Aecon Group Inc (ARE.TO)

Over 12 months, Aecon could do better. It's more exposed to Canada, more revenues from Canada, whereas Atkins sees more global revenues. But 20% of Atkins' revenues come from nuclear which is booming. Atkins trades at a discount to peers. Aecon's backlog will expand a lot from Build Canada.

Owns a smaller position, as it tends to be high-torque. Smaller cap and cyclical, so we've seen volatility in the name. Company says it won't take on any more large, fixed-price contracts. Record backlog, much of it public sector (more stable than private). Fingers in almost every nuclear project in Canada. Likes its domestic exposure, where she can understand Canadian government and policies.

Yield of almost 4%, which wasn't cut even when things looked really bad during 2022.

It is starting to roll off the legacy projects which have fixed cost price contracts which lead to losing money. They are still having an impact but the company is getting into variable cost contracts so they can make money even with cost increases. There is a big backlog and good potential. He noted that construction backlogs don't always translate into profits.

If you own it, not the end of the world. Trades at pretty steep discount (16x PE) to peers (closer to 22x), as it's less profitable and less growthy. Interesting segment called "Concessions", where they take partnership stakes in infrastructure investments. Yields ~4%, and grows dividend about 6% a year.

Better choice is WSP.

Likes the engineering services sector. She owns WSP and would recommend buying that name. But you can hold this one if you have it.

Since late 2024, this has fallen, based and is breaking out. Ottawa will invest in infrastructure.

Started dipping in this week. Got almost cut in half from levels late last year. His fundamental analyst likes the potential opportunities. Will probably go up and down quite a bit. As long as it doesn't crack the low point where he was just buying it, then he'll stay in the trade. 

May not make it back to $30, but has some upside. A "spendy" government got in, which means infrastructure, and that's good for this name. Yield is 4.17%.

ARE seems to have a never-ending stream of issues that hurts its ability to attract investors. Legacy issues are causing losses. It has noted that 2026 will be better. But....it is quite a small company, momentum is weak, and it is still at 21X earnings. We do not think it is the type of stock to own in the current market environment and we would be comfortable sitting on the sidelines here for a while. 
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Stock's come off almost 40% YTD, a real opportunity to get in. Half of its construction projects are linked to utilities. Does a lot of nuclear construction, refurbishment, and ongoing maintenance. So the projects aren't as discretionary. Stock got ahead of itself, but then concerns about economy set in. Yield is 4.48%.

Government announcements abound with infrastructure and nuclear spending. Whether we're in a recession or not, doesn't expect governments to stop spending on transit projects and the like. Lots of opportunity for public and private spending.

When it comes to Canadian infrastructure investment, there are some good companies out there and already trading at attractive multiples. And that's before accounting for any additional investments post-election in Canada. 

This name will most likely benefit.

EPS of 25c missed estimates of 40c; revenue of $1.26B beat estimates of $1.19B. EBITDA of $76.3M missed estimates by 8%. Revenue rose 12%. EPS doubled year over year. ARE said revenue 'will be stronger in 2025'. The stock did get a downgrade on the miss. Considering the already-low valuation, the 16% decline seems overdone, but it is that type of a 'shoot first' market. It is hardly alone in a big decline this week. Backlog is $6.7B, up $500M from the prior year. It is a small cap company with economic risk in a very bad market. It also screwed up last year with a loss on the Skyport sale. Investors are getting tired of the 'bombs' going off on a regular basis. We think in this environment buyers do not need to be in a rush to accumulate. That being said, it was a takeover target once before and this is always a possibility if the shares stay weak. 
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Recent dip probably not company-specific, whole industrial complex has been hit by tariff scares. A competitor is BDT, with a better financial profile and really good growth profile, so he's more comfortable owning that one.

Good move recently. Benefiting from capital infrastructure spends in Ontario, and this will continue to increase. Nothing wrong with the name, but there are cheaper plays like ATRL and NOA. See his Top Picks.

It's gotten past a lot of its old, fixed-price contracts that really hurt the company for a number of years. ROE is ~9%, at a much lower price-to-book ratio than others. Getting a lot of contracts lately. Prefers this in the space, despite its small $2B market cap.

Has more room to run. It trades at a discount to peers. Its backlog has never grown better. They have a nuclear side to their business at Bruce Power. A lot going on and he likes it.