Ashtead Group (LSE:AHT, Financial) (U.K.) is an industrial equipment rental company with operations in the U.S., U.K. and Canada, whose customers include construction firms, non-construction related contractors and government agencies. We like that the company is the number-two player in what we view as an under-penetrated North American equipment rental market. Its primary competition is approximately 5,000 smaller and less efficient companies that combine to have around 50% market share, which we see as an opportunity for Ashtead. We also appreciate its improved business mix that focuses more on specialty and less on construction and that it offers potentially better through-cycle returns and scale benefits. In our view, the market values Ashtead as if it is a cyclical equipment provider, while we see a structurally growing and scalable services network business with increasing returns on capital and a top management team.
From David Herro (Trades, Portfolio)'s Oakmark International Fund third-quarter 2022 commentary.
