AtkinsRéalis Group Inc. (ATRL.TO)

(Top Pick Nov 2/12, Up 15.09%) Has lagged the market but it has still gone up. The best time to buy it was when there was temporary noise. They continue to gets lots and lots of contracts. Last quarter was the kitchen sink quarter although there is still some bad news to come and investors know this.

Not his favourite name. The issues they have had are not behind them. In the fullness of time when people put a price tag on parts of the business, the infrastructure part of the business is overpriced. Prefers STN-T and better still is Genevar. Decent sized business in US and Europe.

Engineering and construction sectors have been performing well recently. A lot of stocks have broken out on the basis that corporations may be spending a little bit more money. This one is performing in line with the group. There are always political risks with this. Stock has been trading in the $40-$45 range for months and months and looks like it is trying to break out. He would prefer to wait and see.

(A Top Pick Oct 19/12. Up 15.2%.) The company has great depth. There are thousands of engineers there that are not taking money under the table. Feels that they have got the bad apples out of there. New management and he thinks they are going to do okay from here.

Stock was down today. Announcement at 10 pm last night saying write-downs that previous management had locked them into would wipe out profits. This is the kitchen sink quarter and looking forward it will improve. An opportunity to buy now that the bad news is out of the way.

Near-term outlook for the company is clouded because of concerns about lawsuits and wrongdoing. However, PE is 16X for 2014 and earnings are expected to show fairly brisk growth of 30%. Fundamental business is good and the company is extremely good at what they do. If you have a 12 month timeframe, he would classify this as a Hold, otherwise move on to something else.

In the thick of it right now. Pops every time they divest of something. Their earnings stream is somewhat suspect. Declining backlog and it is suspect. Reputational risk – there could be more skeletons. They are going to need cash to fund a lot of the projects they are bidding on.

Sold it early on when news of the scandals broke. It will take time for their new culture to seep through. He would hold off here and watch it. It does not thrill him at this point.

Because of scandal he is not ready to wade into it at this point. The business that they are in requires a bit of this finessing of governments. He thinks they would have been okay if they had hiked the dividend when the news hit.

He is staying away from this for the time being. Has become a little more interesting because of the recent contract in Colombia. Expect that the performance from here would depend more on how investors feel about future potential scandals and to what extent they perceive the balance sheet to be cleaned up.

(Top Pick Jul 27/12, Up 3.16%) Did a pretty good job of cleaning it up. There were a few bad apples. They are good at what they do and have world wide exposure. Will continue to grow because of third world countries. One of his few growth stocks. He feels the stock will continue to grow.

(3 Top Picks have a theme of needing some shareholder activism because there is so much value in some of the stocks they are going to be recognized and will be forced into some changes.) This one already has an activist and he thinks it is now time. Had a horrific quarter but that was just its engineering business. No one is paying attention to its beautiful infrastructure and concession assets. They became even more important after its quarter because of good growth from Highway 407 and Alta Link and they own some other assets as well. This could be spun off. Dividend yield of 2.27%.

He continues to believe that any time you see something in the paper about the company’s issues with bribery, etc., it is really hashing old stuff. Company has new management and has addressed those issues. Looking forward, this is a great worldwide engineering company that continues to get major contracts.

Has recovered from its horrific plummet. He tries to ignore the headline stuff and focus on the asset value. What troubles him is that he hasn’t seen any new contracts in the past month or so. At some point he expects there will be an activist investor come in.

He doesn’t understand why the stock is not lower and why people are willing to pay such a high multiple on a company that is not very clear where you stand on any of the issues. A lot of the businesses they did was very unclear as to what the margin was. It is clear that they bribed people to get the business. He wouldn’t own it.