Sumary of 2 FTSE 100 stocks with strong growth prospects:
- The mature businesses, which have grown to become the largest listed firms, often (but not always) generate large amounts of cash and return this to shareholders.
- FTSE 100 company making its money in the US Ashtead is a construction equipment hire business, making most of its money in the US. Therefore, it can be expected to benefit in the coming years from the infrastructure spending unleashed by Joe Biden.
- That will require a lot of machinery, which Ashtead’s Sunbelt business can provide.
- Return on equity is about 22. Revenue went from £2.55bn in 2016 to £5bn in 2021. It’s forecast to rise to £5.73bn by 2022. I feel it’s always prudent as an investor to consider what the downside could be.
- Equipment rental is capital-intensive and can be cyclical, so the industry goes through boom and bust times.
- Another would be a rise in interest rates, as the group carries £4.2bn of net debt.
- Stateside opportunity Entain is another business looking over the pond for its success.
- The liberalisation of gambling legislation in the US has given new impetus to UK-listed shares and made them acquisition targets.