Fundamental Short Selling Research

Eric Fernandez, CFA

TwoRiversAnalytics

Equity Bottom-Up

<ul>
<li>ATKR saw a spike in the sales price of key PVC products and was able to extract large price increases from customers.  Sales rose by 122% and EBITDA quadrupled.</li>
<li>Now, upstream PVC resin plants are coming back online.  Atkore’s competitors will become relevant again as supply and demand rebalance over the seasonal slowdown.</li>
<li>Multiples nearly ignore the upcoming reversion.  The stock trades at record multiples of FY2 and FY3 sales, EBITDA and earnings, long past when PVC prices and margins should normalize.</li>
</ul>


ATKR saw a spike in the sales price of key PVC products and was able to extract large price increases from customers.  Sales rose by 122% and EBITDA quadrupled.
Now, upstream PVC resin plants are coming back online.  Atkore’s competitors will become relevant again as supply and demand rebalance over the seasonal slowdown.
Multiples nearly ignore the upcoming reversion.  The stock trades at record multiples of FY2 and FY3 sales, EBITDA and earnings, long past when PVC prices and margins should normalize.


We issue in-process short research ideas periodically.  Our formal recommendations will likely come from this list, although not all will make the final cut.  Here we introduce a series of names that look interesting.Atkore Inc (ATKR), Producer Manufacturing, Grocery Outlet Holding Corp. (GO) Food Retail, PBF Energy, Inc. Class A (PBF), Oil Refining/Marketing, Ping Identity Holding Corp. (PING) Packaged Software, Renewable Energy Group, (REGI) Chemicals: Specialty, Blink Charging Co (BLNK) Other Consumer Services.

We issue in-process short research ideas periodically.  Our formal recommendations will likely come from this list, although not all will make the final cut.  Here we introduce a series of names that look interesting.Atkore Inc (ATKR), Producer Manufacturing, Grocery Outlet Holding Corp. (GO) Food Retail, PBF Energy, Inc. Class A (PBF), Oil Refining/Marketing, Ping Identity Holding Corp. (PING) Packaged Software, Renewable Energy Group, (REGI) Chemicals: Specialty, Blink Charging Co (BLNK) Other Consumer Services.  

Short Ideas "On the Workbench" - Promising Shorts Under Our Research Microscope.

Over-earners are fertile hunting ground for shorts if the reasons for the margin increase are unsustainable or fraudulent.  In addition to margin sustainability, a critical judgement involves to what extent unsustainable margins are embedded in a company’s forecasts and valuations.  Here are some of the names we're seeing now.

Over-earners are fertile hunting ground for shorts if the reasons for the margin increase are unsustainable or fraudulent.  In addition to margin sustainability, a critical judgement involves to what extent unsustainable margins are embedded in a company’s forecasts and valuations.  Here are some of the names we're seeing now. 

Overearning Short Candidates: Guess?, MarineMax, Atkoe, HCA Health, Nucor

United States

Atkore Inc. manufactures and supplies metal products and electrical raceway solutions. The Company offers steel tubes and pipes, electrical conduit, armored wire and cable, cable trays, metal framing systems, and building components. Atkore International Group serves customers globally.

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Atkore Inc (ATKR US)

Atkore Inc (ATKR): Sell Short

Atkore is overearning due to a temporary supply shock which will reverse shortly. Sales & margins will drop. Estimates & valuations have not...

Eric Fernandez, CFA

Short Ideas "On the Workbench" - Promising Shorts Under Our Research Microscope.

Promising Shorts Under Our Research Microscope: Atkore (ATKR), Grocery Outlet Holding (GO), PBF Energy. (PBF), Ping Identity Holding (PING),...

Eric Fernandez, CFA

Overearning Short Candidates: Guess?, MarineMax, Atkoe, HCA Health, Nucor

Overearners are fertile hunting ground for short candidates. We highlight several names here as well as our updated overearners model update.

Eric Fernandez, CFA

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