Ashtead has been a very good recovery stock.One to watch leading up to results 13th December and beyond.

From the Blue Index Blog

Ashtead Vulnerable
May 11th, 2009

The signs are there that things may be bottoming out for the housing market and in particular housebuilders. Plant hire group Ashtead (AHT) has fared well in recent weeks, as the fortunes of its business depends heavily on the strength of the construction sector.

But this morning the group warned the markets that it expects underlying full year pre-tax profits to 30 April 2009 to be within the lower end of current forecasts. Added to this the group said recent rental rate and revenue trends suggests that profits in fiscal 2009-2010 are also likely to fall below the boards earlier expectations. Although rental volume continue to hold up well, and in line with expectations, as expected, construction markets in the UK and US are weaker with private sector projects particularly impacted by the shortage of funding. The Ashtead board alo said it had reduced net debt by GBP100m to GBP1.04bn, and it remains highly confident in its strength for the longer term.

Full transcript here
http://blog.blueindex.co.uk/2009/05/ashtead-vulnerable/

The debt is 4x the Mkt Cap . . . (DYOR), grief this is a dull business - and I don't think the "Housing Market" is ready to jump-start too soon.
First, there are plent of reposessions available for anyone with cash.
Second, there are few mortgages available, esp for properties not yet built (which increases risk and makes a forced-sale quite difficult)
Third, AHT is a supplier of kit that is lying about on many sites, or which can be picked-up on the cheap. . . . . . yet in reality there are plenty of "stopped" building sites if there should be anyone daft enough to want a new house quickly.
Finally, the housing market was in "bubble" territory for the last 5+years IMHO - and until prices fall further there will not be a restart . . . . sadly there are also many B2L properties about to be dumped on the Market - as amateur landlords are squeezed dry by falling rents, arrears, etc. while the Landers demand regular payments.
AHT may be a Bellwether for construction, but once the London-Olympic Joker is played-out there is only Crossrail.

Ashtead Group target moved to 1.10 from 84p by RBS

strong support at 80p, looking good for a quick move to 83p before the next leg up which should be next week, if not later today IMHO

Lovely chart with previous resistance points overcome and new highs within breathing distance.

Should go on from here to form a uptrend channel:

4 bullish Brokers with buy recommendations recently........

1. Broker recommendation full details

Date: 9 September, 2009
Broker: UBS
Company: Ashtead Group


Recommendation:
Raises price target to 120p from 110

InterMarket Stock's recommendation rating:
Buy

2. Broker recommendation full details

Date: 7 September, 2009
Broker: Investec
Company: Ashtead Group


Recommendation:
Raised to Buy from Sell price price target raised to 105p from 40p

InterMarket Stock's recommendation rating:
Buy

3. Broker recommendation full details

Date: 3 September, 2009
Broker: RBS
Company: Ashtead Group


Recommendation:
Retain Buy price target raised to 110p from 84p

InterMarket Stock's recommendation rating:
Buy

4. Broker recommendation full details

Date: 2 September, 2009
Broker: UBS
Company: Ashtead


Recommendation:
upgrade to Buy from neutral - price target 110p from 57

InterMarket Stock's recommendation rating:
Buy

Interim results out tomorrow, 9th March.

TA Analysis from Investtech.........

Very Bullish

Positive Candidate -Medium term, Jun 2, 2010 Analysis Explanation

ASHTEAD GROUP is in a rising trend and a continued rise within this trend may be expected. In addition, the price has now fallen back towards the floor of the trend channel, which should give a reaction up. The stock has support at pence 90.00 and resistance at pence 124. The volume balance is positive and strengthens the stock in the short term. RSI diverges negatively against the price, which indicates a danger for a reaction down. The stock is overall assessed as technically positive for the medium long term.



Period Vol.bal. Volatility Liquidity +/- %
1 day - 2.94% 689.52 +1.95%
5 days 73.43 10.46% 507.89 +9.60%
22 days 35.75 28.84% 368.57 -10.02%
66 days 34.65 59.03% 318.83 +29.55%

Ashtead Group AHT looks like its got a lot of momentum behind it in a nice uptrend channel.



Fairly recent broker Buy Note out aswell with a 160p target.....

Date Broker name New Price Old price target New price target Broker change

28-Apr-10 UBS Buy 120.60p 120.00p 160.00p Reiteration

Profit plunges to 5 million pounds this year from 87.4 million pounds last year.

Ashtead

110p


Questor says BUY

The stock market is a leading indicator. Its movements are, in theory, based on a consensus view of future events. That's why people say "the market is never wrong", even though sometimes it patently is.

