Thursday tips round-up: Ashtead Group, Hargreaves Lansdown

5th Sep 2013 07:29

When a company's share price has risen by 60 per cent over the last year approximately analysts will instinctively look for reasons to justify taking profits. So it is with plant hire specialist Ashtead Group. Its first quarter figures were simply shoot-out-the-lights. However, it did also supply two reasons for concern. The first is that its US competitors are finding it easier to find the funds to finance their expansion, although that will take time. Secondly, some analysts may have misinterpreted a prudent approach to capital spending on the part of the company as caution regarding the economic outlook. "The shares sell on less than 16 times' this year's earnings; yesterday's fall looks like a good window to buy," The Times´s Tempus writes. There is a confluence of events bearing down on the financial sector and Hargreaves Lansdown is benefitting greatly from it. Revenues in the last financial year rose by 22% to £292m while pre-tax profits improved by 28% to £195m. More significantly however, it added 75,000 clients in the year, to reach a record 507,000. Surely quite satisfying to investors, the dividend was improved by 31% to 29.6p. In fact, analysts expect it to keep growing by a total of 62% over the next two years, placing shares on a forecast yield of 3.3%, rising to 4% the year after. Furthermore, there is always the chance of another special dividend, following the one paid last September. Ironically, the biggest problem with the shares is the sky-high rating. On that basis Questor rates Hargreaves Lansdown a hold but advises watching for any dips as a buying opportunity.Please note: Digital Look provides a round-up of news, tips and information that is impacting share prices and the market. Digital Look cannot take any responsibility for information provided by third parties. This is for your general information only as not intended to be relied upon by users in making an investment decision or any other decision. Please obtain a copy of the relevant publication and carry out your own research before considering acting on any of this information.AB