Astec Industries: Strong Balance Sheet To Help Navigate Current And Potential Headwinds

Apr. 27, 2023 9:30 AM ETAstec Industries, Inc. (ASTE) StockASTE
Carles Diaz Caron
1.07K Followers

Summary

  • Net sales have set a new record in 2022 and are expected to increase again in 2023 and 2024 as the backlog is unusually high.
  • The company's profit margins remain depressed as a consequence of current macroeconomic headwinds.
  • The company's debt doesn't represent a significant risk as inventories are unusually high.
  • The dividend is safe and the management will likely be able to execute its ambitious share repurchase program thanks to historically low cash payout ratios.
  • This represents a good opportunity to acquire shares of the company at reasonable prices.

Ciudades en crecimiento

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Investment thesis

Astec Industries (NASDAQ:ASTE) is currently facing a very complex macroeconomic context. Inflationary pressures, supply chain tensions, labor shortages, and increased production costs are causing a significant negative impact on the company's gross profit and EBITDA margins. Furthermore, investors are

This article was written by

1.07K Followers
Subscribe for an average ~14% return per year according to Tipranks. I am a long-term Dividend Growth Investor always looking for new opportunities in the stock market since 2015. In order to find good deals in the stock market, I look for companies that are going through a bad time and carefully assess the chances that the financial situation will return to the path of profitability and growth. My objective is to find stocks that can be bought and held for many years and try to get them for the lowest price possible during temporary headwinds. For me, the most important aspects when analyzing a stock's turnaround chances are that the company's products are essential to a big portion of the population, healthy and stable profit margins, a sustainable debt and dividend, and a long-term trend that suggests the products and services offered will continue to be essential for the decades to come.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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