Insider Buying at ATS Automation

Shares of Cambridge’s ATS Automation have been rising throughout most of 2012, but Chairman David McAusland clearly thinks there is still upside. Cambridge-based ATS Automation (TSX:ATA) has been showing signs of a bounce back from its failed Photowatt solar division for most of 2012.

But last week saw what was perhaps the most telling indication that the recovery may have legs. The company’s Chairman, David McAusland, began to buy shares of ATS in the open market.

On June 12th, McAusland bought 10,000 shares at prices ranging from $8.20 to $8.25.

Shares of ATS, which hit a low of $5.50 on December 16th of last year, have been on the march for most of 2012, hitting a high of $9.95 in April before retreating to current levels.

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Analysts have taken note of the turnaround. In April, Versant Partners analyst Neil Lindsell raised his target on the stock to $12 from his previous $9. Lindsell said he is encouraged by the company’s expanding order backlog which, at the end of the third quarter was a record $376 million, up an impressive 75% from just last year. The Versant analyst also says that with the PhotoWatt solar division experiment behind it, an improving balance sheet means shareholders might be able to look forward to a large, strategic acquisition.

ATS Automation was founded in 1978 and employs more than 2400 people worldwide. The company has tackled more than 15,000 projects in its history, ranging from programmable conveyors to robotic cells, to adhesive bonding. The failure of ATS’ Photowatt division meant some disastrous recent numbers. The company lost $18-million in 2011, followed that up with a $5-million loss in Q1 and, finally a $67-million skunking in Q2 of 2012, when it bore the brunt of the Photowatt mistake. But things have improved of late; the company’s recently reported Q4, 2012 revenues were $173.5-million, 17% higher than in the same period a year earlier. Earnings were better too; to $16.1-million from 2011’s $11.4-million.

Shares of ATS Automation closed Friday up .4% to $8.14.

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