Post by
retiredcf on Feb 12, 2023 8:06am
Another Assessment
ATS is a fairly unique company, at least in Canada, and we would agree it looks like it has a strong long term future ahead of it. It has a long history and has been through many cycles. In addition to the 'onshoring' theme its automation/robotics business is also positioned very well overall. At one time I owned 14% of the company through a fund I managed at Mutual Life (bought by SunLife) so while this was years ago, I have toured their plants at the time and certainly knew the company well. Debt has increased, and that is probably the main risk right now. But earnings and sales growth look good and the backlog adds visibility. The current forward P/E of 20X is actually at the low end of its 10-year valuation range. Shares have done well, but earnings are increasing at a faster rate than the share price. Thus, we would be OK buying at least a starter position. We do consider it one of the best industrial stocks right now. Also, with a $5B market cap, it is now getting big enough to attract global investors. (Peter Hodson - 5iResearch)