Consistently generating alpha on the short side
2024 was the largest alpha year in OWS's history - an equal-weighted basket of their short ideas outperformed the inverse of the S&P 500 index by 21.3 percentage points, with Atkore, Nucor and Upwork outperforming the most. They showed an impressive consistency, beating the index in each quarter. In Q4, OWS initiated 4 new short recommendations including Penumbra and Signet Jewelers. At the end of year, they had 17 short recommendations outstanding. For 2025, they see opportunities in cyclical setups, AI and in speculative small caps.
Edition: 202
- 10 January, 2025
Industrials
Another successful short idea from The Bindle Paper - with the recent decline in ATKR’s price, the stock is very close to their TP of $75 and they recommend covering for a 45% gain. Click here to access their initiation report where they argued that ATKR is a commodity company generating outsized returns on invested capital/margins, and the combination of weak structural demand, soft end market demand, increased competitive intensity, and rising imports along with inventory destocking at distributor customers would lead to earnings misses for the company over the next 12-18 months.
Edition: 195
- 20 September, 2024
Industrials
“Capex supercycle” beneficiary - US assets are at an all-time high average age, necessitating investment, even amid deteriorating economic conditions. ATKR, a supplier of critical, but often-overlooked, parts to data centre and IoT-related end-markets, has become a leader in niche infrastructure markets. By consolidating the space and focusing on parts that represent a small portion of total project spending, ATKR has been able to offset inflationary supply pressures. As such, with secular demand drivers and the capacity to expand profitability, equity upside may be warranted.
Edition: 147
- 28 October, 2022
Industrials
Has been benefitting from an unusual spike in the sales price of a key product line - however, PVC production along the Gulf Coast has now resumed and the supply chain is refilling. This will make it impossible for ATKR to maintain the margins that resulted from an 80%+ price increase in its core products. Asian prices are already collapsing on the decline in import demand, while European prices are only being held up due to planned maintenance downtime. The stock looks incredibly expensive and with margins set to collapse, Eric Fernandez sees substantial downside from here.
Edition: 125
- 10 December, 2021