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Authoritative Independent Monthly Share Selections Using Technical & Fundamental Analysis

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Ashtead - Hefty broker upgrades

March 2013

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • AHT
  • Price:
  • 485p
Ashtead, the second largest rental equipment business in the US, has enjoyed a terrific run, quickly gaining 146p since last October's buy tip at 339p. This reflects excellent half-year results, which beat expectations and showed a 16% rise in revenue to £355m with pretax profit increasing 56% to £79.3m. Eps were up 53% to 10.0p. The success driver continues to be its US subsidiary Sunbelt, (96% group profit) where a very strong second quarter, with 17% growth in revenue to US$811m, caused a massive 4.9% spike in EBITDA margins to 43.9%. The drivers are an ongoing shift to rental from ownership in the US, so customers can reduce hefty capital expenditure as well as a gradual recovery in rental rates.On the back of this, J ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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