Ashtead Results

16th Jun '15 by WarrantStar

14 comments 11440 reads

Today results were released for the year to end April 2015.
Results included:
Turnover up 24%
Statutory EPS up 31% compared with a only 5% forecast increase in normalised EPS.
Can anyone explain why the share price has fallen by 3% ?

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About the Author

WarrantStar

Premium Member

I am a keen & experienced investor. I love my spread sheets, and like to think that I know what I am doing. I wouldn't be offended to be described as a bit geeky. Mostly I do well, but I always strive to do better. Married male. Born 1957 England. Good career in industry for 35 years. Been successfully investing for about 30 years. I chose to retire from salaried employment at age 57 to look after my investments. I consider myself to be quite analytical / logical / mathematical, but also take into account how the world is likely to change & how people behave. I always follow my processes before taking action. more »

14 comments

Ramridge

16th Jun '15

I have a small holding in this company and so looked at the results carefully.
Broker forecast normalised eps = 61.8
normalised eps announced today = 60.1
The eps results are therefore in line with expectations.
Why the drop in price? I can only put it down to the Greek tragedy that is sucking markets down around the world.

Rusty2

16th Jun '15

I used to hold until recently, sold out at 1177p, results look good but often if they don't beat the forecasts people sell up, seen it many times. Yes the general market falling has not helped either. I think they will bounce back maybe tomorrow. I will be interested to see how the SR changes to reflect the new figures.

WarrantStar

16th Jun '15

That may have the makings of an interesting strategy. If a company announces strong results, but the share price falls because it has just missed the forecast, it suggests that it would be a good time to buy (after doing the necessary research).

Rusty2

16th Jun '15

Yes but it does not tend to fall that much, maybe 2-3%. Unless they miss the target by a margin. I think a lot of investors expect the results to exceed the targets when they don't they are disappointed. Always good to have comapnies on watch lists, can do it on here, then if they do fall you can act.

WarrantStar

17th Jun '15

Ashteads margins are improving and they are making big gains in their market share. Like for like rentals are well up. Stockranks will be well up next week, once the results have been taken into account. So I have just topped up my holding.
If there is anyone on here who has sold Ashtead on these results, to move their investment into a better opportunity, then please can they let us know what the better opportunity is?

iwright7

18th Jun '15

My summary notes following results: Strong Q4 with no May dip (as reported by United Rentals) and taking business from other US rental companies. Results slightly below 2015 broker forecasts. 2015 sales revenue up 25% and EPS up 30% so operationally geared. Strong outlook with possible upgrade. Low PEG 0.73, but FCF likely to be -ve due to capital investment. Growth company with further to go. Ian

Rusty2

18th Jun '15

I see Ashtead (LON:AHT), SR has gone down to only 41. Seems a bit low? Momentum has gone down from 65 to 43. Does anyone known the EPS normalised?

WarrantStar

18th Jun '15

Hi Herbie47
For EPS normalised please see Ramridge's comment number 1 above.
I think the stockranks don't currently mean much until the results in the table on the stock report page are updated with the new 2015 figures showing as results rather than estimates.

Rusty2

18th Jun '15

I see, so the EPS n is only up 1.2 from 58.9 which seems low considering the EPS is up 30%.

iwright7

19th Jun '15

Significant Broker upgrade today: "Exane BNP Paribas lifts Ashtead Group to outperform from neutral, target raised from 1200p to 1300p".

Rusty2

19th Jun '15

Can anyone explain why the EPS normalised has only increased by 2%?

WarrantStar

21st Jun '15

The actual normalised EPS outcome for 2015 is shown as 78.2 here on Stockopedia, with 77.6 as the new forecast for EPS for 2016. There are 15 brokers providing forecasts for this share. My conclusions are:

1) Broker forecasts should be ignored by intelligent investors with enough time to conduct their own research
2) Forecasts for 2016 EPS will be upgraded and their only use is as a gauge of market sentiment.
3) Ashtead share price will rise following 5 years of very good results and a strong outlook statement.

What is your opinion?

Rusty2

21st Jun '15

So the latest figures have been updated on SR, but the ratings have not gone up, maybe there is a delay? If not then I don't really understand it. Also SR EPS n is 78.2 but the other figure is 60.1? Are SR using a different system? My opinion its a good company I sold out a few weeks ago but looking to buy back in if sp drops some more. Negatives: Gearing is quite high and some exposure to any downturn in USA.

WarrantStar

21st Jun '15

I guess that the changes to the stock ranks will follow on from the update to the results. I don't know how long that takes.
For the EPS figures I think it is as follows:

Reported EPS figures are the actual ones with no adjustments allowed.
Normalised EPS have adjustments made according to standardised accounting rules to enable comparisons between different years or different companies.
Underlying EPS contain adjustments which are chosen by the directors so as to put the results in the best possible light. There are no rules about this. Every year an unscrupulous company will do it a different way.

Maybe I haven't got that quite right. If not then someone please tell me where I have gone wrong.

Yes Ashtead is certainly a cyclical company.

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Ashtead Results

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WarrantStar

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