Aecon Group Inc (ARE.TO)

He hasn’t looked at the seasonality on this, but he is guessing that it is going to be very good in the spring time, because that is when they are filling potholes, construction, etc. Chart shows a nice uptrend, but historically this tends to end right around the end of April. If you own, you will probably want to take some profits, probably within the next month.

It is not a stock he would want to own right now, but in good times they get exposure to the construction and energy sectors. Construction is looking a little flat and is not that attractive to him.

We have a base pattern starting to develop in the chart. He likes it from that perspective. It is a test of a long term support line after a long term decline. If it broke out on the upside he would look for it to get to the $16 range. He would nibble here. The government says there is an announcement of major infrastructure projects coming soon.

We are above where we were at the interest rate scare of 2011. It has bounced off support. It has underperformed the industrials index so any money in it is dead money.

Two or three bad quarters in a row. They have to compete for bids, and so have to bid finely and can’t always build the project for what they bid. It is a tricky sector to play. None of these companies have done very well.

The fair market value is huge, relative to the current price. The only issue is if investors in Canada will have sufficient confidence in the Canadian economy to get this stock going again.

It has a model of $18.12 without the December balance sheet, or a 58% upside. It is cheap enough. If it started racking up negative transits he would sell (going through his EBV lines).

This is not a big dividend grower and doesn’t have a substantial yield, so he does not own this one. This is a cyclical business and it is going to be challenged by the whole oil patch, because they are in construction.

One of the largest Canadian construction companies. Has been hit as a large proportion of their earnings come from energy related areas. However, they are also very big in infrastructure. Trading close to BV. Management over the last couple of years has achieved a significant turnaround in the operating efficiency of the company. A sale of their exposure to the Quito Peru airport, is also a positive to their balance sheet. Yield of 3.05%.

Got hit badly on account of its whole Western Canada theme where everything was thrown into the dustbin that had the name energy written on it. This is one of the babies that fell into the bath water. A lot of analysts have been revising their target downwards, but there are a bunch of catalysts in this company. One is a 45% ownership of an airport concession as well as its construction business and its backlog. Yield of 3.14%.

This is his derivative play on the energy sector. It has an energy exposure and has fallen over the past few months because of that. Energy exposure is about 45% as of their last report, but the stock has fallen 50% from its highs. In Canada there are 2 seasons, winter and construction. Construction companies such as this tend to do well all the way through to the spring and even into the end of summer. The average gain between now and about April is about 9%.

Originally bought this at around $13, but as it began to drop he started to buy aggressively. Historically when it is trading at or below BV, it is a good time to buy. Primarily an engineering and construction firm. Oil and oil sands exposure is only 25%, of which 60% is related to maintenance work. Very cheap. A catalyst is the sale of their Quito Ecuador airport concession. Yield of 3.28%.

The problem is that the acquisition of 2 or 3 years ago added dramatically to the energy exposure. If you start to get any contract cancellations this will hurt them. This fear is pushing the stock down.

Typically does the best in the spring. The trend is down. It is close to the 20 day moving average. You want more technical evidence that is outperforming. You might want to get in in the next 2 to 3 weeks, but you want more evidence.

This and Stuart Olson (SOX-T) have a lot of exposure to Western Canada and oil sands. In this environment he feels there are going to be more cutbacks in CapX in 2015, so you have to be very leery about these names. Feels they are candidates to be shorted.