Stock price when the opinion was issued
Fixed-price contracts were an overhang. Now more into engineering services. His favourite thing is expansion on the nuclear side, and they're involved internationally. This will sustain growth going forward. Low valuation. Balance sheet's better, as is earnings generation. Yield is 0.1%.
(Analysts’ price target is $80.85)Big fan of the space, especially with the incoming US administration. Changed its business model, now focused on higher quality and the nuclear resurgence. Nuclear represents about 20% of their business and those margins are very high. Can unlock value by monetizing Hwy 407. Attractive valuation compared to peers.
The former SNC Lavalin which had a checkered history. He likes professional services companies, because there will always be a demand for them. The problem is that occasionally a CEO will take a fixed-price contract that could make a nice margin or lose 5-years' profits. ATRL has been through that. He likes where ATRL is heading. The market isn't afraid of its near-30x PE. Strong growth with 9% margins, which lag its peers like Stantec, but there's little margin of safety here.
They have a great opportunity on the nuclear energy side. Nuclear energy is needed as a stable energy source to power data base centres. As the nuclear component develops they are making decent money in the interim with its engineering services business. Has an internal free cash flow of 7.4%, much greater than the average and almost 7 times greater than the present TSX stock market. Also has an attractive PEG ratio. There was a 10% earnings surprise.
Buy 12 Hold 1 Sell 1
Rebranded. Becoming a very large, global player in engineering and project management. Asset light. Not in construction anymore. Reasonable margins. Huge backlog. About $10B in revenue a year. Big infrastructure spending has to happen globally. Interest rates coming down is a good thing. Expertise in nuclear. Yield is 0.12%.
(Analysts’ price target is $91.23)