Here’s Why We Think Ashtead Technology Holdings (LON:AT.) Might Deserve Your Attention Today

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Investors are often guided by the idea of ​​discovering ‘the next big thing’, even if that means buying ‘story stocks’ without any revenue, let alone profit. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merits of good company fundamentals. While a well-funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.

So if this idea of ​​high risk and high reward doesn’t suit you, you might be more interested in profitable, growing companies, like Ashtead Technology Holdings (LON:AT.). Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.

Check out our latest analysis for Ashtead Technology Holdings

Ashtead Technology Holdings’ Improving Profits

Even modest earnings per share growth (EPS) can create meaningful value when it is sustained reliably from year to year. So it’s easy to see why many investors focus on EPS growth. It is awe-striking that Ashtead Technology Holdings’ EPS went from UK£0.01 to UK£0.089 in just one year. Even though that growth rate may not be repeated, that looks like a breakout improvement. This could point to the business hitting a point of inflection.

One way to double-check a company’s growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. The good news is that Ashtead Technology Holdings is growing revenues, and EBIT margins improved by 13.7 percentage points to 17%, over the last year. That’s great to see, on both counts.

You can take a look at the company’s revenue and earnings growth trend, in the chart below. For finer details, click on the image.



You don’t drive with your eyes on the rear-view mirror, so you might be more interested in this free report showing analyst forecasts for Ashtead Technology Holdings’ futures profits.

Are Ashtead Technology Holdings Insiders Aligned With All Shareholders?

Investors are always looking for a vote of confidence in the companies they hold and insider buying is one of the key indicators for optimism in the market. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, insiders are sometimes wrong, and we don’t know the exact thinking behind their acquisitions.

We haven’t seen any insiders selling Ashtead Technology Holdings shares, in the last year. So it’s definitely nice that Independent Non-Executive Director Anthony R. Durrant bought UK£32k worth of shares at an average price of around UK£3.17. Purchases like this can help investors understand the views of the management team; in which case they see some potential in Ashtead Technology Holdings.

Recent insider purchases of Ashtead Technology Holdings stock is not the only way management has kept the interests of the general public shareholders in mind. Namely, Ashtead Technology Holdings has a very reasonable level of CEO pay. The median total compensation for CEOs of companies similar in size to Ashtead Technology Holdings, with market caps between UK£159m and UK£637m, is around UK£823k.

Ashtead Technology Holdings’ CEO took home a total compensation package of UK£320k in the year prior to December 2021. First impressions seem to indicate a compensation policy that is favorable to shareholders. CEO compensation is hardly the most important aspect of a company to consider, but when it’s reasonable, that gives a little more confidence that leadership is looking out for shareholder interests. It can also be a sign of a culture of integrity, in a broader sense.

Should You Add Ashtead Technology Holdings To Your Watchlist?

Ashtead Technology Holdings’ earnings per share growth have been climbing higher at an appreciable rate. Better yet, we can observe insider buying and the chief executive pay looks reasonable. It could be that Ashtead Technology Holdings is at an inflection point, given the EPS growth. If these have piqued your interest, then this stock surely warrants a spot on your watchlist. If you think Ashtead Technology Holdings might suit your style as an investor, you could go straight to its annual report, or you could first check our discounted cash flow (DCF) valuation for the company.

The good news is that Ashtead Technology Holdings is not the only growth stock with insider buying. Here’s a list of them… with insider buying in the last three months!

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

Have feedback on this article? Concerned about the content? get in touch with us directly. Alternatively, email editorial-team (at)

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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