2. Short term assets do not cover both short term liabilities or long term liabilities. Any concern about buying ATD now?
3. They have lost low end customer loyalty last quarter. Do they have plans to increase sales? Any concerns about buying ATD now?
Insider sales could be for different reasons including personal ones. ATD insiders still own a lot, and the stock is up 25% in a year, so some selling is justified and the dollar-value of exposure is still likely higher than last year even with some selling. ATD has been a consistent executor in the industry, and a couple of earnings misses should not change the long-term prospects of the business. Historically, most retailers are able to run a negative working capital, and we think this is totally fine given the healthy cash flow generation and characteristics of most retailers. Inflation may put some pressure on consumer spending, especially at the lower end, but again the long-term prospects of the business does not change that much. We remain a long-term supporter of ATD here. 3) Customers are being squeezed in general and ATD is not unique here. The company did recently sign a deal (Too Good to Go) to increase traffic. For long term investors we would have no real concerns buying ATD today.