ATS has essentially been flat over the past 4 years and CJT is down quite a bit. Do you think the outlook going forward is better for them?
Given ATS' focus on manufcturing automation, the performance over the last year has been a bit dissapointing. The company is undergoing a CEO search currently which adds a bit of an overhang here as well. With that said, at 18X forward earnings and for a company that has typically grown in the mid-teen levels on the top-line, we think ATS should do fine here over a 3-5 year holding period. EPS is expected to grow at a faster rate (25%) and it has been a good operator in the past. We might wait for the new CEO to be up and running to get a better idea of the company's plan going forward, however.
On CJT, the news of the contract with Amazon was a positive but it is a company we have typically struggled with. Debt is high and it can be a cyclical company with chunky profitability. The valuation looks ok but only single digit top-line growth is expected here for the next few years.