Selective Asset Management’s Bob McWhirter likes ATS Automation

Bob McWhirter, President of Selective Asset Management was on BNN’s Market Call with host Michael Hainsworth today to talk about Canadian stocks and technology plays.

McWhirter says that while he is best known as a tech guy, he does manage money outside of tech, which gives him the benefit of rotating out of seasonally soft areas. While he acknowledges that technology can be seasonal sector, McWhirter says there is lots going on right now that is very positive in the space.

One of the stocks the Toronto-based fund manager likes in Cambridge, Ontario’s ATS Automation (TSX:ATA). McWhirter says he owns ATS in some of the portfolios he manages because the company is streamlining itself after the failed experiment with solar division Photowatt. Like Celestica, he says, ATS is moving away from low margin service businesses and into higher margin spaces where they can add value, such as the medical and aerospace fields. McWhirter thinks the stock could trade in the $11 range within a year.

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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, to machines that make multi-blade razors for Gillette. The failure of ATS’s Photowatt division meant some disastrous numbers. The company lost $18-million in 2011, followed that up with a $5-million loss in Q1 2012 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 Q1 2013 numbers saw revenues grow 20% to $152.2-million, from $126.9-million in last year’s Q1. Earnings were up 45%, as the company put the Photowatt experiment in its rear view mirror.

At press time, shares of ATS Automation were up 1% to $9.09.

To view the full interview click here.

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