Ashtead Group falls 2.3% from 14-day high 11 January 2019

NEWS BITES - EUROPE

Ashtead Group PLC (L:AHT), the 4th largest Support services company by market cap in the United Kingdom, was down 2.3% from its 14-day high of GBX1,927.50 on January 11. Its Williams % R is -12.5 which suggests it is overbought, a bearish signal. Its Relative Strength Index [RSI] is 74.6. An RSI reading of between 70 and 100 suggests Ashtead Group's stock is close to its 14-day high, which is also a bearish signal. Ashtead Group's stock price has decreased GBX1.50 (0.1%) from its last trading session of January 10 to close at GBX1,883.0. Compared with the FTSE 100 Index which fell 24.7 points (0.4%) in the day, the relative price increase was 0.3%. The volume was 0.7 times the average daily trading volume of 2.3 million shares. Its MCap is GBP9 billion (US$11.5 billion).

UPCOMING EVENT: DIVIDEND

The company announced a dividend of GBX6.50 per share; ex-dividend date is Thursday, January 17; the payable date is Wednesday, February 06.

Highlights in today's Report:

SECTION 1 BEARISH SIGNALS

SECTION 2 BULLISH SIGNALS

SECTION 3 PRICE VOLUME DYNAMICS

SECTION 4 RELATED NEWS

SECTION 5 SUMMARY FINANCIALS

SECTION 6 PROFILE

SECTION 1 ASHTEAD GROUP BEARISH SIGNALS

1.1 Technicals:

Downtrend: Ashtead Group drops on high volatility

+ In the last three months the stock has hit a new 52-week low nine times, pointing to a significant downtrend.

+ The present value of GBP1,000 (PV1000) invested one year ago in Ashtead Group is GBP935, comprising a capital loss of GBP78 and dividend reinvested of GBP13.

PV10001-week1-month1-year
AHT.L1,1061,132935
FTSE 100 Index1,0121,031891

1.2 Overbought/Bearish/Resistance Signals:

+ The Relative Strength Index (RSI) of 74.6 has penetrated the overbought line of 70, suggesting the price gain of 13.7% in the last 14 days is unusually high.

+ The stock is overbought according to the Williams % R indicator of -12.5, suggesting the price is close to its 14-day high of GBX1,927.50.

+ The Stochastic indicator of 93.7 has broken through the overbought line of 80; this indicates the price is close to its 14-day high and is likely to revert to a downtrend.

1.3 Fundamentals:

+ The relative yield of AHT, defined by its yield of 1.8%, divided by average yield of dividend yielding stocks in the FTSE 100 Index of 2.7% is 64.3%. This suggests Ashtead Group stock is overvalued in dividend yield terms.

1.4 Overvaluation [compared with sector average]:

+ Price/Sales of 2.6 [2.3]. We estimate Ashtead Group stock is trading at a current year Price/Sales of 2.3 and a forward year Price/Sales of 2.

SECTION 2 ASHTEAD GROUP BULLISH SIGNALS

High Performance Indicators and rank of Ashtead Group in the United Kingdom market:

DescriptionAHT ValueRank In Market
Debt to Equity0.001In Top 3%
Today's Trading TurnoverGBP30.3 million (US$38.7 million)In Top 3%
% Prem to Vol Wtd Price9.9In Top Quartile
Price/MAP501.06In Top Quartile
Return on Assets [ROA] %14.4In Top Quartile
EPS Growth %94.3In Top Quartile

2.1 Fundamentals:

+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 1.3. Compared with the rest of the market the stock is undervalued.

+ Total Liabilities/EBITDA of 2.4 is comfortably below the Joseph Piotroski benchmark of 5.

+ Net profit margin has averaged 20.5% in the last 3 years. This is considered superior and suggests a high margin of safety.

+ As per the Du Pont analysis, Return on Equity [ROE] is high at 38.3%; an improvement from 25.4% last year. ROE is computed as net profit margin of 28.3% times asset turnover [sales/assets] of 0.51 times leverage factor [total assets/shareholders' equity] of 2.7.

YOY Improvement in ROE and Profit Margin

Du Pont AnalysisROEProfit MarginAsset TurnoverEquity Multiplier
Current Year38.328.30.512.7
Previous Year25.417.30.473.1

2.2 Undervaluation [compared with sector average]:

+ Return on Equity 38.3% [17.9%].

+ Return on Assets 14.4% [6.1%].

+ Return on Capital Employed 14.2% [11.7%].

+ Dividend yield of 1.8% [1.2%].

SECTION 3 ASHTEAD GROUP PRICE VOLUME DYNAMICS

3.1 Technicals:

+ Volume: there were 1,610,414 shares worth GBP30.3 million (US$38.7 million) traded today. In the past week, volume was 1.0 times average and the shares were up 10.6%.

+ Ashtead Group is at a discount of 23.5% to its 12-month high of GBX2,461.0 on September 28, 2018. It is also at a premium of 19.8% to the 12-month low of GBX1,572.50 on December 27, 2018.

3.2 Turnover Rate & Turnover Period:

+ The turnover rate in the 12 months to date was 128.9% (or a turnover period of 9 months). This average length of ownership of the stock at 39.0 times the average holding period of 7 days for stocks in the FTSE 100 Index suggests a larger number of core investors, making a long-term investment safer.

