Ashtead (AHT) - The recovery continues

And another article in the Telegraph's Questor column:

Ashtead builds on US boom

Ashtead cheered investors yesterday with its first dividend payment for three years.

But, given the stock's rise from 100p when Questor tipped it in July 8 to 179¾p yesterday, shareholders have hardly had reason to down tools.

The building equipment rental company has hauled itself from the brink of breakdown to break-neck growth in the space of two years, with interim results firmly shutting the door on an unfortunate fraud and financing debacle.

An interim dividend of 0.5p per share is payable on February 28. Pre-tax profit more than doubled to £40m, on sales up 13pc to 314m as the company benefited from a roaring trade in the US, which accounts for roughly two thirds of group revenues.

There is room for more growth ahead, as US construction companies continue to shift from owning their own gear to hiring it. But risk lurks in precisely the sensitivity to US economic cycles that currently explains why the company is faring so well.

With most of its business coming from non-residential construction projects, a business downturn would hit Ashtead hard - though management says the outlook for now is favourable.

Shares are not the steal they were a few months ago, but on a modest 11 times next year's forecast earnings, according to Investec, and a return to the dividend list, worth holding.