Q: What is your analysis for Act Energy Technologies Ltd, during and post Trump Tariffs?
5i Research Answer:
ACX is a clean energy hardware manufacturer, which has been facing challenges both during and after the US tariffs. Tariffs on materials like aluminum and steel raised the costs for clean energy products, and the retaliatory tariffs from Canada have created uncertainty for businesses operating across the border.
ACX is a small name ($169M market cap) with a cheap valuation of 4.7X forward earnings, but sales growth is expected to be fairly muted over the next few years. Margins and free cash flow are good, and it has a strong balance sheet, but it needs stronger sales growth to really capitalize on these fundamentals. The long-term trend for its share price has been negative, but it has been holding up nicely since 2022.