As well, what is your opinion of ATS going forward?
Thanks for your continued expertise Stephen
CAE is profitable and backlog is strong but the issue here is margins in the defense segment of the company. CAE acquired its defense segment in 2021 and it has continuously been working to improve the margins of it since. The company inherited some fixed price contracts which are plaguing margins due to the high inflationary environment we are now witnessing, so CAE is now working to clear those contracts of its backlog. The process here has been slow and recent quarterly earnings did not display much improvement in this area, investors are getting antsy. The civil area of the business continues to remain strong. We would continue to hold CAE and monitor the situation in the defense segment, but this may take time.
We continue to like ATS, especially at current valuation levels. We think that ATS' business is very relevant in today's environment and it has a strong track record of integrating acqusitions. We need to see the backlog rebuild but do have some confidence it will.