Post by
retiredcf on Apr 03, 2023 7:56am
Another View
With a mid-sized growth company, we typically see stock strength as confirmation of a theme rather than a concern. As ATS gets bigger, assuming nothing goes wrong, it will attract a wider field of new investors. With EPS likely to double from 2022 to 2024E, we would not consider 24X earnings that expensive. The balance sheet is still leveraged with $1B debt, likely 4X cash flow this year. Investors may be expecting a stock issue, but it doesn't do many. In 10 years the share count has only grown from 87.9M to 91.8M. But sales have tripled and earnings quadrupled in that time. These are more reasons to like it. So we like growth and management, and dislike (a little) the leverage and valuation. We would be fine adding and it is a big position in our growth portfolio. (5iResearch)