Winds at the Back of Atlas Engineered Products $AEP.V

It could be a tidal wave in the longer term

Atlas has been in the portfolio for some time now and I’ve been pleased with the progress of the business to date. They have continued to make meaningful acquisitions, at times have bought back stock and have hinted at some operational improvements that could meaningfully improve margins in the years to come.

In the last few months though, there have been higher level perturbations stirring the otherwise murky waters in which the Atlas ship sails. I’m not one to mix politics with investment thesis and I honestly wouldn’t give much credit to any of these tailwinds because of that. However, the headlines supporting the housing industry supply crunch’s future cannot be ignored, much like the siren’s song. I’d rather be involved in a growing business that operates with tailwinds over 1, 5, 10 year periods than the opposite.

Manufactured Housing Funding

• The 2024 Federal Budget proposed a new Homebuilding Technology and Innovation Fund, allocating $50 million to scale up and promote innovative housing technologies, including modular and prefabricated homes

• The Canada Mortgage and Housing Corporation's Apartment Construction Loan Program earmarked at least $500 million in low-cost financing for new apartments built using prefabricated or innovative homebuilding techniques

• The federal government announced over $600 million in funding for homebuilding innovation initiatives, including: