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Gold/Mining/Energy : Magellan Aerospace Corp (MAL) New Listing -- Ignore unavailable to you. Want to Upgrade?

To: Anthony Wong who wrote (465)	1/10/1999 7:40:00 AM
From: Anthony Wong	Respond to of 633

Small caps will eventually pay off Flight from volatility Tuesday, December 29, 1998 Tony Johnson Calgary Herald Volatility in the markets is sending investors clamouring for the largest capitalized stocks in North America. This is particularly the case in the United States where the Dow Jones industrial average went on a roller-coaster ride over the past three months, falling more than 2000 points in late summer to the low 7000s and then rocketing back. The big stocks were the life of the party, but investors all but closed the door to their smaller and mid-sized counterparts. Hence, valuations of the Dow Jones 30 stocks are historically high and the Russell 2000, which represents smaller issues, still remains off its record highs. Contrarians buying on this weakness will eventually be well rewarded with big gains when momentum comes back to the small caps and mid caps. - ATS Automation Tooling Systems Inc. This leading technology company has two complementary businesses: one that builds robotic assembly lines and the other that manufactures precision parts for industry. ATS has an impressive list of international customers in a variety of industries. Over the past six months, it grew revenue in all geographic regions, but fastest in the Pacific Rim despite the economic turmoil there. In the long term, there is potential for an earnings boost from Photowatt, a French solar cells and modules operation, from the car heating battery, and from EcoSnow, a precision cleaning technology. Earnings per share for the year ending March 31,1999, are forecast at 72¢ . At 22.9 times current fiscal year estimates and at 17 times fiscal March 31, 2000, estimates, ATS shares look attractive. The stock (ATA/TSE) closed recently at $19.25. - Magellan Aerospace Corp. Magellan Aerospace is Canada's largest publicly traded aircraft parts manufacturer. Its 12 operating facilities are engaged in the manufacture and precision machining of components and structures for the aerospace industry, the provision of aircraft repair and overhaul services. Magellan's production rates, new aircraft introductions, and aircraft utilization are all increasing. It is looking to gain market share, expand its customer base, and increase the scope of its manufacturing and maintenance capabilities and expertise. After nearly doubling its revenue in each of the past two years, Magellan's revenue and earnings are forecast to compound annually by 34% and 44% respectively over the next three years. The company represents one of the primary consolidators in the aircraft parts sector. Magellan (MAL/TSE) closed recently at $8.15. - Stackpole Ltd. Stackpole is an integrated manufacturer of drivetrain components and assemblies, primarily for automotive engines and transmissions. The business is based on technological advances in the powder metal area, which enable it to provide a lower cost alternative to many conventional machined steel components. This advantage, and the company's engineering capabilities, has attracted increasing recognition from major automotive customers. The company has enjoyed strong growth until its most recent quarter. It reported a loss of 23¢ a share for the third quarter of 1998 compared to earnings of 25¢ a share a year ago. The loss resulted from the General Motors strike followed by the stress of trying to exceed normal production capacity to keep up with General Motors' efforts to rebuild inventories. Directly and indirectly, GM represents about 60% of Stackpole's sales. New business in 1999 is expected to contribute to 20% revenue growth next year. Stackpole (SKD/TSE) closed recently at $13.10. Tony Johnson is a financial consultant with Wood Gundy Private Client Investments. nationalpost.com