Annoyingly I’ve missed out on Ashtead blitzing it this
morning. Having marched all this way it was never likely to miss out on cracking
300p/shr, which it’s done with style. US revenues were up 20% YOY in its
Sunbelt business, while EBITDA rose by 36% YOY during Q1. Momentum in the business
is clearly strong, leading AHT to already anticipate full year numbers as “materially
ahead of its previous expectations.”
Although I missed out on AHT, I think it presents an
opportunity in United Rentals (URI US, mkt cap $3.0bn). On a USD basis, both
companies’ share prices have closely tracked each other during the past four
years. But this began to break down shortly after URI bought RSC Holdings for $4.2bn
in April last. This possibly reflects investor apprehension over integration of
the two companies, or uncertainty over the outlook for US construction, or both.
On the latter concern, given that AHT is going gangbusters, I
suspect URI is also trading well. AHT’s current share price and empirical
regularity would suggest that URI should be closer to $47/shr; 47% higher than
Friday’s close at $32/shr. If this disparity reflects just integration
concerns, then to me that discount seems overdone. So I splashed out on some
URI at the open paying $33.65/shr. I think this could be a quick performer.
![]() |
United Rentals share price compared to Ashtead, USD adjusted |
Disclaimer: The information, discussions or topics referred
to on this blog should in no way be considered “advice” to buy or sell
anything. The information which may be referred to is freely available in the
public domain and where required the source of information is referenced to for
verification. While every effort has been made to ensure the veracity of any
information contained within this blog, the author accepts no responsibility
for the accuracy of any information contained within this blog or for the
sources of information which may be referred to. Readers are responsible for
their own actions and interpretation of the information contained within this
blog.
No comments:
Post a Comment