Badger Daylighting (BDGI.TO)

He always liked it and sold it way too soon. It is a well run company. The problem is there is no way to patent their process so others have picked up the technology. There is a lot more competition and it took the wind out of their sails. That is going to put a cap on them. The yield is not exciting and he doesn’t see them going anywhere.

This went from being a dividend play, to being a value play, to being a growth stock, to being a momentum stock. Once the wind was taken out of the momentum stock, he started to become more interested again. It has come down a lot because about half of its revenue and earnings comes from the energy area. They have been successful in 2 things. 1) Moving their trucks away from energy towards utility and other areas and 2) growing their presence in the US. Earnings from the US are starting to come through. Dividend yield of 1.24%.

It was a growth darling a year ago and then missed a quarter, then the energy decline impacted it. This one fits his trend of wanting to move back into cyclical names. It has good valuation. High ROEs and a 10 year track record of growth. They are the market leader and that is a good barrier to competition.

A good company and have done extremely well over the years, however their technology is not patentable. They use water pressure to drill, and it is absolutely fabulous if you are putting in fibre optics, or some tricky areas with gas pipes, etc. The trouble is, everybody else can build the same kind of machines and have been doing that. Have more competition now than they had before. This is going to put a bit of a lid on how fast the company can grow.

A lot of city construction is using this company instead of using backhoes. It consists of a high-pressure water system and a gigantic industrial vacuum mounted on a truck. It is starting to become more competitive. This company offers the advantage of being extremely disciplined in the expansion of their fleet. Earnings growth is expected to be unchanged for 2016. They have a 19 PE. ROE is roughly 23%. On a one-year basis, you will probably be happy with the results.

It is the dominant force in its particular water technique pipe laying. Sold his holdings.

He has looked at it, but never owned it. It has exposure to Western Canada. It is not cheap enough to be on his radar screen. He does not see the barrier to competition.

(Market Call Minute.) He is building a pretty good-sized position in the stock. He likes this for a whole bunch of reasons.

Chart shows higher lows in January and March, so it is building a base. However, there is going to be a lot of resistance at the current level. This is an investment that he isn’t quite sure about, but the risk/reward is really in your favour. The sector is ranked very poorly on a long-term basis. The shorter trade numbers are really good. Chart shows a downward channel from early 2014, and he would like to see it break out above that. If you own, he would be inclined to take half of your profit and let the rest run.

Has been cautious on this name. Had thought their Q4 numbers would be a little bit disappointing, but the market reacted very positively. Management continues to give positive guidance for the year, which he felt surprised a lot of people. They have direct exposure to oil and gas, which is part of the reason it sold off. What they are trying to do during the lull in oil and gas, is to try to grow their US business. If they can grow the US business faster than they see declines in Canada, they could still get that growth.

Doesn’t know of any rumors of a takeover. They have a high valuation because they are extremely good at their business. If sentiment turns and the valuation turns then consider it because it is a great company.

Has been beat up just like all of the energy services companies. In their case, she thinks it is unwarranted how much the stock has traded off, because half of their business is in the utility space. The other half is in the petroleum space. This presents a good entry point. Reported an excellent 4th quarter. EBITDA was up over 30% year-over-year. She thinks EBITDA growth this year will be significantly smaller than it has been for the previous years. The multiple has come down quite aggressively. It is now trading at 8X forward EBITDA.

They have moved into the states and are branched out away from oil and gas. Latest earnings have done quite well. If they got listed on the US exchange it would give a higher profile to the company, however would not attract institutional investors as it would only be .75 billion capitalization. A good core long term holding and it may be time to get back into it. Watch for it to get to a technical break out.

A little bit of both energy and infrastructure, so we don’t know what kind of earnings they are going to have next year. This is one of the stocks that she loves because of the management. They have done an incredible job of growing the company in terms of geography. Management is saying that the US business is still very good. Their business in Alberta is very poor, so she would expect those numbers to flow through, especially in the 1^st quarter. Wait until Q1 is announced and then Buy. Expects subsequent quarters will see an improvement.

Wishy-washy on the business model. They make the trucks that help with the environment. Have some exposure to oil/gas, which is weighing down a lot of different companies. Dividend yield is attractive. He can’t say anything really positive or negative about the name. They were 1^st in the market with the trucks, but that doesn’t mean somebody else can’t come in and compete with them heavily. Yield of 1.3%.