Multi-year growth phase given the tailwindsDo you own DD
Atrium is again increasing it's target based on the huge contract win announcement yesterday
20231211_Atrium_DRX_Contracts.01.pdf (mcusercontent.com)
In 2 days, volume traded is around 3% of the float.There are many shareholders that have
double their investment in the last 8 months and triple in the last 17months.
So we can expect some sideway or even down days to let these profit taker before
the next leg up.But make no mistake, the next leg up will occur folllowed by another and another
leg up until we do reach fair valuation.Every pull back will be an opportunity to get in at a very cheap price
I am in the group of the triple and bought more share yesterday and again this morning.
This stock will be in the double digit in early 2024.
From Atrium report
ADF has a solid track record of growing revenue through its history, however, we believe it has entered a multi-year growth phase given the tailwinds in its key markets and expanded facility capacity. • The Company’s topline growth is supported by significant tailwinds in government infrastructure spending and non-residential construction growth. • ADF spent the last two years adding a robotic fabrication line to its Quebec facility, which has led to significantly increased throughput and margins. • ADF has largely improved its balance sheet over the last year, reaching a cash position of $44M in Q3. This allows the Company to take on larger-scale projects that were previously not feasible. • ADF is a family-owned business with Jean, Pierre, and Marise Paschini holding 45% of the shares outstanding and 89% of the voting rights. As such, management is highly incentivized to optimize returns and not dilute shareholders.
Valuation DRX stock is up 23% over the last month, which we still believe is an underreaction to the two massively positive announcements. ADF trades at 4.3x/3.9x FY24E/FY25E EBITDA compared to steel fabricators at 6.3x/7.2x and Canadian industrials at 10.2x/9.5x (most of which are posting lower growth). We also remind readers of the insider buying from Director Jean Rochette, who purchased 7,600 shares in late October. We continue to believe that ADF is still largely undiscovered amongst institutional investors and it is only a matter of time before the multiple re-rates to higher levels. We continue to value ADF on 6.0x FY25E EBITDA and due to our increased EBITDA estimates, our target price has increased to $10.00/share.
In an going on vacation friday so have a nice holiday seasonand see you in 2024