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By Malcolm Stacey | Thursday 28 July 2016
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.
Hello Share Screechers. It’s possibly time we looked at a share in the fabulous ‘slow, steady riser’ category. In some ways Ashtead Group (AHT) is a rather odd company to put our trust in. It is a Footsie firm and yet what it does is not very interesting. It hires out tools and plant to builders. And yet it has grown over the years and now has a market cap of very nearly £6 billion. And yet the PE Ratio is just short of 15, signifying that the share is still not expensive.
I bring Ashtead to your attention again because it has just breached its all-time high and is now over 1200p a share. In February, the share was only 805p. Before that it has a history of moving slowly upwards, giving the classic ‘ascending mountain' shape to the graph.
Its operating profits have risen steadily and strongly for at least five years. And there are not many Footsie members that have managed to do that.
I hold a shedload of these lovely shares. Sadly I sold about half my holding many years ago when they were about 300p, otherwise I would be much better off today.
But why should Ashtead continue to do so well when many investors are currently fighting shy of anything to do with the building trade? (They’re still worried about Brexit, though I think their concern is misplaced.)
Well Ashtead is distanced from the Europe effect by its big presence in Asia and America. I cannot even see it being hit by Donald Trump winning. And maybe Ashtead tools will be needed to build that wall across the Mexican border.
But seriously, Ashtead has a cracking management, which know how to make hard cash. I expect it to keep up the good work - and the share price to reflect that.
So say we all in the Punter’s Return.
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