Hi there TO. I’ve been doing a bit of "lurking", as you sometimes do, and came across your Board which concentrates on APC.
You stated the following, which included a question or two ...
" APC has been a great stock the past couple of years.
Is it time to take profits or let it ride?
Any opinions welcome."
Needless to say, you will probably know a lot more about the "inner workings" of APC, and all that that entails. All I could do at short notice was to look at its Annual and Quarterly Financials.
Yes, you’re quite right when you comment on APC’s performance over the past couple of years. It’s Fundamentals have been good, except maybe for the last 12 months or so.
When I first opened their Financials, I looked at their last 5 Annuals and was initially impressed at how their Turnover had increased at a steady rate over the previous years, e.g. from 17% to 43.5% to 56%, in the last 4 years.
I then moved down to their EBITDA and saw that they’ve certainly had a good Annual Margin, way in excess of 60%. However, it’s been declining due, mainly, to their increasing CoS.
Something else that’s been increasing in the last year or so has been Debt and its cost, which has reduced profits.
All in all, we see that Turnover went up in the last year from about $10.2bil. to about $15.9bil., yet Bottom Line has decreased from $4.85bil. to $3.78bil.
Not very encouraging.
And that is reflected in its last 3 Quarterlies where T/O has declined from $3.3bil. to $3bil. to $2.9bil., and Bottom Line from $0.62bil. to $0.5bil. to $0.15bil.
I see that its Quarterly EBITDA Margin has also been declining, although it still remains good at 50%.
Looking at its medium term chart we see that it recently failed to exceed its previous high of 3 months ago, and has since declined by about 5%, although that’s probably not a train smash.
However, failing to exceed that previous high could indicate that "the Market" may be losing enthusiasm for the stock, which could be a reflection of the recent decline in its Fundamentals.
You ask if one should take profits, or let it ride.
Well, it seems to me that APC needs better performance at the Turnover level and preferably a reduction in its debt.
Now you would know better than me where APC’s business comes from and how likely it will be that it could increase its Gross Revenue.
If you can’t see much light at the end of the tunnel in that regard, then it could well be time to take, say, 50% profit now and wait for its next Quarterly or Profit Update. If that’s negative then you may want to take the other 50% !
Best wishes ... ! |
