Badger Daylighting (BDGI.TO)

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%.

There is probably not a moat around this business, so there would be opportunity for competition. Technically, the chart shows a long advance running from early 2013, to a top in 2014. There has been a complicated ABC formation, and he thinks the correction has been completed. What you want to look for when this rallies is for it to clear the pivot point of around $33. If it can’t, he would be a Seller, but if it clears it, then you are safe at least until the old high of the low $40s.

Sold his holdings way back, way too soon. It always seemed expensive, but then took quite a hit. Have a drilling, tunnelling system that uses high-pressure water, and they can suck up all the bits and pieces. This allows them to go through very complicated areas in urban environments where there are cables and pipes, etc. without destroying everything. The problem is, their technology is not patentable. Anybody can get a big truck with a suction thing and copy what they are doing. Have had a lot of competition. This is a company that does well when municipalities have lots of money. He is watching this. The multiple is 19, about half of what it was. If the US takes off, they have a lot of activity down there.

This is something he is watching. Very well-run business. Traditionally has high returns on invested capital, but exposure to the oil/gas business right now is a concern and is a “wait and see” for the next 6-12 months.

Had held this for several years. Chart shows a pretty classic technical analysis downtrend. Has been banging against the downtrend 3-4 times. It is going to need to break out to new short-term highs, before it comes back towards its peak again. You don’t have to be in a big rush to get in this, as he thinks it will take a year or more to consolidate the huge gains that it had, for its earnings to catch up with the expectations that were built into the stock.

Hudbay Minerals (HBM-T) or Badger Daylighting (BAD-T)? He is pessimistic on energy services.

You need to be cautious on this. They have a lot of exposure to the oil/gas sector, which is very tough at this point with the hydro-vac’s. About 25% of their business is directly affected. The Key Full (?) numbers are going to be very difficult for them and he wouldn’t enter a position until they came out as a minimum.

These stocks have been hit a lot harder than the actual energy names. His chart shows a little bit of resistance right where it is at, and this is probably going to coincide with its downtrend. If it can get above its downtrend of about $26.50-$27, this will probably flush out a lot of conjecture and there will probably be a lot more clear sailing. Until you can get above $30, you are always going to be guessing as to whether this is really sticking.

Because of the recent volatility and lower energy prices, this company got hit. Most recently they had to cut their build rate from 3 to 5 trucks to a lower level, to account for the slowdown they are seeing out West. Their exposure to oil sands is about 15%. Energy end market exposure is around 50%, but this is more about large pipelines that are in the ground and active, regardless of what the price of oil does. On top of this, their expansion opportunities in the US are 5-10 times greater than in Canada, and they are starting to gain more traction in the US marketplace. They are able to redeploy their hydro-vac trucks in other regions, where there is demand. 1.45% dividend yield.

A great company and got knocked down with all the oil/gas service companies. You have to realize that half of what they do is oil/gas, but half is urban infrastructure. They can shift from one to another. He was a bull on this 3-4 years ago and then Sold. It has now had a big correction, and he is easing back into it now. Although he thinks earnings will be flattish this year, he thinks ROE will be about 25% and this is a good time to get back in.