Inevitably, there are many FTSE 100 companies with no intention of aggressively pursuing growth. Perhaps they operate in a mature industry or are working to improve their balance sheets.
However, there are certain companies that never rest. Like Amazon, they have that drive to expand and capture further market share. You could even call them relentless, which was actually Jeff Bezos’s preferred original name for Amazon.
Indeed, if you type “relentless” into a search engine with .com after it, you will still be redirected to the tech juggernaut’s website.
Of course, bold growth plans sometimes result in firms biting off more than they can chew. But these two ambitious FTSE 100 companies have so far managed to find the sweet spot.
Ashtead (LSE: AHT) rents out a wide selection of construction and industrial equipment to a diverse range of industries. It has grown tremendously for over two decades and is now the leading plant hire firm in the UK and the second largest in North America.
It has reached this enormous scale partly through its voracious acquisition strategy. In 2017, it spent £437m on bolt-on acquisitions and new site openings. That jumped to $1.3bn and $1.1bn in 2022 and 2023, respectively.
Consequently, its market share in the US has risen from 8% in 2018 to 13% today. Management intends to increase that figure further.
Now, one downside is that the bulk of Ashtead’s business is tied to the economic cycle. That presents challenges if there’s a severe economic downturn. However, to make its earnings more resilient, the company has moved into numerous specialty industries.
For instance, it rents out golf course maintenance equipment and entered the commercial cleaning industry in 2015. While construction demand ebbs and flows, grass will always need mowing and buildings constantly need cleaning.
In 2021, it also started hiring out special cameras, rigs, and lighting equipment to major film and TV production sets.
Ashtead’s five-year share price return of 127% crushes that of the FTSE 100 (-3%).
Building a massive pipeline
The second FTSE 100 firm not resting on its laurels is AstraZeneca (LSE: AZN), the UK’s largest company by market cap.
As of July, the biopharmaceutical giant had 172 projects in its pipeline across oncology, cardiovascular, respiratory, and rare diseases. And this exceptional product pipeline has recently been bearing fruit, with a record 34 regulatory approvals in major markets last year.
Not content to stand still, though, AstraZeneca is investing a massive $2.6bn per quarter on R&D!
Importantly, analysts expect the company’s momentum to continue. According to TradingView, of the 31 brokers covering the stock, not a single one currently has a ‘sell’ rating on it.
The drugmaker also has a strong position in China, which now accounts for 13% of its global sales. That is undoubtedly a very attractive market long term, with 39% of the country’s population projected to be over retirement age by 2050.
But it does present risk, given rising geopolitical tensions between the West and China. In response, AstraZeneca has reportedly drafted plans to spin off its China operations into a separately listed company. That could unlock additional shareholder value, but an element of uncertainty remains.
The shares are up 83% in five years, but I think they look poised to rise further.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Ben McPoland has positions in Ashtead Group Plc. The Motley Fool UK has recommended Amazon.com. 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 2023