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Sandy blows our Ashtead 'sell' off course

Hurricane Sandy roaring up the east coast will generate lots of work for US tool rental companies and has blown our short-term Ashtead sell tip off course, so we're bailing out
November 6, 2012

Shares in equipment rental company Ashtead rose by over 8 per cent after Hurricane Sandy left a trail of destruction up the east cost of the US, raising the prospect of lots of new business when repairs get under way. This means our trading idea is losing money and, with a post-election market rally also possible, we are quitting our sell recommendation.

IC TIP: Hold at 386p

The trading idea was simple - shares in Ashtead and its near rival United Rentals had moved in lock-step for three years when this summer Ashtead's price headed north and United's went south. We thought this had to correct. Eventually, maybe, but the gap between these two is now at record levels, and Ashtead's shares have risen 23 per cent since our sell tip.