Time to Jump on This 1 Top TSX Stock Down to 52-Week Lows

This TSX stock may be down at 52-week lows, but I wouldn’t hold out and think that it’s going to remain this way for much longer.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investing in stocks that are trading at their 52-week lows can present both opportunities and risks. Historically, about 15-20% of stocks that hit their 52-week lows on the TSX experience a significant rebound. In fact, returns average around 10-15% within the following six months, particularly if the stock’s decline was due to temporary factors or market overreactions.

However, it’s important to note that not all stocks recover. Some may continue to decline, especially if the underlying issues are fundamental rather than market-driven. This makes thorough research and analysis critical when considering investments in stocks at their 52-week lows. And we have one to consider right away!

Created with Highcharts 11.4.3ATS Corp. PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

ATS

Canadian investors, now might be the perfect time to take a closer look at ATS (TSX:ATS) as it trades near its 52-week lows. While some might see the recent dip as a cause for concern, savvy investors could view this as an opportunity to pick up a strong industrial automation company at a discount. Let’s dive into why ATS stock is worth considering, especially when it’s trading at such an attractive price point.

ATS has seen a significant decline in its stock price certainly, down 34.42% over the past year. This has brought it close to its 52-week low of $36.27. For a company with a market cap of $3.57 billion and a trailing price-to-earnings ratio of 20.09, this kind of dip might just be the buying opportunity that long-term investors are looking for.

Plus, with a forward P/E of 17.15, the stock appears to be reasonably priced for its future earnings potential, especially in an industry that’s poised for growth as automation and smart manufacturing continue to gain traction globally.

Earnings

The company’s recent earnings report does show some challenges, with quarterly revenue declining by 7.9% year over year and a notable 25.8% drop in quarterly earnings growth. However, despite these setbacks, ATS managed to generate $2.97 billion in revenue over the past year. Plus, it maintains a profit margin of 6.10%. These numbers suggest that ATS is still a solid performer with the potential to rebound as market conditions improve and as demand for automation solutions grows.

In fact, ATS’s balance sheet is another reason to consider this stock. The company holds $185.09 million in cash. This provides a cushion during turbulent times. And its current ratio of 1.79 indicates that ATS can comfortably meet its short-term obligations. While the debt-to-equity ratio of 84.69% may seem high, it’s important to remember that companies in the industrial sector often carry more debt to fund expansion and innovation. The fact that ATS has managed to maintain a return on equity of 11.30% suggests that the company is using its resources effectively to generate value for shareholders.

Returns over dividends

One thing to keep in mind is that ATS does not currently pay a dividend. So, this stock may not appeal to income-focused investors. However, for those looking for growth and value, ATS’s price-to-book (P/B) ratio of 2.12 and enterprise value/earnings before interest, taxes, depreciation, and amortization (EBITDA) ratio of 10.70 suggest that the stock is reasonably valued, especially compared to its peers. The fact that 95.38% of the shares are held by institutions further reinforces the notion that ATS is seen as a strong player in the industrial automation space!

So, while ATS is facing some short-term headwinds, its current valuation and position in the growing automation industry make it an appealing option, especially for Canadian investors looking to capitalize on a potential rebound. With its stock trading near 52-week lows, now could be an excellent time to consider adding ATS to your portfolio, especially if you believe in the long-term growth prospects of automation and smart manufacturing.

Should you invest $1,000 in Ats Corp. right now?

Before you buy stock in Ats Corp., consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Ats Corp. wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends ATS Corp. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Stocks for Beginners

Canada day banner background design of flag
Tech Stocks

The Top Canadian Stock to Buy With $5,000 in 2025

There are few Canadian stocks out there that offer the outlook of this tech stock, bound for more growth.

Read more »

Cannabis business and marijuana industry concept as the shadow of a dollar sign on a group of leaves
Stocks for Beginners

Buy the Dip Before It’s Too Late: This Canadian Stock Won’t Stay Cheap Forever

Investors might think that cannabis stocks are out, but this one could be the top Canadian stock to consider.

Read more »

a person watches a downward arrow crash through the floor
Dividend Stocks

Is This Correction Your Chance? Top 4 Canadian Dividend Stocks on Sale

Stocks may be down, but now is your chance to get some of these top dividend stocks on sale.

Read more »

worry concern
Stocks for Beginners

Got $2,000? Buy These 2 Canadian Stocks as Trump Tariffs Rock the Market

There are two Canadian stocks that have continued to do well even amidst this turmoil, so let's take a look.

Read more »

dividends grow over time
Stocks for Beginners

The Top Canadian Stocks to Buy Right Away With $4,000

If you only have $4,000 to invest, then these Canadian stocks are some of the best options out there.

Read more »

A shopper makes purchases from an online store.
Tech Stocks

Buy the Dip on the Return of Recession Stocks?

If a recession comes back, there are some stocks that could fair well afterwards. And this is one of the…

Read more »

Man holds Canadian dollars in differing amounts
Stocks for Beginners

Cash Is King? Think Again During Today’s Market Dip

Sure, cash is great, but during a market dip investors may want to consider using some of the cash to…

Read more »

grow money, wealth build
Stocks for Beginners

How I’d Build a $15,000 Portfolio for Income and Growth With Canadian Value Stocks

Looking for some Canadian value stocks to buy without breaking the bank? Here's a trio to consider buying this month.

Read more »