Badger Infrastructure (BDGI.TO)

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.

He likes this company. It has done very, very well. All of the companies that have servicing operations that touch on the oil/gas sector are having a difficult time.

Thought their last quarter suggested their expenses were getting out of hand. A huge business from the oil patch. He is watching it.

Had a great run. Have phenomenal margins of over 25%. A very profitable company. They manufacture and operate hydro-vac trucks that are used to excavate, using water and a vacuum. Half their business is in oil/gas, as well as pipelines and utilities. Last summer they announced they were reducing the number of trucks they were building, from 5 down to 4, and the market got very concerned. Also, had a bit of a stumble with their earnings. The most recent numbers show that the margins and earnings are back up. They now have a solid plan in place, where they are going to double the number of trucks in the US from 450 to 900 in the next 5 years. Dividend yield of 1.1%.

A fairly strongly moving stock in an uptrend from early 2013 that broke down. Rather than being a complex Top, it basically just peaked and then dropped like a hammer. It is currently attempting to form a base. If this continues moving sideways for a bit, and then break to the upside, it might be a good play. If it got to $30 or so, he might be tempted to look at it.

Originally was an income stock. He sold it twice on the way up. He has not added to his small remaining position because the growth is okay, but the profitability is declining. He may sell or if it reverses the profit trend, he may buy it back.

Expecting dividend increase for the past year. Half their business is utilities. Business is good and they are growing fairly rapidly.

They are a pioneer of the business. Their edge is that they manufacture the trucks. They were ramping up their manufacturing due to demand until last quarter when they said they would take it down from 5 trucks to 4 trucks per week. This took the momentum off the stock. But management is managing supply with demand so they don’t flood the market and bring down their daily bill-out rate. Buy it here for upside within a couple of quarters of about 30%. They manage the supply side of the business which he likes.

They use high-pressure water, rather than mechanical means, to tunnel. This means it can be sent into sensitive areas. Have been very good at it. Unfortunately, the technology is not patentable. People can build a big truck with a pressure pump and do the same job, which is exactly what other people are doing. Have lots of competition which is eating into their margins.

(Top Pick Aug 28/13, Up 50.56%) Still holds it. She is buying it down here. They reported a decent Q2, but guided they would slow the build rate on their trucks. It gave people an excuse to sell. It is a fantastic company. Great balance sheet, & dividend. It will take a couple of quarters to build back up, but she would buy it here.

This had been a terrific story. The stock had quadrupled. He thinks it went too far and doesn’t think it was ever worth $90 a share. It will probably revert to some good value of around $18-$20. If you own, consider selling.

This has been doing poorly in the summertime, along with the rest of the sector. Seasonal strength for industrial stocks like this tends to be from the end of October through to May. Right now this is in a significant decline.

The problem is that it is a product that other people can execute on. There is nothing to stop others from building trucks like theirs. Feels the stock got ahead of itself.

Took partial profits twice along the way. He is uncertain whether he will keep the rest or not. They disappointed in the most recent quarter. They put a lot of money and effort into expanding their US presence and wonders if they have the depth of management for it. He will track over the next quarter of two. Don’t put new money into it.

Excavating using water pressure and suction. This has a lot of benefits that utilities love. Dominant player in North America. The only issue he has is that they have gotten so expensive and there is a lot of expectation into what they can do. It is not a complicated business and there are other companies that are trying to grow their business. He feels they are going to hit some bumps on the road and the higher multiple will not be supported. This is exactly what has happened. They have a good business and will continue to be a leader in this space, but he would look at the multiples and wait for a good entry point.