The British-based plant and machinery hire company benefited greatly from Brexit as the slump in sterling sent its profits soaring given the company earns the bulk of its revenue in the US. The major depreciation in the pound versus the US dollar, and its big exposure to America made Ashtead (LON:AHT) the pick of the bunch on the London market in the wake of the UK’s decision to leave the EU.
An easing of monetary policy by the Bank of England (BoE) and a belief that the UK is heading for a ‘hard Brexit’ pushed the share price to fresh record highs. The election of Donald Trump to the White House triggered even more buying as the businessman turned politician promised to introduce a raft of pro-business polices, including major infrastructure projects.
2016 was a year that saw major political surprises and Ashtead’s share price welcomed those very surprises, but now we are seeing a pullback in the stock. The row that Mr Trump is involved in with the FBI has dented the stock. Traders are worried that this scandal may disrupt Mr Trump’s plans at best, or they may not even be introduced at worst.
CRH (LON:CRH) has benefited modestly from Trump’s victory in November, but as the company has its profits denominated in euros, Ashtead is the clear winner of the two. Should we see more uncertainty surrounding President Trump, both stocks could take a knock.
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