Delivery Timing Shifts Drive Guidance Cut at Astec Industries (ASTE) Despite Strong Order Bookings

The Easterly Snow Capital Small Cap Value Fund is a U.S. open-end equity mutual fund managed by Easterly Asset Management, sub-advised by Snow Capital Management. The letter can be downloaded here. The Easterly Snow Small Cap Value Fund fell 4.04% in Q3 2026, outperforming both the Bloomberg US 2000 Value Index (-7.26%) and Russell 2000 Value Index (-4.91%). Sharply higher Treasury yields, renewed Fed rate hikes, inflation concerns, geopolitical tensions, heavy government and AI-related corporate borrowing, and concentrated equity-market gains pressured markets. The fund's outperformance came from stock selection despite sector-allocation headwinds. Management remains optimistic about attractively valued small-cap companies, emphasizing strong balance sheets, free cash flow, improving fundamentals, and potential benefits from AI investment, manufacturing growth, energy security, and reshoring. Also, check the Fund's top five holdings to see its best picks for 2026.

In its Q3 2026 investor letter, Snow Capital Small Cap Value Fund highlighted Astec Industries, Inc. (NASDAQ:ASTE). Astec Industries, Inc. (NASDAQ:ASTE), a manufacturer of specialized equipment for asphalt road building, aggregate processing, and concrete production, detracted from performance this quarter. As of October 29, 2026, Astec Industries, Inc. (NASDAQ:ASTE) closed at $39.91 per share with a $917.64 million market capitalization. Astec Industries, Inc. (NASDAQ:ASTE) fell 4.98% over the past month, extending its 52-week decline to 14.23%.

Snow Capital Small Cap Value Fund stated the following regarding Astec Industries, Inc. (NASDAQ:ASTE) in its Q3 2026 investor letter:

"Astec Industries, Inc. (NASDAQ:ASTE) detracted from overall performance as the company lowered its 2026 profitability guidance, primarily due to a shift in the timing of selected asphalt plant deliveries within its Infrastructure Solutions segment. Management reduced its full year adjusted EBITDA outlook to $160–$175 million from $170 $190 million, citing rising interest rates and prolonged tariff effects that are pushing certain deliveries into Q4 and, in some cases, Q1 2027. Management emphasized that this was primarily a timing issue rather than a deterioration in demand. Asphalt plant bookings were described as comparable to the prior year, with improvement in June and July ranking among the strongest booking months. Parts bookings were also strong in July. We believe Astec could benefit from ongoing U.S. economic strength related to roadwork, mining, and data-center construction. The company ended Q2 2026 with net leverage of 2.2x, within its stated 1.5x–2.5x range, after completing more than $300 million in acquisitions over the preceding year. Available liquidity totaled $266 million. Despite its underperformance, we believe Astec remains attractively valued at 12.8x estimated 2026 earnings. A healthy demand backdrop, strong bookings, improving Materials Solutions activity, and continued confidence in management's 2030 framework could support a higher valuation over time."