Pitch:
– Manufacturer/seller of bulky structural building components pursuing the roll-up strategy.
– Cheap at 2.4x LTM EBITDA and 3.1x LTM EBIT.
– Market is fragmented and many companies are family owned.
– Roll-up and organic growth story regaining traction after a covid pause, with strong results over the last 1.5 years
– Higher margins due to automation and efficiency improvements.
– Exposure to the cyclical housing market.
Valuation:
– Currently trades at 2.4x LTM EBITDA and 3.1x LTM EBIT.
– With 17m fwd EBIT (vs C$12m on LTM basis) and at 6x multiple, results in C$1.5/share target.
Exp. gain: +200% to C$1.5/share
Full AEP.V write-up (free guest account required):
https://www.valueinvestorsclub.com/idea/ATLAS_ENGINEERED_PRODCTS_LTD/5737776840