- ADF Group (TSX:DRX), a multi-bagger industrial stock, has secured C$90 million in new contracts in Quebec, Western Canada and the U.S. Midwest, bringing its total order backlog to more than C$600 million
- The company has grown net income by more than five times since 2021
- ADF Group is focused on the design and engineering of connections, fabrication, industrial coatings, complex steel structures and heavy steel build-ups for North American clients in the non-residential infrastructure sector
- ADF Group stock has added 595.22 per cent year-over-year and 1,242.31 per cent since 2019
ADF Group (TSX:DRX), a multi-bagger industrial stock, has secured C$90 million in new contracts in Quebec, Western Canada and the U.S. Midwest, bringing its total order backlog to more than C$600 million.
The new business in the U.S. Midwest pertains to a large contract for an industrial building in the pharmaceutical sector, the first phase of which was announced in May 2023, followed by phase two in December 2023. ADF will now perform additional work related to phase two of the project, including the design and engineering of connections, industrial coating, steel supply, as well as erecting heavy steel components for the building. The company expects to wrap up work on the project by February 2025.
The new contracts in Quebec and Western Canada are in the industrial sector and public infrastructure sector, respectively.
Leadership insights
“We have the means, ample capacity, and above all the talents to deliver the projects we currently have in our order backlog, to the satisfaction of our clients, as shown by the repeat business with them,” Jean Paschini, ADF Group’s chairman and chief executive officer, said in a statement.
Has ADF Group generated shareholder value?
The answer is a resounding yes, with the stock adding 595.22 per cent year-over-year and 1,242.31 per cent since 2019, backed by:
- Double-digit revenue growth from C$179.71 million in fiscal 2020 to C$331.02 million in fiscal 2024
- Exponential net income growth from C$6.87 million in fiscal 2021 to C$37.62 million in fiscal 2024
- A steep rise in cash flow from operations from -C$2.61 million in fiscal 2023 to C$77.86 million in fiscal 2024
ADF expects to complete most of its order backlog by fiscal 2026, which ends in January, granting prospective investors about a 20-month window to capitalize on further profits from projects in hand. Investors also gain exposure to the added kicker of backlog expansions, which Paschini is confident in securing, according to a statement in fiscal Q3 2024.
Led by the three children of founder Giacomo Jacques Paschini, including Jean’s brother Pierre as president and chief operating officer, and his sister Marise as executive vice president, treasurer and corporate secretary, each of which are major shareholders who have been with the company since the 1970s, ADF tops off its value proposition with management that is squarely aligned with shareholder interests, making a strong case for picking up shares today.
About ADF Group
ADF is focused on the design and engineering of connections, fabrication, industrial coatings, complex steel structures and heavy steel build-ups for North American clients in the non-residential infrastructure sector.
ADF Group Inc. stock (TSX:DRX) last traded at C$17.45 per share.
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(Top photo of the preparation of components for a bridge construction project at ADF Group’s plant in Great Falls, Montana: ADF Group)