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Plunge Into Ashtead Before Its Results Next Week.

By Malcolm Stacey | Tuesday 9 June 2015

Disclosure: I own shares in one or more of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Hi Share Sorters. A firm I’m often promoting to your attention is Ashtead (AHT). It’s a very big outfit -on both sides of the Big Pond. It hires out tools and plant, mostly to the building trade.

As I am constantly saying, building is likely to be a top growth industry as the governments of both Britain and the USA find new ways to alleviate big housing shortages.

And what ever you might think about the growth of immigrants to Blighty - and the home-grown population boom - the building industry will benefit.

But as house builders are not always reliable share builders, then you might want to spread the load and not put all your eggs into one basket.

One way of doing this - while still only investing in one firm - is to choose an outfit, which supplies the industry, rather than directly applying it.

So if you buy shares in Ashtead, you hedge your bets and invest in the industry as a whole, rather than individual building firms, like Barratt, say, or Persimmon.

I used to do the same trick with Wood Group (WG.). It supplies the oil industry with equipment, rather than produce the black stuff itself. And it did very well - until the oil crash.

Ashtead reports on June 16th. I think the results will be fairly tasty. The broker Jefferies has a target of £13.65, compared to the current £11.40. It also expects good results on the 16th, driven by a healthy building scene in the USA.

Very recently Ashtead reached £12.20p, so now could be a cheap time to buy.

Yes, I know broker targets can be all over the place. (It’s only when they nearly all agree - which is fairly rare - that they can be given any weight at all.) 

But for several other reasons, Ashtead appeals to me and I’ll continue to keep a large stable of them.

It’s a bit like a stables today in the Punter’s Return.


Malcolm Stacey has been writing about shares for more than 20 years. His first book "The Armchair Tycoon" was first published in 1998 but a revised 2014 e-version is now available. To obtain a FREE copy fill in the form HERE

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  1. Good call! Any other bright tips?

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