This UK stock has beaten Warren Buffett by 7x over the last 20 years!
Billionaire investor Warren Buffett is regarded as one of the best investors of all time. And it's not hard to see why. His value-oriented approach to the financial markets has paved the way to an average annualised return of 19.9% since the 1960s – almost double what the US stock market has achieved over the same period.
However, despite his knack for finding lucrative investment opportunities, he seems to have missed a pretty big one here in the UK. The company in question is the equipment rental giant Ashtead Group (LSE:AHT).
Since 2005, the stock's delivered a jaw-dropping 4,880% total return for long-term shareholders. By comparison, Buffett's investment portfolio at Berkshire Hathaway has 'only' delivered a 674% gain over the same period. That's certainly nothing to scoff at, but it pales by comparison.
So what actually enabled Ashtead to deliver such explosive gains? And can the business continue to fire on all cylinders moving forward?
While Buffett prefers to learn from his mistakes, learning from successes can also be a valuable exercise. After all, if an investor understands what went right, they now know what traits to be on the lookout for in the future. With that in mind, what's been behind Ashtead's tremendous growth?
As always, there are a lot of factors at play. But in the case of Ashtead, management was early in spotting the trend of customers preferring to rent equipment rather than own it. After all, this drastically lowers start-up costs within sectors like construction and takes away all the headaches of machine maintenance.
After leveraging this within its home market in the UK, management expanded to the United States under the Sunbelt Rentals brand. And after two decades, during which US infrastructure spending surged following the 2008 financial crisis, Ashtead now lies at the heart of many industries in America, generating close to 90% of its top line.
In short, Ashtead massively benefitted from a first-mover advantage on a new secular trend. And with profits being reinvested in bolt-on acquisitions of smaller but profitable operators, prudent capital allocation decisions paved the way for strong profit margins and consistent value creation for shareholders. These are exactly the sort of competitive advantages Buffett likes to hunt for.
With so much growth already under its belt, can Ashtead continue to be a Buffett-beating stock? The consensus analyst forecasts certainly suggest so.
On average, it seems institutional analysts are expecting the Ashtead share price to grow by another 35% over the next 12 months. This upward trajectory's driven by the group's continued organic growth within the US market. However, it seems excitement's starting to brew as the firm expands into new markets like Canada, seeking to replicate its US success.
However, not every analyst is too keen on this international expansion plan. There are growing concerns that Ashtead might be unnecessarily exposing itself to integration risk and going beyond its financial capacity if its core US market suffers an economic slowdown. After all, the bulk of equipment rental demand comes from the construction sector, which is notoriously sensitive to economic volatility.
Nevertheless, with management's impressive track record of capital discipline, this stock seems worthy of closer investigation, even after achieving such tremendous growth so far.
The post This UK stock has beaten Warren Buffett by 7x over the last 20 years! appeared first on The Motley Fool UK.
More reading
5 Stocks For Trying To Build Wealth After 50
One Top Growth Stock from the Motley Fool
Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has recommended Ashtead Group Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
Motley Fool UK 2025
Melden Sie sich an, um Ihr Portfolio aufzurufen.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
35 minutes ago
- Yahoo
2 Healthcare Stocks to Keep an Eye On and 1 to Ignore
From novel pharmaceuticals to telemedicine, most healthcare companies are on a mission to drive better patient outcomes. But speed bumps such as inventory destockings have persisted in the wake of COVID-19, and over the past six months, the industry has pulled back by 7.5%. This drop was discouraging since the S&P 500 held steady. The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. Taking that into account, here are two healthcare stocks we think can generate sustainable market-beating returns and one we're steering clear of. Market Cap: $4.48 billion Pioneering the shift from bulky, short-term heart monitors to sleek, wire-free patches, iRhythm Technologies (NASDAQ:IRTC) provides wearable cardiac monitoring devices and AI-powered analysis services that help physicians detect and diagnose heart rhythm disorders. Why Is IRTC Not Exciting? Issuance of new shares over the last five years caused its earnings per share to fall by 5.6% annually while its revenue grew Cash-burning history makes us doubt the long-term viability of its business model 124× net-debt-to-EBITDA ratio shows it's overleveraged and increases the probability of