Badger Infrastructure (BDGI.TO)

(A Top Pick Dec 11/17, Up 15%) It is an infrastructure play with over 70% of their business in the US. There are many areas of the US where they don't know what hydrovac excavation is. It is much less of an energy services company than they were in the past.

(A Top Pick September 27, 2017. Up 10%). This is a stock that people love to hate, because an influential short-seller talks about it repeatedly. That has put a lid on the stock, but the company itself keeps coming through. The company had a bad quarter in the first quarter of last year, but has been doing well since then. Management has been doing a good job and he is happy to stay on the stock.

It has never been cheaper. 70% of their sales come out of the US. It has never been cheaper. The shorts will have to run for cover. (Analysts’ target: $35.00).

They had a run-in with a short-seller who he thinks is odious. He is a fan of Badger and thinks it is proving the short-seller wrong. There were some possibly valid issues about their free cash flow and about how their accounting presents their results. However, the company appears to be doing well, they raised their dividend, he thinks they bought back some stock, the insiders bought stock when the accusations cratered the stock price. The oil patch is improving; he thinks this company will do well.

A hydro-vac company for excavation. It trades at 14.2 times earnings and there was very good earnings recently. Their dividend was increased by 18% recently. They have diversified into infrastructure and away from oil and gas. Yield 1.9%. (Analysts’ price target is $32.38 )

This is a great company that has been targeted by short sellers. He think they got their attacks completely wrong. Badger’s business is easy to understand and has refuted their comments.

(A Top Pick March 23/17 - Down 27%). A controversial stock in the last years. A company the is in the hydro vac – high pressure water to move earth rather than digging. Largest in North America. Last year it had a bad quarter and the shorts were clobbered the stock. In the meantime, the company has done better. Sales are up. Margins have come in. Still own it.

He has owned it for a while, buying it when it was an income trust. Operationally the company has done well. In the hydro-vac business and has expanded operations more into the US and into the utilities space. Municipalities use these services to avoid digging around existing infrastructure.

This has become a little more commoditized than it was when they first started, so he decided to stand back and watch to see how things go down. There have been rumblings about accounting, and when that happens, he prefers to step back and watch, and make sure they have a couple of quarters that work.

It had an attack from the shorts but they failed to convince the market. 2/3ds of their business is in the US where they are just discovering hydrovacing. They generate great free cash flow and are very well managed. Buy it and sock it away. (Analysts’ target: $37.00).