Atlas Engineered Products Ltd V.AEP

Question about 2023 vs 2022 results

[SurfForWealth]

I am doing my research deciding whether to buy in or not. Thinking the price seems a bit high here. So all the analysts are looking forward with this stock with their rose coloured glasses. That may be because all of them except Raymond James were involved in the June share issue.

Looking at the Sept Company Presentation it looks like the numbers dropped a lot between 2022 & 2023. The large acquisition in New Brunswick (LCF) closed on Aug 23 2023.  The revenue in 2023 declined 20% and if you factor in (remove) the Rev from LCF the rev would have been down 33%. See page 8 of the Q2 report. Net income in 2023 declined 64% and if you remove the LCF portion of $1.498 M it would have declined 81%. Those are substantial declines. I have read the YE 2023 MD&A but not sure I accept the factors provided as explaining the large drop. Seems like there is more to the story.

I welcome any thoughts from those that have been here a while or those that understand the story better than I do.

[redcoats]

It's not about yesterday. It's about tomorrow!

[nedstar71]

Posts like this are what make stockhouse worth reading, thanks...I remember SurfForWealth from the Bennett.Environmental board many many years past....in what feels like another lifetime ago now.  

[SurfForWealth]

Hi Nedstar71, That made me smile. Yes that would have been me. I started on SH in 1999 and was very active for a few years. Then I guess I went dormant for many years. Been coming back to life lately on a small number of boards. Had a small private investor chat group going. The guy I started it with passed away last year. He was a securities lawyer and a great investor. It has since disolved. Are

[JSpark]

Echelon notes from Summer 2023, regarding 2022/2023: 23 will be a corrective year, in part due to the lagged impact of the 2022 housing market price correction finally  slowing down activity for homebuilders. This has been the case with Atlas’s Q123 and Q223 results, which have  shown an outsized slowdown in sales with declines of 23% y/y in Q123 and 33% y/y in Q223. However, most

[SurfForWealth]

JSpark, Thank you. That is very helpful. I feel more comfortable now. Started a position yesterday and will look to add on dips. When a micro cap company starts doing a lot of acquisitions there is bound to be choppiness for a period of time. I will look for progress in the almalgamation of these different assets. It has been a while since I held a micro cap stock. They can be risky. 

[savyinvestor333]

Hello SurfFor Wealth. Yes they can risky but also very rewarding. I think you were in Macro Pipelines back around 10-12 years ago.as was I. That stock went from sub $.50 to $7.00 and made me a ton of money. Hope you did well also. I have been in this name since the low $.60's and actually have been adding as recently as Yesterday and this morning. GLTA

[SurfForWealth]

Hi Savy, I was in Macro. Not as early as you and did not do that well on it. It was a very frustrating stock for me. I think I have seen you post on the Aecon & possibly Bird boards. I am in both and they have been good to me. I mostly stick to larger stocks than AEP these days. I did double my position today in AEP. Still looking to add more. 

[nedstar71]

No don't hold this but it's on my watch list.  Some great info there from Jspark.  Back in the Bennett days I had a different handle.  Now almost strictly an income, albeit semi risky income investor these days.  Also own Aecon, my largest position.  Usually I'd take some off the table after a double but in that case I think I'd regret it a year out. Will