Aggreko Powers Up FTSE 100

The storms may be raging this morning, but Aggreko (LSE:AGK) is powering up the FTSE 100 with a 5.3% increase in its share price, a growth of 83.00 pence per share to 1,600.00.

Normally, this is where I would say, as others already have, that the increase comes following Aggreko’s release of its interim results for the third quarter.  Frankly, in this case, whilst the report was released at 7:01 am, it is factual that the increase followed the report a short while later, but I hardly think that the increase was a direct result of the report.

Shedding Light on What Is Really Happening

Let’s look at this through the lens of a couple of simple syllogisms.

Syllogism No.1

1. Agrekko is “the world leader in the supply of temporary power and temperature control.“
2. Agrekko releases a cursory interim report with very few details other than trading was in line with expectations, local business was performing well, and the business had a strong cash generation.
3. Aggreko’s share price jumps 5.3%.

Syllogism No. 2

1. Agrekko is “the world leader in the supply of temporary power and temperature control.“
2. Close to 250,000 homes in the UK are without power after being pummeled by the worst storm to hit the country in a decade.
3. Aggreko’s share price jumps 5.3%.

All in all, things (as much as Aggreko has shared) appear to be going well.  Debt has decreased, revenues are up on an underlying basis, and the project pipeline “remains strong.”  Although the its share price has backed off of its its highs of 2012, it continues to hover in the region of its opening at the beginning of 2011.  Whether you look at Aggreko’s performance long-term or short-term, neither perspective warrants a 5% single-day jump.  At least not compared to a storm.

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