This means that shares in a cyclical company rise in anticipation of an increase in profitability before it happens.

On this basis, Ashtead was recommended as one of Questor's tips of the year on January 1.

Ashtead hires plant and equipment to the construction sector, with about 80pc of its business being in the US.

The most significant thing about the company's 2009 results released last week was not that the group saw an 87pc slump in profitability to 5m. The important thing is that the company managed to stay profitable in what was one of the worst years the industry has experienced. This is a credit to the company's management, size and flexibility.

Revenues in the year to April 30 fell by about a quarter, but the last three months of the year between January and April saw a definite improvement. Revenues were down just 3pc on a year-on-year basis.

Of course, there are still major problems in Ashtead's end markets. Geoff Drabble, chief executive, told Questor last week that from February onward the company had seen a "gentle" improvement in the amount of the group's fleet that was on rent, as well as yields.

A gentle recovery in US construction is likely to give a significant boost to Ashtead's margins and cash flow. Last year, 80pc of revenues came from North America, with 87pc of profits generated in the region.

Management have managed the downturn well. Not only has net debt been cut at this challenging time to 829m from 1.036bn over the year but the company bought back 10pc of its equity at an average price of 67p a share.

Usually, Questor is not a fan of share buy-backs. Companies tend to do it when they are generating excess cash in a boom time and the share price is high. This is not as efficient a way of distributing cash to shareholders especially if the share price falls.

However, buy-backs undertaken when the share price is low should have a very positive effect when markets improve. Ashtead got this one right.

The company even raised its dividend payment. The final dividend was 2p, making a total payout for the year of 2.9p, compared with 2.575p in the previous year.

The final payment will be made on September 10 and the shares go ex-dividend for this payment on August 18. The company plans to keep the dividend at a "sustainable level" through the cycle, which is also a good example of the management's prudence.

Ashtead plans to invest 175m of its cash flows in its fleet over the next year to replace the older part of its fleet, to keep the average age of its equipment flat. This is a prudent move.

The shares are trading on an April 2011 earnings multiple of a heady 92.5 times, but this falls to 17.9 in 2012 and 10.1 in 2013. The yield is 2.6pc.

The shares were tipped in January at 81.2p and they are up 35pc compared with a market down 3p. The shares remain a buy for recovery and Questor regards them as one of the best plays on a US recovery although any double-dip recession could hit the shares hard.

The shares are trading on an April 2011 earnings multiple of a heady 92.5 times, but this falls to 17.9 in 2012 and 10.1 in 2013.

And this is rated a buy !!!!!!!!!!

Like you can't find better value elsewhere.

This is still looking expensive at 100p... since it depends much on US economy.
Wait for 80p.

Keep on shorting AHT... 70p target 4 me... don't listen to Questor.

The chart suggests that 90 is as low as it is likely to go,unless the market takes a further nosedive. It is down from highs of about 125 a few months back

This will slide from here as forecast is not as healthy as it seems... 93p now

The 2 year chart suggests a nice move to the upside to 120-125

Given as a bid target and a buy in this weeks' Shares' at 99.9p

Questor share tip: Ashtead is one of the buys of the year

By Garry White
Published: 6:40PM BST 17 Aug 2010

1 Comment

Ashtead

94.65p +4.9p


Related Articles
Ashtead: shares, charts, data says BUY

Plant-hire group Ashtead is one of Questors 2010 tips of the year. The company has difficult end markets but the shares should outperform significantly when the recovery takes hold.

Ashtead hires plant and equipment to the construction sector, with about 80pc of its business being in the US

The downturn could benefit the group over the longer-term. As one of the USs largest players, the company only has a 5pc market share. Smaller players have not been able to invest in their business but Ashtead plans to invest 175m in its fleet over the next three years. It remains profitable and continues to pay a dividend.

There is also likely to be a shift to rental. Companies are renting large equipment instead of buying it as they try to preserve capital.

A gentle recovery in US construction is likely to give a significant boost to Ashteads margins and cash flow. Last year, 80pc of revenues came from North America, with 87pc of profits generated in the region.

One interesting point to note is the relative performance of Ashtead shares and its US-listed peer. US-listed United Rentals has outperformed Ashtead over the past few months and both companies operate in the same market. This gap is likely to close.

The shares are trading on an April 2011 earnings multiple of a steep 65.5 times but the last time Questor updated on the shares this multiple stood at 95. This falls to 15.3 in 2012 and just 9 in 2013. The yield is 3.2pc.

The shares were tipped in January at 81.2p and they are up 17pc compared with a market down 3pc. Buy ahead of the first-quarter update on September 7.

70p on the cards... my target getting nearer.