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Warning signs at Aggreko

The equipment hire company has seen margins fall as receivables rise
January 31, 2019

For several years, power-generation equipment rental group Aggreko (AGK) has been attempting to limit the damage from tough trading at its power solutions business. Souring economic sentiment and rising competition from generalist equipment rental companies is only likely to make management's job harder. We feel the negative trends experienced by the business over the last five years may prove more deeply entrenched than suggested by the shares' current rating.  

IC TIP: Sell at 717p
Tip style
Sell
Risk rating
High
Timescale
Short Term
Bull points

Self help
2020 Olympic work

Bear points

Margin declines
Forecast downgrades
Rising debtors-to-sales
Deteriorating economic sentiment

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