Why One Fund Put 12.6% of Its Portfolio Into Axalta — and What $294M EBITDA Says About the Stock
Key Points
New York City-based Atlantic Investment bought 764,000 shares of Axalta Coating Systems in the thidr quarter.
The transaction resulted in a position that is 12.6% of the fund's 13F reportable assets under management.
As of September 30, Atlantic reported owning $21.9 million worth of AXTA stock.
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New York City-based Atlantic Investment Management disclosed a new position in Axalta Coating Systems (NYSE:AXTA) in its November 14 SEC filing, acquiring 764,000 shares valued at approximately $21.9 million.
What Happened
According to a filing with the Securities and Exchange Commission dated November 14, Atlantic Investment Management initiated a new position in Axalta Coating Systems, acquiring 764,000 shares during the third quarter. The stake was valued at $21.9 million at the end of September, representing a significant addition to the fund’s portfolio over the quarter.
What Else to Know
This new position accounts for 12.6% of Atlantic Investment Management, Inc.’s reportable U.S. equity assets as of September 30.
Top holdings after the filing:
- NYSE:GTLS: $29.5 million (17% of AUM)
- NYSE:APTV: $26.3 million (15.1% of AUM)
- NASDAQ:WFRD: $24.7 million (14.2% of AUM)
- NYSE:AXTA: $21.9 million (12.6% of AUM)
- NYSE:OSK: $19.3 million (11.1% of AUM)
As of Thursday, AXTA shares were priced at $29.17, down 28% over the past year and well underpeforming the S&P 500, which is up 12.5% in the same period.
Company Overview
| Metric | Value |
|---|---|
| Price (as of Thursday) | $29.17 |
| Market capitalization | $6.2 billion |
| Revenue (TTM) | $5.2 billion |
| Net income (TTM) | $455 million |
Company Snapshot
- Axalta Coating Systems produces and distributes high-performance coatings, including water- and solvent-borne systems, liquid and powder coatings, and electrocoat products for automotive, industrial, and commercial applications.
- The company generates revenue through the sale of coatings systems and related products, serving both original equipment manufacturers (OEMs) and aftermarket repair shops globally.
- Its main customers include independent body shops, multi-shop operators, OEM dealership body shops, and a broad range of industrial manufacturers across North America, EMEA, Asia Pacific, and Latin America.
Axalta Coating Systems is a global leader in specialty coatings, operating at scale with a diverse product portfolio and a presence in key international markets. The company leverages its technological expertise and established brands to serve both automotive and industrial end markets.
Foolish Take
Axalta’s inclusion as a sizable new holding matters because it gives investors a window into where value-oriented managers see underappreciated operating strength—despite the stock’s sharp volatility this year. The company just posted its 12th straight quarter of year-over-year adjusted EBITDA margin expansion, and record third-quarter EBITDA suggests the business might be performing far better than the share price implies. For a fund that concentrates positions, dedicating more than 12% of its equity book to Axalta signals conviction in that underlying momentum.
In its latest earnings report, Axalta delivered $1.3 billion in revenue and $110 million in net income—all while navigating weaker North American demand. The company also repurchased $100 million in stock during the quarter and plans to deploy up to $250 million more in the fourth quarter, which could boost per-share metrics if execution remains steady.
For long-term investors, the takeaway is that Axalta is showing disciplined cost control, resilient end-market demand overseas, and consistent margin gains. Those fundamentals may offer a more durable foundation than the stock’s recent swings suggest.
Glossary
Assets under management (AUM): The total market value of investments managed by a fund or investment firm.
13F reportable assets: U.S. equity securities that institutional investment managers must disclose quarterly to the SEC via Form 13F.
Position: The amount of a particular security or asset held in a portfolio.
Stake: The ownership interest or share an investor holds in a company.
Original equipment manufacturer (OEM): A company that produces parts or equipment that may be marketed by another manufacturer.
Aftermarket: The market for replacement parts, accessories, and services after the original sale of a product, especially vehicles.
Multi-shop operators: Companies that own and operate multiple auto body repair shops under a single organization.
Electrocoat products: Coating materials applied using an electrical current, often for corrosion protection in manufacturing.
Powder coatings: Dry finishing process using powdered paint, commonly applied to metal surfaces for durability and protection.
Solvent-borne systems: Coating products that use solvents to dissolve resins and facilitate application.
TTM: The 12-month period ending with the most recent quarterly report.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Aptiv and Chart Industries. The Motley Fool has a disclosure policy.
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