SNC-Lavalin Group Inc. (ATRL.TO)

He likes the valuation. The pull back was way over done a few weeks ago. It represents a decent opportunity at this level but some risk. There are risks with the current Saudi Arabia situation. Fundamentals are good for this company. He has a $70.00 target. Yield of 2.2%. (Analysts’ price target is $70.54)

He picked this because it is down about 10% based on the Saudi Arabia situation with Canada. Revenues in Saudia are 11% or $900 million on long term oil projects. They employ 5,000 Saudis in their projects. The company says there is no disturbance. He thought it was cheap at $57. They have a $15 million backlog. Yield 2.2%. (Analysts’ price target is $70.54)

The dispute between Canada and Saudi Arabia is a concern because SNC has bought companies that do business in Saudi Arabia. However, so far no contracts have been invalidated and there is no negative information about the company’s projects. Uncertainty is hurting the stock price, but their core operations are doing very well. In addition, they are looking to monetize their stake in Highway 407 and this is highlighting the value of that investment whether they make the sale or not. He thinks this is a sound company that he is happy to own. He sees the Saudi Arabia news as noise that should not cause a fundamental investor to take action. He thinks the impact of the dispute will fall more on private individuals than on businesses.

He owns WSP instead. The infrastcuture sector is okay, nothing wrong. Buy on weakness any of these stocks. Commodities will come back and infrastructure will rise along with them.

He hasn't looked at this sector in a long time. This stock has gone nowhere. He's waiting for management to shake things up.

He likes it and it has moved a little lately. They've settled a few lawsuits and are putting their problems behind. Highway 407 has been a fantastic asset for them. SNC has touched $60 for the first time in a while and he sees 10-15% upside in the next 12 months. Be patient. Over the next few weeks you could buy this for a dollar or two lower.

The stock has done nothing since 2010. It is finally coming back to where it was in 2010. He doesn’t see much opportunity for dividend growth or capital appreciation with this stock. His model price is $44 (the stock is $59 today). (Analysts’ price target is $69)

Technically the stock looks reasonable. However, at 22 times earnings it is not cheap. There had been 70,000 layoffs through the company, he says. It is a mining and infrastructure play. It is not his favorite space to invest.

A very cheap stock vs. Canadian and US peers. A Canadian company that generates revenue outside Canada--he likes that. It recently broke out and he thinks will continue to make new highs, easily to $70. Their oil and gas business is a tailwind. (Analysts' price target: $69.96)

The infrastructure space has been a little disappointing, but SNC has made a good move. Now, SNC is hitting technical levels (limits) now. A good hold for the long term as global infrastructure spending increases.

The company has come through the investigations into bribery and there is increasing spending on infrastructure global. This is a global company that will benefit from that trend over the long term. He doesn’t own the stock but he can see a case for buying it.

They own it, bought it after the corruption scandal came up. They have new management and made some good acquisitions. But the stock still hasn’t been moving too much. Not a lot of money has come out of the governments for infrastructure spending. Thinks long term SNC is a fabulous name to own.

(Past Top Pick on May 15, 2017 Up 9%) Their return for the next 12 months will be higher than 9%. They just settled with provincial governments over the 2012 bribery scandals, though still have to settle federally. Excluding their highway 407 operation, their mulitple is less than 10X earnings. This should trade in the mid-$60s ($55 today).

Infrastructure has been slow lately. Meanwhile, we've been in a strong stock market. Wait until this breaks out above $58 before buying. Right now, this is stuck in neutral. If you have a long-term view of say 10 years, you'll do well.
Otherwise, wait for that breakout.

Good backlog. Exposure on the oil and gas looks good. (Analysts’ price target is $69.73)