Aecon Group Inc (ARE.TO)

Will Ottawa fulfill promises of infrastructure spending? These stocks should be traded (not held). Remember these stocks are international, with building activities outside Canada. This sector will go, along with a lift in the market that he predicts.

They came back to the $15 after the sale was disapproved. There are the usual construction issues, such as the risks of overruns on fixed-price contracts on large projects. They have a stronger backlog. She doesn’t see a rush to buy the company. They are looking for a new CEO and not actively looking for a new buyer, so the share price will be driven by how well it performs in the future. (Analysts’ price target is $18.80)

He owns two engineering companies – SNC Lavalin (SNC-T) and Stantec (STN-T). He keeps waiting for the actual infrastructure spending incentives from the Federal government to ignite these holdings. Aecon’s senior management does not impress him. He would prefer to hold the other alternatives.

He is thankful this continues to be a Canadian company as there are fewer in the Canadian space left to invest in. He is watching it again, now that it is down 22% this year. He sees it as still being a little expensive at 19 times earnings. He would take an initial 1/3 position at these levels. Yield 3.25%.

It's been in a tight range for a very long time. It's now downward in a middle ground. Continue to hold it, but he'd like to see it rise above $18.

They had a price collapse. There is a vacuum. The backlog is the biggest its ever been at 4.6 billion. Visibility is improving. Growth is kicking in. Trading at a reasonable 12.2 times 2019 earnings. Benefiting from the nuclear refurbishment contracts. (Analysts’ price target is $18.80)

He doesn’t normally like to buy companies when it is like catching a falling knife, but when it fell 25% it was too good to pass by. Unlike other construction companies its multiples did not jump when PM Trudeau announced infrastructure spending, so the stock looks very cheap presently. They have a record high order backlog. Yield 3.3%.

The company is getting back down to where it is getting interesting again. Let the chips fall after the failed takeover. You need to wait for a while and make sure everything has shaken out.

A Chinese company failed to acquire this company. Now you have a lot of uncertainty left in this stock. He would prefer others in this space regardless. You will have a shift in the type of investor that will hold this.

Is the fact that it is being bought by a Chinese firm holding the stock? Sell on mystery buy on history. It looks like it is waiting for something. It looks toppy here. He would take a win here.

(A Top Pick Jan 18/17. Up 31%) This has a takeover offer on the table. At the time, it was compelling on a valuation basis relative to its peers. The infrastructure assets look very good, but had also thought he saw a turnaround coming in mining and energy.

A Chinese company is offering to acquire this at $20.37. There is still uncertainty. If you own, he would consider selling some of your holdings.

(A Top Pick Sept 28/16. Up 13%.) About to be taken over by a Chinese buyer, but he tends to think the government will step in and block the sale. He likes the whole space. He would come back to this in a heartbeat if the deal fell through.

It is trading at a bit of discount to the price being offered by the Chinese. There is some doubt that maybe they will not be allowed to be sold to the Chinese. He does not own it and has another pick in the group. You have probably made money on it and could sell half to lock in profits in case it does not happen. It is 80-90% and not 100%.

They are very well positioned to take advantage of more public infrastructure spending. They were looking at selling the company a while ago, but if it were to be sold, it would be closer to $20 than where it’s trading today.