shareholder dilution if things turn unexpectedly iRhythm's stock price of $138.38 implies a valuation ratio of 78.4x forward EV-to-EBITDA. If you're considering IRTC for your portfolio, see our FREE research report to learn more. Market Cap: $3.51 billion Pioneering treatments for a devastating childhood muscle-wasting disease that primarily affects boys, Sarepta Therapeutics (NASDAQ:SRPT) develops and commercializes RNA-targeted therapies and gene therapies for rare genetic disorders, primarily Duchenne muscular dystrophy. Why Do We Love SRPT? Market share has increased this cycle as its 51.3% annual revenue growth over the last two years was exceptional Earnings per share grew by 41% annually over the last five years, massively outpacing its peers Cash-burning tendencies have improved over the last five years, showing it could become financially independent one day At $35.74 per share, Sarepta Therapeutics trades at 3.5x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it's free. Market Cap: $14.82 billion With a network spanning nine states and serving primarily urban and suburban communities, Tenet Healthcare (NYSE:THC) operates a nationwide network of hospitals, ambulatory surgery centers, and outpatient facilities providing acute care and specialty healthcare services. Why Do We Like THC? Share repurchases have amplified shareholder returns as its annual earnings per share growth of 30.7% exceeded its revenue gains over the last five years Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures, and its returns are growing as it capitalizes on even better market opportunities Returns on capital are climbing as management makes more lucrative bets Tenet Healthcare is trading at $159.57 per share, or 13x forward P/E. Is now the right time to buy? Find out in our full research report, it's free. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
44 minutes ago
- Yahoo
2 Top Tech Stocks That Could Help Make You a Millionaire
Amazon's durable growth should help it generate strong returns over the long haul. Alphabet's cheap present valuation and its innovative history make it a buy today. 10 stocks we like better than Amazon › Building a retirement portfolio that's worth a million dollars is not an insurmountable task. All it takes is a few decades of consistently adding relatively reasonable amounts of money to a diversified stock portfolio every month. If, for example, your portfolio's value is $50,000 today, and you add $200 a month to it steadily from here, it will be worth over $1 million in 30 years, assuming an average rate of return of 10% annually. And that's not an unreasonable assumption -- that's been the market's average annualized rate of return over the long haul. If you have savings sitting in your bank account earning close to zero in interest, perhaps this can be an inspiration to start up that investment account. The best time to begin was yesterday; the second best time to begin is now. But what stocks should you buy for your portfolio? To generate solid long-term returns, you cannot go wrong with some technology giants that are trading today at reasonable prices. Here's why Amazon (NASDAQ: AMZN) and Alphabet (NASDAQ: GOOG) can help lift your portfolio's value past the $1 million mark by the time you retire. Steady growth has been the name of the game at Amazon, and that has made it a monster stock to own over the last few decades. The company has a dominant position in e-commerce in the United States -- and a few other countries as well -- while simultaneously leading the global cloud computing market with its Amazon Web Services (AWS) division. E-commerce still has plenty of market share it can steal from physical retail, even in Amazon's home country. E-commerce as a percentage of total retail sales in the United States sat at just 16.2% as of the first quarter of 2025. Despite Amazon's large presence and popularity, online shopping does not account for even $1 out of every $5 spent at retail. While e-commerce's share will not ever approach 100% due to items like fresh groceries -- although Amazon and others are working hard to deliver these, too -- e-commerce should become a much larger piece of the pie in the years to come. Amazon's North American retail sales grew by 8% year over year last quarter, while international sales grew 8% as well when factoring out foreign currency fluctuations. Those revenues could easily keep growing at similar rates for years. AWS grew by an even faster 17%. The cloud computing segment is now generating over $100 billion in revenue and experiencing supercharged growth due to the rising demand for artificial intelligence infrastructure. A study by research firm Roots Analysis forecast that the cloud computing market will grow at a 15% annualized rate through 2035, providing a nice tailwind for this business. Today, Amazon's market capitalization is around $2.2 trillion, and it generated $72 billion in operating income over its last four reported quarters. With durable growth still left to be had in both e-commerce and cloud computing, Amazon can deliver strong returns for your portfolio over the long term. Investors have some