Aecon Group Inc (ARE.TO)

It's been correcting a bit. Margin difficulties in 2009. There may be more weakness before it bottoms out. We need to see more growth on the construction side.

They are a bit lumpy. They occasionally miss on a contract. Stock took a hit because of a write off recently. 2.78% dividend. Recurring revenues are growing. You might get a multiple increase from it.

Has done very well recently and feels that management has really turned the company around. Went through a number of years with significant problems but seems to be doing extremely well and winning a lot of business lately. Price is pretty much reflecting good times ahead.

Likes the whole sector, especially this one. Didn’t announce any contracts last quarter and backlog has been reduced a little bit. Great quarter and strong balance sheet.

Likes infrastructure stocks. His preference would be SNC Lavalin (SNC-T). This one is starting to act better. It’s in the right area and is doing the right things and he likes the management.

Good management. Has been terrific in top line growth but could never come out with sustainable bottom-line earnings in the past. Just picked up a contract for an automotive race track they will be building. Still work in progress. In the penalty box. If they can put together a few sustainable quarters of good earnings where margins are picking up, they will do quite well.

Have a pretty good-looking backlog, which is what these companies trade on.

Excellent infrastructure company. Has a very, very big backlog of business. Looks very safe. There is a long run for project in Quito Ecuador (?) which he feels is probably arriving at a crucial important positive stage. Solid company.

Came out with a gang buster quarter. Earnings going forward will have some growth. Great entry level right here. They won’t be affected by any kind of resource slowdown. 2.5% yield. Public/Private Participation projects are an up and coming way to do these things. He has a stop in and keeps raising it.

Governments are generally pulling back a little on their stimulus. You should be thinking about it being in a trading range. Governments have to pull back now.

Within engineering and construction firms this one is a recovering company after running into problems a year or so ago. They have a significant backlog and in the last quarter they were showing improved margins. New contract awards are growing. Looks attractive in the group after lagging others in the group. He is taking a look at it.

(A past Pick Aug 10/11. Up 12%.) 7% Convertible Bond due 2014. Pristine balance sheet. Very low leverage. Almost risk free.

With construction/engineering companies there is always a risk that they won't be able to do a contract on a profitable basis and have to take a loss. This happened to this company in 2010-2011, which is why the stock price went down. They are growing quickly and have a lot of work and seems to have turned around its operations. You have to be comfortable with the risk.