares appear to offer a margin of safety. They have a price-to-earnings growth (PEG) ratio of 0.6, which suggests they may offer recovery potential 80 locations to its business and contributed to a rental fleet growth of 15%.It continues to see a structural growth opportunity as it seeks to broaden its product offering and geographic reach. It now expects full-year results ahead of previous forecasts, with earnings due to rise by 28% in the current year, followed by growth of 13% next year.Having fallen by 34% since the start of October, Ashtead's shares appear to offer a margin of safety. They have a price-to-earnings growth (PEG) ratio of 0.6, which suggests they may offer recovery potential

[fenners66] 12/12/2018 18:40

What's the orange squiggle ?

[bracke] 12/12/2018 17:06

The chart below compares AHT with the S&P 500.

The vertical dashed red line at the left of the chart shows where the buybacks commenced (14 December 2017).

AHT/S&P500 DAILY Comparison

[smcni1968] 12/12/2018 16:36

https://www.cnbc.com/2018/12/11/investors-should-be-furious-3-stock-buybacks-that-went-horribly-wrong.html

[bracke] 12/12/2018 16:03

I note the share price is up 63 points (3.7%) as I type. Might that be as a result of Mr Trump's threat to close down the government unless they give him money for the wall?

[bracke] 12/12/2018 15:48

"Incentivizing these buybacks is stock-based compensation that rewards senior executives for stock-price performance.
====================================================================================

That certainly hasn't worked!

[fenners66] 12/12/2018 14:59

What % of companies that do buy-backs then go on to issue new shares later ?

[fenners66] 12/12/2018 14:58

4. Buybacks That Use Borrowed Money

For executives, the temptation to use debt to finance earnings-boosting share purchases can be hard to resist, too. The company might believe that the cash flow it uses to pay off debt will continue to grow, bringing shareholder funds back into line with borrowings in due course. If they're right, they'll look smart. If they're wrong, investors will get hurt. Managers, moreover, have a tendency to assume that their companies' shares are undervalued - regardless of the price. When done with borrowing, share buybacks can hurt credit ratings, since they drain cash reserves that can serve as a cushion if times get tough.

One of the reasons given for taking on increased debt to fund a share buyback is that it is more efficient because interest on debt is tax deductible, unlike dividends. However, debt has to be repaid at some time. Remember, what gets a company into financial difficulties is not lack of profits, but lack of cash.

[fenners66] 12/12/2018 14:56

"Incentivizing these buybacks is stock-based compensation that rewards senior executives for stock-price performance."

[fenners66] 12/12/2018 14:55

"Buybacks can create a short-term bump in the stock price that some say allows insiders to profit, while suckering other investors. This price increase may look good at first, but the positive effect is usually ephemeral, with equilibrium regaining when the market realizes that the company has done nothing to increase its actual value. Those who buy in after the bump can then lose money."

[bracke] 12/12/2018 14:46

In view of recent postings I thought some may find this of interest.

[bracke] 12/12/2018 10:52

Just a point...How exactly does one decide if the buybacks have been a success?

Increase in SP?

Increased dividend above and beyond the normal?

These two metrics may simply be due to market forces and other factors. On the evidence so far neither apply.

[riley109] 12/12/2018 09:30

The only Bot at play here is a Maybot.

[discodave4] 12/12/2018 08:27

Must be bots/shorts at play here?.

