What companies come to your mind?
Related: Continuing my own research, I read the Key Ratios for ATS on the 5i site.
PE 45, a bit high for my liking
But concensus EPS for next 4 Qs totals $6.56
At today's stock price, that's a PE of 11.5; that sounds terrific
ROE and Revenue Growth stats look good.
I'd like your commentary on this...."analysis"; moreover, what do you see in the Key Ratios that a retail investor should take note of (ATS, and/or generally).
Many thanks.
Generally speaking (some sectors have differences) we like to focus on: gross and net profit margin, sales growth, debt to cash flow, return on equity, return on capital, free cash flow, dividend payout ratios (where applicable) and market share (sometimes hard to get) amongst other metrics to examine. If we look at forward earnings for ATS (March year end, so March 2025), P/E is 18.5X. Not 11X, but still quite decent considering its high expected growth rate. If looking at recession-resistant companies, companies with large backlogs come to mind. ATS does have a backlog, but companies such as WSP, GIB.A and STN have larger book orders. Software companies with recurring revenue and maintenance revenue such as CSU, KXS, LMN also come to mind. One of the reasons the AI boom is happening is because AI should result in significant cost savings to customers, so we would include that sector here, though of course valuations are reflecting this growth expectation.