Atkore Inc. (ATKR), a leading industrial products manufacturer, has three major segments: Electrical, Cable Solutions, and Tubing Solutions. The Electrical segment produces conduit and cable management solutions for commercial, industrial, and residential electrical systems. The Cable Solutions segment offers cable management solutions for the communications and energy industries. Lastly, the Tubing Solutions segment produces metal tubing products for HVAC, refrigeration, and industrial applications.
as of February 9, 2023
M&A has created a strong and durable competitive advantage for Atkore as the company continues to beat earnings estimates. Now guiding for a per share profit north of $16 on the low side for 2024, and with the median P/E ratio for the sector at 17x the stock could be a $200 number. We’ll see, but what Atkore does provide for long-term investors is incredibly stable financial standing. On $3.9 billion in sales, 42% comes down as gross profit and then 23% as net profit. What is really important here is that Atkore can do this with less than $2.6 billion in total assets, of which only $900 million is allocated toward Property, Plan, and Equipment (PPE). This is why return on assets is 32% and return on equity is 78% currently.
