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Every Ashtead investor's worst nightmare: SP nowhere to go and a sub-1% dividend.
But with the buybacks (£500m per year) the shareholder return is nearly 3%.
And they intend to double in size (again).
And when they finally run out of room to grow they can just ramp up the buybacks.
fundamentally its fine and will be so for the next 5 to 10 years. so look at the charts, it cant even move below the 50 dma when it pulls back. until it does dont try to pick tops or you will be burnt. follow the trend until the trend changes.
They're good figures and the business has remained incredibly robust through lockdown. However, the price has also more than doubled over the period, so do we think prospects have really improved that much versus pre-Covid environment. Still a lot of good news incorporated into the price to me. My suspicion is that the stock hangs around this level now for a sustained period, or perhaps, we see some pull back. I realise that calling time on a fan favourite like this stock is a tricky call, but I do think there are better opportunities in the UK market currently. GLA to all long-term holders, and well done though.
Regarding trading yesterday.. 'they' were probably just thinking down the lines of "time to move on" after AHT stella performance .
...a little bit nervous before opening this morning after seeing what looked like huge selling after closing yesterday but looking positive at the moment. Decent RNS about forecasts, etc. Still confused about those trades yesterday though ?? Any ideas folks.
..full year results tomorrow, Tuesday . Maybe someone knows summat ?
I thought it has started recovering today but looks like there are many huge after market sell trades. :-(
Yes both AHT and URI are down, maybe it's just reaction to the news that the Biden infrastructure bill is running into political difficulties.
It's worth remembering that if AHT directed its free cash flow to share buybacks instead of growth, it could buy back half its shares in less than 10 years. All the while increasing the dividend.
Anyway, results on Tuesday.
On the whole we follow URI as that is the largest rental company in the U.S and Sunbelt the second. URI have fallen over 8% this week while Ashtead have only lost 3.4%.
I'm not concerned about Deutsche 's downgrade, they constantly downgraded AHT during its meteoric rise.
Why is that any company I buy goes in correction, Its definitely a correction a I got stuck in HLMA november last year, only now after a year I have returned to minor profit. Still stuck in TM17, and now I have bad feeling I am stuck here too :-( . Enjoy your profit those who purchased at lower price.
I suspect you mean de-rate, but I understand your point. However, AHT did not grow last year, it shrank, and it will now need to grow extremely fast just to get back to previous levels of activity. Any slight disappointment will see a sharp retraction. This happened in 2016 when the stock fell from £12 to £8 - I remember this well as that's when I bought back in. The stock is on a tech stock multiple, but tech stocks actually grew in 2020. Like a say, a great company, but at this level, I fear the risks are on the downside. I would certainly look to buy back in below £40 (should it ever get there!!).
secular growth for many many years and for well entrenched growth paths you have to pay up. if growth slips then the shares might re rate. until then they will continue to enjoy a premium to the mkt but arent expensive for the growth you are getting. the mkt in the states is still young, the shares could easily double from here over the next few years. if not it will mean they have been taken out by a comp.
If ..everyone started to sell because a company had a few days of a falling price then they shouldn't be investing in the stock game at all. As I've said before... nothing goes up in a straight line. Also,as Matt has said before.... the numbers were quoted weeks ago and sp keeps rising. Now, we have a broker saying reduce to hold . Did this influence people to sell? Who knows. The vast majority on here will **** the brokers opinions all day long. If people still believe, by their due diligence, then this is an opportunity. GLA
....but is fundamentally over-priced at this level in my opinion. Even if we assume they can attain a Q4 eps of 50p (that's 50% above Q4 2019 when there was no pandemic), this leaves the stock on a PE of 30x. I think 20x or £35 would be a fair price. The market has fallen in love with AHT, no doubt, but sometimes love is blind.........:-).
A little bit extra on the divi would be nice as well, if only to bring it back to 1%. Results on 15th June.
Very few will sell out here while the company continues its buy back programme. So that alone will keep driving the price up.
Personally I think while this strategy runs we will keep rising. The danger is that the company is overpaying for shares and creating the start of a bubble.
On the other hand it could still keep going up, which is why I continue to hold here.
..profit taking this morning I reckon. Nothing goes up in a straight line but this is pretty close. Regarding a correction.... some sort of it will happen eventually to them all but no crystal ball here, unfortunately. GLA
I notice that the S.P. is shown as £52.50 on the company's website.
There is definitely something going on. Bid?
Strange movements in the share price this afternoon. 2 share price monitoring extensions were triggered when the price rose above £53.
...and on. I was trading this 10 years ago and then stopped for what I thought at the time was a better deal.
If only I'd....well, you know the rest.
6 months ago,people said it was overpriced, 5 months ago ,people said it was overpriced, 4 months ago....and so on......and today ?.. a new high. However, I'm getting a bit edgy now but again, like others, I thought that at £42. Keep going that's all I can say. :-))
I have to agree with you Matt. However, I've only reduced to 4% of my portfolio. I refuse to sell all of my holding in such a well run company. Will keep holding around the 4% level for the foreseeable future.
I agree with the correction potential, but I thought that at £42, so what do I know!!! Well done to all those who hung in there, but it does look a bit overpriced to me!
Interesting view from the charts . I am holding because I think the fundamentals of the business are great , namely the booming us economy and further stimulus promised. Interesting to see what happens.
I think this stock is due for a big correction because of following reasons:
Price is moving upward from the past 7 months and now has been above its 200 week MA by more than 100% (definitely an outlier)
Monthly Relative price strength i.e. RSI is 83 (overbought)
Volume is shrinking.
Strong pound would shrink the earnings.
....I meant to say that if it was limited to 5 or 10% then it wouldn't bother me. Lots more to come although I've been reading that Biden and the Republicans are still deciding on the infrastructure package.....but they're bound to aren't they. It's what governments do innit and it's a pain. Still, that's democracy for ya !!