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Bear Of The Day: Ashtead Group (ASHTY)

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Ashtead Group (ASHTY - Free Report) is a Zacks Rank #5 (Strong Sell) after the company missed the Zacks Consensus Estimate when the last reported. The company provides rental solutions in the US and UK via Sunbelt Rentals and A-Plant. Sunbelt rents pump and power, climate control and scaffolding services.  This article will look at why this stock is a Zacks Rank #5 (Strong Sell) as it is the Bear of the Day.

Description                       

Ashtead Group Plc is an equipment company which provides rental solutions primarily in United States and United Kingdom. The company's operating segments consists of Sunbelt Rentals and A-Plant. Sunbelt Rentals provides pump and power, climate control and scaffolding services. A-Plant business operates through Eve Trakway Limited, which constructs temporary roadways and barriers; PSS, which offers trenchless technology and fusion services and FLG services. Ashtead Group Plc is headquartered in London, the United Kingdom.

Earnings History

When I look at a stock, the first thing I do is look to see if the company is beating the number.  This tells me right away where the market’s expectations have been for the company and how management has communicated to the market.  A stock that consistently beats has management communicating expectations to Wall Street that can be achieved.  That is what you want to see.

In the case of Ashtead Group (ASHTY - Free Report) , I see two beats and two misses of the Zacks Consensus Estimate over the last year. The most recent quarter was a miss with the company posting $4.64 when the consensus was calling for $4.96.  This alone does not make the stock a Zacks Rank #1 (Strong Buy) and it doesn’t make it a Zacks Rank #5 (Strong Sell) either.

The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.

Earnings Estimates

The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower.  For HII I see annual estimates moving lower of late.

The current fiscal year consensus number moved lower from $15.63 to $14.56 over the last 60 days. 

The next year has moved from $17.85 to $16.66 over the last 60 days.

Negative movement in earnings estimates like that is why this stock is a Zacks Rank #5 (Strong Sell).

It should be noted that a lot of stocks in the Zacks universe are seeing negative earnings estimate revisions.  That means that the stocks that are seeing small but negative earnings estimate revisions are falling to a Zacks Rank #5 (Strong Sell).


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