doubts about Alphabet today -- they're worried about new competition eating its lunch. The tech giant that owns Google Search, Google Cloud, YouTube, Waymo, and Google DeepMind has seen its stock price growth lag behind its peers; it now trades at a price-to-earnings ratio (P/E) of 20, much lower than the competition. Meanwhile, artificial intelligence (AI) powerhouse OpenAI is closing in on $10 billion in annual recurring revenue (ARR) and is aggressively trying to steal market share from Google Search. So far, the things that are worrying investors have not had a discernible impact on Alphabet's financial statements. Google Search revenue grew to $50.7 billion last quarter, helping to lift its overall revenue by 14% year over year on a currency-neutral basis. OpenAI and its ChatGPT large language model are definitely competitors to Alphabet, but the tech giant is fighting back hard: Its Google AI tools are getting strong usage, and its Gemini chatbot is catching up with ChatGPT in usage, according to surveys. Plus, Alphabet has become far more than just Google Search. Its Google Cloud unit has been set up for success in the AI era due to the company's immense long-term investments in infrastructure to support AI systems. In fact, it's doing so well at deploying AI capacity that OpenAI has signed a deal with Google Cloud for its computing needs. In addition, YouTube is growing and increasing the share of video-viewing time it accounts for in the United States, while autonomous driving subsidiary Waymo is expanding its robotaxi service across the country and beginning to disrupt the ride-sharing market. Even if Alphabet struggles in AI and cedes some revenue to OpenAI and other rivals, it has many ways to grow its revenue and earnings over the long haul, especially with Google Cloud. That division has closed in on $50 billion in annualized revenue and is growing by 28% year over year. Within five years, investors should expect the division to generate well over $100 billion in revenue annually and contribute significantly to Alphabet's profits. At a cheap P/E ratio of 20 and with a history of technological innovations, strong revenue growth, and magnificent earnings power, Alphabet stock looks like a great long-term bet for your portfolio. Before you buy stock in Amazon, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Amazon wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $653,702!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $870,207!* Now, it's worth noting Stock Advisor's total average return is 988% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Brett Schafer has positions in Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet and Amazon. The Motley Fool has a disclosure policy. 2 Top Tech Stocks That Could Help Make You a Millionaire was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
44 minutes ago
- Yahoo
AI could lead to more job cuts at BT, says chief executive
The chief executive of BT has said that advances in artificial intelligence could presage deeper jobs cuts at the FTSE 100 telecoms company, which has already outlined plans to shed up to 55,000 workers. Two years ago, the company said that between 40,000 and 55,000 jobs would be axed as it set out to become a 'leaner' business by the end of the decade. However, in a weekend interview, its chief executive, Allison Kirkby, said the plan, which includes stripping out £3bn of costs, 'did not reflect the full potential of AI'. 'Depending on what we learn from AI … there may be an opportunity for BT to be even smaller by the end of the decade,' Kirkby said in an interview with the Financial Times. BT, which is the biggest broadband provider in the country, laid out plans in 2023 to cut the size of its workforce, including contractors, by 2030. Philip Jansen, who was chief executive at the time, said the company could rely on a much smaller workforce and cost base by the end of the decade. Kirkby, who took over from Jansen last year, has pushed for the company to streamline its operations – selling its Italian business and its Irish wholesale and enterprise unit – and focus more on improving in the UK. Last month, BT spun off its international business into a separate division, but is reportedly open to offers for this area of the business, according to the FT, which cited a person familiar with the matter. Kirkby also said she did not think the value of BT's broadband network business Openreach was reflected in its share price. If this continued, BT 'would absolutely have to look at options'. The 'time to reconsider' whether to spin off the business would take place once it has completed upgrading its network to full fibre, she said. However, Kirkby said her preference would be for the BT share price to reflect the worthof Openreach rather than to spin it off. It emerged last week that BT was weighing up a potential takeover of the telecoms and broadband company TalkTalk. Its smaller rival has about 3.2 million customers, although it has struggled since it was taken private by Toscafund, a London-based investment firm, in a £1.1bn deal that added £527m of debt to its balance sheet in 2021.
