A Look At Spruce Point Capital’s Short Thesis On Ametek, Inc. (AME)

Earlier today (and as speculated by ValueWalk yesterday), Spruce Point Capital released its short thesis on manufacturing conglomerate Ametek, Inc. (NYSE:AME) claiming that the company manipulates its books in a variety of ways and that the stock has a downside of 30% - 50% (down about 3% at the moment, with plenty of volatility). The report is a monster, nearly 900 pages including all the supporting documents, but the thesis revolves around the way that Ametek has pursued growth through acquisitions.

“Given our concerns about aggressive acquisition and inventory accounting, Ametek’s true EBITDA margin may be 400-600 bps lower than reported. Our opinion is also supported...