Darspal S Mann
Long/short equity, growth at reasonable price, special situations, deep value

AEP Industries Is Ready To Benefit From Any Softness In Resin Prices

AEP Industries Inc. (NASDAQ:AEPI) stock, which is down almost 50% over the last year, is bearing the brunt of a major increase of PE resin costs, raw material for the company's flexible packaging products, and the company's inability to increase prices fast enough. This, combined with badly timed acquisitions, debt, bad weather at the seasonally weakest time of the year and the high fixed-cost nature of the business are good enough reasons to scare off bulls of any color.

Which is why this may be one of the best time to take a closer look at the name. The fundamentals of the business don't seem to share the extreme pessimism reflected in the stock. Even though volatility in...

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