Investors' Chronicle Investment psychology lessons & Ashtead: The Companies and Markets Show
Dec 13, 2024
Alex Newman, a writer specializing in behavioral psychology and finance, joins Julian Hofmann to discuss intriguing investment insights. They dive into Ashtead's move to list in the US and its market implications. Newman elaborates on how biases affect investment decisions, advocating for awareness in behaviors. Hofmann reviews Victrex's surprising share rise amid investor optimism. They also touch on the dynamics surrounding the acquisition of fintech firm Equals, exploring its market potential and the complex landscape of investor reactions.
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Ashtead's Short-Term Pressure
- Ashtead's recent figures were underwhelming with rental revenue up 6% and cash profits up 4%, but guidance was cut, causing a 14% share drop.
- The guidance cut and subsequent broker downgrades signal short-term pressure, though the company maintains strong margins and leverage.
US Market Drives Ashtead Outlook
- Ashtead's performance heavily depends on the US non-construction spending environment, which has been mixed due to political and economic uncertainties.
- Investors should watch sector surveys and compare Ashtead's outlook with peers like United Rentals to gauge market dynamics.
Buyback Signals Confidence
- Ashtead's announced £1.5 billion buyback over 18 months signals management's confidence in long-term growth despite short-term headwinds.
- Use buybacks as a sign of company confidence when evaluating investment amid temporary difficulties.
