ATS had a tough quarter, but we would not consider one bad quarter to mark a material fundamental change to the company. Overall, the company continues to grow, demonstrate a strong management team, and is not trading at exorbitant valuations. We continue to like the name and do not feel that anything material has changed. Sales are expected to slow in the coming years, but the company can always exceed these expectations, and historically it has a good track record of beating estimates.
KXS is expected to grow sales 17% next year, 20% the year after, and 19% the year after, which we consider high growth. The name has been consolidating over the past several years as its valuation has compressed. We do not consider any fundamental change to have occurred at KXS, but rather sideways price action while its fundamentals 'grow into its valuation'. In replacement of KXS we like DSG, TCS, or DCBO.