[discodave4] 11/12/2018 22:46

Some interesting broker comments (see below from Sharecast).Comforting to see that Peel Hunts eps forecast is 178p, which is about what I thought (180p) based on today's results.........think I'm learning!.lol.(Sharecast News) - Brokers have backed Ashtead Group's booming US business, after the rental company posted a strong set of interim numbers and upped its full-year targets. Interim pre-tax profits at Ashtead, which loans industrial equipment such as diggers and other construction tools, surged 25% to £610m, while group rental revenues were ahead 18% at £2.04bn. The group also struck a bullish note for the health of the wider construction sector and said it expected to beat its own expectations for the full-year. Most of the growth has come from Ashtead's US division Sunbelt, which has been investing in equipment and expanding its Canadian presence. Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: "Ashtead is one of the most heavily US exposed businesses on the UK stock market, and as Trump's America enjoys a tax cut-fuelled investment boom, that's stood it in great stead. Investment has dramatically increased the kit Ashtead has available for rent and both the US and Canada have seen the amount of equipment on rent at any one time increase." Hyett warned that higher investment meant debt had reached £761m, leaving Ashtead "more vulnerable to a downturn". But he added: "Overall it looks like Ashtead's bet on US growth is paying dividends, and there is little sign in these numbers that the boom has run its course." Analysts at AJ Bell said: "The US is a key focus for Ashtead, where construction spending is growth faster than GDP, driven mainly by private non-residential building and big infrastructure profits. "Ashtead consistently invests in its existing business and also makes bolt-on acquisitions. This is driving high rates of growth and the company is also managing to remove costs." RBC Capital Markets, which has an 'outperform' recommendation on Ashtead and a price target of 2,800p, said: "The market is clearly beginning to discount the end of the cycle in the US." But it reiterated its recommendation, arguing that much of the risk was already being factored in. "We certainly don't expect to see a significant deterioration in US non-residential construction markets during 2019 - order backlogs remain at record highs. "We also continue to question if the relentless focus on this one data point is valid, given the weighting of Sunbelt revenues is now outside of construction in the US." Andrew Nussey, analyst at Peel Hunt, which has a 'buy' recommendation, said: "We anticipate increasing our April 2019 pre-tax profits from £1.075bn (consensus £1.048bn) to £1.1bn, to give earnings per share of 178p. We have left currency unchanged for now, but this could add a further 2%. Shares have been weak on wider macro concerns and continue to offer value on 8.4x April 2020 EPS, given growth, quality and positioning. We maintain our target price of 2,500p to reflect the momentum and upgrades." Charlie Campbell at Liberum has a 'buy' and 2,390p price target on Ashtead. He expects consensus pre-tax profits to rise by around 3% on a constant currency basis or as much as 7% if sterling/dollar fluctuations are taken into account. "Investment in fleet, share buybacks and the dividend all speak to confidence of management in outlook," he added. After Ashtead's shares lost a third of their value in the last three months, Richard Hunter, head of markets at interactive investor, added a cautionary note. "There have been more recent concerns of an imminent downturn in the US construction market - and, for some, the economic situation in general - which has led to an erratic performance of late in the major indices. Coupled with Ashtead's exposure to an extremely cyclical market and an acquisition nature, which brings potential execution risks, the shares have been pounded even if the company's performance is painting a different picture. From an investment perspective, the dividend yield of just over 2% is unremarkable."

[smcni1968] 11/12/2018 22:29

• United Rentals (NYSE:URI) is up 3.1% in postmarket action following updates from its investor day, including resumption of a share repurchase program.• The company reaffirmed 2018 full-year guidance, for revenue of $7.89B-$7.99B (vs. consensus for $7.91B), EBITDA of $3.815B-$3.865B, cash from operations of $2.725B-$2.875B and free cash flow of $1.25B-$1.35B.• For 2019, it's guiding to revenue of $9.15B-$9.55B (above consensus for $8.93B), EBITDA of $4.35B-$4.55B, cash from operations of $2.85B-$3.2B, and free cash flow of $1.3B-$1.5B.• It's resuming a $1.25B repurchase program that it paused on Nov. 1, to focus on integrating its acquisition of BlueLine. About $210M worth of shares were bought on the program through Sept. 30; the company intends to wrap up the full program by the end of 2019.

[discodave4] 11/12/2018 19:16

Guys,Please can we park the issue once again on the buybacks. I respect all of you and your views but can you also just respect the fact that you cannot please everybody all the time and we each have a right to communicate our views - but this is just going over old ground again and tbh it's getting boring - sorry and no offence intended (but it is!).DD

[fenners66] 11/12/2018 18:54

Since I have seen the virtues of investing in a well-run successful company for almost a generation I will not be needing any help with that , thanks.

As has been said before you can admire a lot about a company and benefit from it - but you do not have to agree with everything it does.

A company's shareholders should constantly scrutinise the directors' decisions and actions - that's our job.

When that does not happen things can go pear shaped - look at Persimmon for example you know there are many others....

So you would ignore the outcome of £ 425m being spent .

We know what the outcome of £425m off the debt would have been !

Roughly what £25m a year saved in interest and no need to renegotiate the next debt tranche before time with the associated "exceptional costs "

We know we do not see eye to eye on buybacks - but there have been no facts aired to show me any benefit whatsoever...