Q: Can you provide a current opinion on AFN
5i Research Answer:
AFN is very cheap right now at 8x forward earnings and Q1 results were quite weak highlighting some demand weakenesses. The company reaffirmed its full year guidance and stated that orders were being pushed into the second half of the year. Backlog grew nicely and continues to be strong. Q2 results will be posted tomorrow and we would watch to see if guidance continues to be maintained to provide insight on demand trends. We have concerns regarding the debt level and cyclicality of the business, but in upcycles AFN has executed well. It continues to be a hold for us, but Q2 and second half results will be key.