Badger Daylighting (BDGI.TO)

In the business of hydro-vac. They use high-pressure water to move Earth. Their customer base is both in the energy patch and in the construction and utility business. In that business, you have to be careful that you don’t cut cables, sewer lines, etc. You can dig part way, but then you use high-pressure water to move the earth safely out of the way. They have been growing aggressively in the US. Have also been moving away from the energy sector. Dividend yield of 1.48%.

(Top Pick Nov 19/14, Down 20.97%) He sold it shortly afterwards. It broke down from a technical level. They had strong earnings recently and he is taking a hard look at it again.

Historically, the sector does very well right from around the end of January right through until May each year. This company is a little different because it is focusing on a certain type of oil services, but it should follow a similar pattern. It is now approaching its period of seasonal strength. Technically a nice little base has formed and has been breaking out in the last few days. Technicals are starting to look better. It is trading above its 20 day moving average and it is outperforming the TSE composite. Seasonality is not there yet, but is expected to be clicking in sometime around the 3^rd week in January. Try to buy this on weakness between now and the 3^rd week in January.

Has taken a beating, and thinks it is now base building. They have hydraulic trucks that can move around, and they moved a lot of the trucks into the US, and redeployed them. They were in the energy patch in Canada, and business is slow there. It looks very promising here. They own a lot of their own stock and work very hard. They produce their own trucks in Canada so have a lower cost base.

He shot down a bid to acquire it several years ago. The company is a very well run company, but had no idea what they were worth. They have continued to do well. Half of its business is serving the oil patch. They have expanded in the US and are the go-to name in the business. They are moving their trucks away from the energy patch to municipal work, but there is only so much they can do. He is keeping it because it is a well run company. More than half is now not with commodities so he is happy with it.

They are good operators. He is looking to add stock back down at these prices. It is being thrown in with all of the energy names, but this one is different because it has to do more with infrastructure.

Starting to look like very deep value. A business with growth and yield. Doesn’t think there will be any dividend increases for any of these businesses, given the current commodity environment. They are moving trucks around and starting to get them out of the commodity sensitive areas, and moving them more towards construction areas and into the US. This is a way to get exposure in the US homebuilding and construction market. Doesn’t think we are going to see this appreciate anytime soon unless there is a little bit of turn up in the energy side.

Really likes management. There are 2 industries they service, oil/gas and municipalities. Because of the oil and gas uncertainty, she is staying out of this until she sees a bottom in energy. It would be one of the names that she would be very happy to buy back.

This is a great company. The biggest fleet of hydro-vac trucks in North America, mostly in Canada initially. Have been growing tremendously in the US over the last few years. Got whacked because they had exposure to the oil/gas industry in Western Canada. Very high margin free cash flow business. They are really targeting the utility and municipal segment, and their reliance on the oil/gas segment has come way down. Dividend yield of 1.89%.

This is in the business of hydro-vac, moving of earth, and their customers are both in energy and utility fields. A lot of the business is in the oil patch, which is hurting them. Earnings in the latest quarter were down. They are expanding big in the US. Doesn’t see them increasing the dividends as long as energy is under pressure. A very good company to own for the long run.

Had a very good run from 2011 to 2014. Then it ran out of steam a little bit, Now it has come back towards support, feels around $20 there should be some support. Now he feels that there is a chance for another up-leg on Badger. Would like to see a break from the downtrend . Feels that the up-leg could be quite long and positive.

Had not been bullish on this company because it was expensive and possible competition coming in. Since then, the stock has been cut by half and he has been getting more interested in it. They are hydro-vac people with a lot of exposure to the US. What is holding the company back is clearly their energy exposure and he still needs to figure out how much downside there is. This is getting more interesting.

Good infrastructure stock. Very useful around buried utility lines. There are very good growth aspects, especially in the US. Growth multiple has been taken out of the stock. Stick with it. It will take time to play out. They have a decent dividend for a growth stock. It is not widely held so more volatile. It’s a liquidity issue.

(A Top Pick May 25/15. Down 13.81%.) Had picked this because at that time the energy stocks and cyclicals had been improving. This still has good valuation characteristics and scores in the top 15% with good ROE. A very solid balance sheet. From a valuation perspective, he still has a partial holding. This will be a beneficiary of an eventual cyclical recovery, ahead of some of the higher levered oil stocks. If he didn’t own it, he would buy a small position.

He recently started buying it again. He had looked for two things. The expansion in the US – would it sacrifice margins, and since half the business is energy related he wanted to show they handled that. They moved trucks to the non-energy area and margins were okay for the last two quarters. So he has no problem owning it and buying again.