ATS Automation Tooling Systems (ATS.TO)

Automation is here to stay. They have great experience and lots of opportunities.

Strong business with automation business. Good for long term investors. Current share price a good place to buy. Expecting 29% growth rate for the next few years. Good time to buy. 

Likes it, but always looks so expensive. Fairly good recurring revenue. Margins have held up well. Not bad for growth. PE of 35x, price to book of 3.5x, expensive.

ATS share price has been under pressure recently along with the broad market, as the market sentiment factors in the scenario that interest rates may stay higher for longer, which not only impacts growth in orders for industrial space such as ATS, but also the valuation multiple that investors are willing to pay for high-growth name such as ATS. Having said that, ATS’s valuation is still attractive, in our view. ATS has been well-run over the years, and it has a decent backlog and fairly visible growth. Its recent acquisitions also look good. 'Future' orders might be impacted in a recession, but we would say that pretty much anytime.
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It designs, makes and installs automatic manufacturing systems globally and has a huge backlog. It is well known in the life sciences field which is a big part of its business. It also has a specialized battery division, is involved with nuclear reactors, consumer products, transportation, etc. It is M&A driven and makes selective acquisitions.

One of the best performers this year. Keeps announcing more contracts, backlog's growing. Focused on life sciences and EV assembly plants. Picking high-growth niche areas. Not cheap, but the sky's the limit.

Pullbacks don't last long on this stock. Sweet spot. High-growth areas such as battery production and health sciences, where they provide turnkey solutions. Not cheap. Buy it on a dip and put it away.

ATS is an industry-leading automation solutions provider to many of the world's most successful companies. It uses its extensive knowledge base and global capabilities in custom automation, repeat automation, automation products, and value-added services to address the sophisticated manufacturing automation systems and service needs of multinational customers in markets such as life sciences, food & beverage, transportation, consumer products, and energy. Founded in 1978, ATS employs over 6,000 people at more than 50 manufacturing facilities and over 75 offices in North America, Europe, Southeast Asia, and China.Results for the 2nd quarter ended October 2, 2022, were not spectacular. While revenues at $588.9 million were up 12.8 % over the comparable prior year period, net earnings at $29.5 million were basically flat due largely to higher finance costs ($6.2 million, to finance the acquisition of SP) and income taxes ($3.1 million). Adjusted EBITDA at $88.8 million was up 6.6%. Cash at the end of the quarter amounted to $95.2 million after utilizing $44.7 million during the period primarily due to changes in non-cash working capital. The debt-equity ratio is 1.26. With a large backlog ($1.8 billion), established operations and markets as well as experienced management ATS should find opportunities ahead.
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Great chart. 
Good time to buy.
Would suggest buying.

Machinery companies are doing well and automation is here to stay. Has sold equipment to companies like Amazon. Its business is also in health care, consumer products and now EV. It also benefits from the re-shoring of manufacturing in North America.

Good Canadian company.
Will perform well over the long term.
Has out performed the market the past few years.
Automation demand growing. 
Multiples a little high, but deserves success.

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Long-term demand for automation. Operates in a cyclical business. Heavier exposure to non-cyclical segments. Diverse supply base. Unlock Premium - Try 5i Free