Today I’m running the rule over three headline-grabbers in Tuesday trade.
Spark into life
Power generator provider Ashtead Group (LSE: AHT) continues to defy problems in the oil and gas market thanks to strong demand in other sectors.
The business announced on Tuesday that total rental revenues jumped 17% during the 12 months to April 2016, to £2.26bn. This drove pre-tax profit 24% higher from the corresponding period, to £489.6m.
And promisingly, chief executive Geoff Drabble said: “Our end markets remain strong, the structural drivers are still in place and we have a strong balance sheet, which allows us to execute our plans responsibly.”
With the firm’s global expansion strategy clearly delivering the goods, the City expects Ashtead to print earnings growth of 6% in 2017 and 8% the following year, resulting in ultra-low P/E ratios of 10.7 times and 9.9 times.
I reckon the power play is a steal at current share prices.
Build bumper returns
Construction play Crest Nicholson (LSE: CRST) underlined the strength of the housing market with its latest trading update on Tuesday.
Shrugging off the imminent Brexit referendum, Crest Nicholson saw revenues leap 22% during November-April, to £408.1m, a result that propelled pre-tax profit 25% higher to £72.6m.
Although Crest Nicholson acknowledged the possibility of “business disruption” should Britain leave the EU, the company remains bullish over its long-term prospects. Indeed, chief executive Stephen Stone commented that “the business is well positioned to achieve its target of £1bn of revenues in 2016 and to continue growing its contribution to overall housing delivery.”
The City shares this bullish view, and earnings are expected to grow 25% and 13% in the periods to October 2016 and 2017, respectively, resulting in P/E ratings of just 9.2 times and 8.2 times.
And dividend yields of 4.8% and 6.1% for these years rubber-stamp Crest Nicholson as a hot value pick, in my opinion.
Clothing colossus
Fashion play Ted Baker (LSE: TED) completed the set on Tuesday with great trading numbers of its own.
The company saw revenues leap 11.3% during the 19 weeks to 11 June, it said, a result that was driven by the surging popularity of its online channels. Sales generated via the internet galloped 32.3% during the period.
Ted Baker’s multi-channel approach is clearly paying off handsomely, and ongoing expansion looks set to keep driving the top line higher — the clothing giant opened new stores in Beijing, Ottawa and Seattle during the period, as well as its first language-specific website in Germany.
Ted Baker has a great growth record, and the number crunchers expect this to keep rolling with rises of 12% and 15% for the years to January 2017 and 2018, respectively.
While slightly expensive on paper — the company carries P/E ratings of 21 times and 18 times for this year and next — I reckon Ted Baker’s terrific momentum across the globe merits such a premium.
