This Fund Cut $7.3 Million of Atlas Energy Stock as the Company Suspends Its Dividend to Help Fuel Growth
Key Points
Delaware-based Ashford Capital Management sold 448,400 shares of Atlas Energy Solutions for an estimated $7.3 million in the third quarter.
Following the sale, the fund disclosed still holding 665,135 shares valued at approximately $7.6 million.
The Atlas Energy Solutions stake now represents approximately 0.8% of AUM, which places it outside the fund's top five holdings.
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On Friday, Delaware-based Ashford Capital Management disclosed a sale of 448,400 shares of Atlas Energy Solutions, reducing its position by approximately $7.3 million during the third quarter.
What Happened
Ashford Capital Management reported in an SEC filing on Friday that it sold 448,400 shares of Atlas Energy Solutions (NYSE:AESI) during the third quarter. The estimated value change of the position, calculated as the difference in value from the previous period, was approximately $7.3 million. Following the transaction, the fund’s remaining stake consisted of 665,135 shares worth $7.6 million at quarter-end.
What Else to Know
Top holdings after the filing:
- NASDAQ: GSAT: $51.3 million (5.7% of AUM)
- NASDAQ: LGND: $43.3 million (4.8% of AUM)
- NASDAQ: ODD: $34.2 million (3.8% of AUM)
- NASDAQ: SNEX: $31.6 million (3.5% of AUM)
- NASDAQ: CLBT: $31.5 million (3.5% of AUM)
As of Monday, shares of Atlas Energy Solutions were priced at $8.70, down 56% over the past year, compared to a nearly 15% gain by the S&P 500 during the same period.
Company Overview
| Metric | Value |
|---|---|
| Price (as of Monday) | $8.70 |
| Market Capitalization | $1.4 billion |
| Revenue (TTM) | $1.1 billion |
| Dividend Yield | 11.2% |
Company Snapshot
Atlas Energy Solutions Inc. operates at scale within the energy sector, focusing on the supply chain needs of oil and gas producers primarily in the Permian Basin of West Texas and New Mexico–one of North America's most active basins. The company leverages its logistics infrastructure and specialized proppant offerings to support efficient and cost-effective drilling operations. A high dividend yield and significant revenue base underscore its position as a key service provider to upstream energy clients.
Foolish Take
Ashford's decision to trim its stake in Atlas Energy comes amid a prolonged downturn for the stock. Shares have plunged 61% this year alone, and the firm's third-quarter results showed a business navigating a weak completions market, margin compression, higher operating costs at its Kermit facility—and a suspended dividend. That combination signals challenging near-term cash returns even if there are also opportunities for a strategic pivot toward long-duration growth, particularly in the company’s rapidly expanding power platform.
Atlas posted third-quarter revenue of $259.6 million, down 15% from last year, while adjusted EBITDA fell to $40.2 million from $71.1 million last year. Free cash flow dropped to $22 million, and net income swung to a $23.7 million loss. Management suspended the dividend to "safeguard" liquidity and help fund growth—including more than 400 megawatts of targeted power deployment by early 2027 and a 240 MW equipment order scheduled for 2026 delivery.
Against that backdrop, Ashford’s partial exit—trimming $7.3 million while still holding a meaningful $7.6 million position—aligns with its strategy of concentrating capital in durable small-cap operators while managing position-level risk. Long-term investors might still be rewarded, but short-term volatility seems likely to be inevitable.
Glossary
Assets Under Management (AUM): The total market value of all investments managed by a fund or investment firm.
Proppant: A material, such as sand, used in hydraulic fracturing to keep underground fractures open for oil and gas extraction.
Dividend Yield: A financial ratio showing how much a company pays in dividends each year relative to its share price.
Upstream: The segment of the energy industry involved in exploring for and producing oil and natural gas.
Permian Basin: A major oil- and gas-producing region in West Texas and southeastern New Mexico.
Reportable Assets: Investments that an institutional manager must disclose in regulatory filings, typically above a certain threshold.
Stake: The ownership interest or shareholding a person or entity has in a company.
TTM: The 12-month period ending with the most recent quarterly report.
Logistics Services: Services that manage the transportation, storage, and delivery of goods, especially for supply chains.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cellebrite. The Motley Fool has a disclosure policy.
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