3.3 Moving Annual Return (Past 5 years)

Based on a dynamic start date of 5 years ago, the real rate of return has averaged 25.1%. The Moving Annual Return has been positive in 3 out of 5 years.

AHTClose (GBX)Dividends (GBX)Capital Gain / (Loss) %% YieldAnnual Return %
Jan 111,88333(7.8)1.6(6.2)
1 Yr ago2,043.2427.531.71.833.5
2 Yrs ago1,551.1422.559.82.362.2
3 Yrs ago970.4315.25(9.0)1.4(7.5)
4 Yrs ago1,066.0611.542.11.543.7

Close 5 years ago GBX750.03

3.4 Beta & Alpha:

+ Beta: the Beta of Ashtead Group stock is 1.7. A Beta greater than 1 suggests this is a high risk, high return stock with volatility greater than that of the market.

+ Alpha: the Alpha of the stock is 4.4. The actual return of -14.47% exceeded the expected return of -18.9%, reflecting outperformance.

3.5 The Past Five Years

+ Ashtead Group PLC (L:AHT), has surged GBX1,132.96 (or 151.1%) in the past five years to close at GBX1,883.0 today. Compared with the FTSE 100 Index which has risen 2.6% over the same period, this is a relative price increase of 148.4%.

SECTION 4 ASHTEAD GROUP RELATED NEWS

4.1 Corporate Wires

Ashtead Group (AHT) issued 2 new Releases this week.

January 10: Ashtead Group: Transaction in Own Shares

Ashtead Group plc (the "Company") announces that on 10 January 2019 it purchased for Treasury the following number of its ordinary shares of 10 pence each pursuant to its Pound1 billion share repurchase programme, details of which were announced on 14 December 2017.

Description of shares: Ashtead Group plc - ordinary shares of 10 pence

To view the previous 3 months' Releases in full, click here

4.2 Other News

+ BSS/News Bites:

Ashtead Group PLC is placed 590/1262 in BSS News Bites' ranking of United Kingdom performers in the past year, a percentile ranking of 54.

+ Vanguard Total World Stock ETF 7563:

The stock was one of 7563 global stocks selected by Vanguard Total World Stock ETF (VT) who bought 43,248 shares in the period Oct 31, 2018 to Nov 30, 2018 worth $US79,964,012 at an estimated Volume Weighted Average Price (VWAP) of $US1848.9644. As at Nov 30, 2018, the Vanguard Total World Stock ETF held 201,788 shares worth $US4,768,949 or 0.03% by value of the ETF's portfolio [Ranked 719 out of 7563 by value and 37 out of 291 for United Kingdom].

SECTION 5 ASHTEAD GROUP SUMMARY FINANCIALS

5.1 Dividend History

+ Trailing 12 months dividend has improved from GBX11.5 in 2015 to GBX33.0 in 2019.

5.2 Financials Summary

Year endedApr 2018Apr 2017Apr 2016
Sales (USD B)4.43.73.3
Pretax (USD)1.1B978.4M788.6M
Net (USD)1.2B640.7M521.2M
EPS (GBP)1.9531.0050.81

+ Net profit was up 93.4% from US$640.7 million in 2017 to US$1.2 billion in 2018.

+ Earnings Per Share (EPS) was up 94.3% from GBP1.0 to GBP1.95.

SECTION 6 ASHTEAD GROUP PROFILE

6.1 Activities

Ashtead Group plc, through its subsidiaries, provides equipment rental services in the United States and the United Kingdom. It provides equipment that lifts, powers, generates, moves, digs, supports, scrubs, pumps, directs, and ventilates under the Sunbelt Rentals and A-Plant brand names. The company offers a range of construction and industrial equipment, including earth moving equipment, aerial work platforms, high reach forklifts and other materials handling units, smaller tools, and pumps, as well as power generation, portable site accommodation, scaffolding, formwork and falsework, and temporary traffic management equipment on rental basis. It also sells new and used parts and equipment. The company serves the construction industry and facilities management companies, as well as disaster relief agencies, sport and music event organizers, governments, local authorities, and homeowners. It operates approximately 105 rental stores in the United Kingdom; and 393 rental stores in the United States. The company was founded in 1947 and is based in London, the United Kingdom.

6.2 Top Management

The chairman is Paul Walker and the chief executive officer is Geoff Drabble.

6.3 Issued Capital

Based on 478,960,000 issued shares the market capitalisation is GBP9 billion (US$11.5 billion).

COMPANY IDENTIFIERS

Contact: 44-020-77269700

Physical Address: Kings House, 36-37 King Street, London, EC2V 8BB, United Kingdom

State/Province/Country: United Kingdom

Country of Incorporation: United Kingdom

Exchange: London Stock Exchange

Business Sector: Industrial & Commercial Services

Industry Group: Professional & Commercial Services

Industry: Business Support Services

Economic Sector: Industrials

ISIN: GB0000536739

L:AHT; LON:AHT; LN:AHT; AHT.L

PermID: 4295898044

RIC: AHT.L

Ashtead Group Plc

Source: www.BuySellSignals.com