By: Rob Wertheimer
Ashtead noted at its investor day that it can grow revenues 7-10%, and using cash generated, have enough cash remaining to buy back 10% of the company a year in the current environment. We wrote a couple of days ago that URI can buy back 8% (now 9% with the share price fall) of the company, grow fleet 5+% and revenues 8%, all with this year’s free cash flow, and have some cash left over. Both companies will probably have better use for some of that cash, through large or small acquisitions. The value pool inherent in this statement, we believe, is vastly larger than that which absorbs much of the research on the names, which is fine tuning around current rates and fleet dynamics.