I have been a holder of ATD since 2016 and decided to sell the majority of my holdings because of current market conditions.
Just wondering if I jumped the gun on this one.
Your comments would be appreciated
Rick
The decline can't be ignored, but the recent weakness in ATD's results are related to fuel margins and a general slowdown in consumer spending, which is occurring at other companies as well. We feel its fundamentals remain attractive and its track record of value creation is still there. We continue to like the name, especially for a long-term hold.
In terms of support levels, it is on rising uptrend since 2020, and so far the uptrend has not really been broken. There are many support levels, and some of which are in the $60s, but we prefer to look at its valuation in terms of historical averages. Its forward EV/EBITDA is trading right in line with its 10-year average, but its forward P/E is slightly above historical averages (5% above its 10-year average). This does not signal that there is much downside potential in valuation, and while the results were not great, we continue to like this name as a long-term hold.