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Wonderful Ashtead Builds on Share Soaring Success and Deserves a Look

By Malcolm Stacey | Wednesday 31 August 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 Toilers. One of the best shares to hold at the mo, in my humble opinion, is Ashtead (AHT). It has burst through yet another all-time new high as I write. And there’s still more to go I fancy. After all, the P/E ratio I have is still less than 16.

The share is a ten bagger in five years. And that is not because of any big leaps caused by take-over rumours, huge acquisitions and the like. It is steady and relentless growth. The best sort of company to support, in my cautious view.

Ashtead is in the unglamorous business of tool and machinery hire to the building trade. So why should it inspire such confidence among share shifters like us?

Well, this is one of those Footsie firms which does a lot of business in the USA. The American economy is doing well at the moment. The reason why the Dow can’t seem to climb past the 19,000 mark, after months of trying, is that there’s a likelihood that American interest rates may go up. But if that happens, it’s a good sign that the US economy is likely to do even better soon.

There are other simple reasons why Ashtead inspires investors. For example, Brexit has left individuals and businesses in a state of financial uncertainty. This encourages hiring building gear on a short term basis, rather than buying it outright. Step up Ashtead.

A big American rival called United Rentals is also doing well in the S&P charts, which is an indicator of how strong the sector is, especially across the Pond.

Sadly for me, this family’s Ashtead shares are all in my wife’s ISA. This is the main reason her portfolio is doing better than mine. 

Ashtead has a first quarter update in a week or so, and we’ll know more then, but on past performance, I have high hopes.

And now let’s all meet up in the Punter’s Return.


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