Atkore (ATKR) Declined on Worse-Than-Expected Results and Lowered Guidance
River Road Asset Management, an investment management company released its 'River Road Small-Mid Cap Value Fund' Q4 2024 investor letter. A copy of the letter can be downloaded here. In the fourth quarter, AMG River Road Small Cap Value Fund (Class N) returned 3.67% compared to -0.26% returns for the Russell 2500TM Value Index. For the year 2024, the fund returned 12.46% compared to the Index return of 10.98%. For more information on the fund's best picks in 2024, please check its top five holdings.
In its fourth quarter 2024 investor letter, River Road Small-Mid Cap Value Fund emphasized stocks such as Atkore Inc. (NYSE:ATKR). Atkore Inc. (NYSE:ATKR) manufactures and distributes electrical, mechanical, safety, and infrastructure products and solutions. The one-month return of Atkore Inc. (NYSE:ATKR) was -5.28%, and its shares lost 68.55% of their value over the last 52 week. On April 1, 2025, Atkore Inc. (NYSE:ATKR) stock closed at $60.02 per share with a market capitalization of $2.065 billion.
River Road Small-Mid Cap Value Fund stated the following regarding Atkore Inc. (NYSE:ATKR) in its Q4 2024 investor letter:
"The holding with the lowest contribution to active return in the portfolio during Q3 was Atkore Inc. (NYSE:ATKR), a branded manufacturer of products that protect and frame electric circuitry (including PVC conduit). ATKR delivered worse-than-expected Q3 2024 results and lowered 2024 EBITDA guidance by -11% due to higher amounts of imported steel conduit entering the market and a slower summer construction season. Steel conduit imports from Mexico have risen sharply over the past year in violation of existing trade agreements. ATKR has lost market share and has cut pricing in steel conduit, which is roughly 20% of total ATKR revenues. A Donald Trump administration is likely needed for effective trade enforcement. Weakness in residential, construction, and utility end markets led to lower-than-expected volumes and pricing. We believe ATKR's balance sheet remains in great shape with net leverage of only 0.6x and year-to-date free cash flow generation of $245MM has largely been used to fund $281MM of year-to-date share repurchases. We took no action on the position during the quarter."
A technician on a ladder inspecting the electrical components of an industrial building.
Atkore Inc. (NYSE:ATKR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held Atkore Inc. (NYSE:ATKR) at the end of the fourth quarter compared to 36 in the third quarter. In the fiscal first quarter of 2025, Atkore Inc. (NYSE:ATKR) reported net sales of $662 million and adjusted EBITDA of $99 million. While we acknowledge the potential of Atkore Inc. (NYSE:ATKR) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
We covered Atkore Inc. (NYSE:ATKR) in another article, where we shared Riverwater Partners Sustainable Value Strategy's views on the company. In addition, please check out our hedge fund investor letters Q4 2024 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.
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