Ashtead's yo-yoing stock bounces back

Ashtead’s shares price was on the road to recovery again yesterday, after the company’s stock lost around half its value in just three months.

The recent fall, which saw the hire firm’s share price hit a low of 112p earlier this week, has been attributed to city rumours that outgoing chairman George Burnett was set to sell his stake of 12m shares.

Investors in the firm have also proved jumpy about Ashtead’s decision to pay nearly £544m for US-based company NationsRent at a time when the US housing market is under pressure.

But the company’s stock, which has been targeted by hedge funds over the summer, made gains yesterday as analysts decided that the market had taken too pessimistic a view of Ashtead’s prospects in the event of a recession in the US.

Ashtead’s share price has proved volatile over the past few years, having dropped to a record low of 2.5p in March 2003 when the company admitted accounting irregularities at US subsidiary Sunbelt Rentals.