Black Diamond Group (BDI.TO)

Big fleet of mobile units. Doesn't require incremental capital. Benefits from nation-building projects will be highly profitable. Expects whole industry to tighten with all the Canada Build projects coming up, which will lead to much better pricing. 

Already generates lots of FCF. Top-notch management. High insider ownership. Still trying to get exposure to data centre buildouts. Trading cheaply. Yield is 1.06%.

Benefitting from Build Canada initiatives, as it's involved in modular units.

Traditional workcamp business on oil & gas projects, which might do better going forward with increased infrastructure spend in Canada. Real attraction is modular space business -- portable spaces that they rent out, mainly for construction projects. Portables for schools in NA and Australia. Low valuation. Very high insider ownership of ~24-25%. Not that well known.

Development of Canada's North could also benefit them. Likes management, conservatively run, lots of free cashflow. Yield is 1.32%.

BDI has been consolidating for a year now at its highs between $8 and $10, and this type of price action can lead to an upside breakout if the fundamentals continue to improve and the valuation warrants higher prices. We like its overall momentum over the past several years, it trades at an OK valuation of 16X forward earnings, it pays a small yield of 1.5% and has a decent buyback policy in place. Forward earnings growth estimates are around 15% to 17% over the next few years, and analyst estimates have mostly been rising. Growth is volatile, but its margins have been expanding in recent years and if it can continue to beat earnings estimates and grow its cash flows, we think it can eventually break to new highs, but much depends on earnings results and management's execution.

Net debt/EBITDA is OK at 2.1X, and it is cyclical to economic swings, but we think the market has priced in some of these risks at a 16X forward earnings multiple.
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EPS of 9c crushed estimate of 6.3c; Revenue of $102.2M beat estimates of $84.9M. EBITDA of $26.5M beat estimates by 13%. Revenue rose a robust 39%, EBITDA rose 37%. Commentary was good, with the company focused on both organic growth and acquisitions, and it continues to buyback stock. Debt is still on the high side but these results were solid. The stock is down 14% this year, but we think these results should get it a bit of attention. As a small, cyclical company there remains risks here, and it is more expensive at 15X earnings than many others. But we would see it as a reasonable, though higher risk, buy for small cap investors only. 
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EPS of $0.08 missed expectations of $0.086 and revenues of $91.1M beat estimates of $83.64M. This is the second consecutive quarter of disappointing results, and while it trades at a reasonable valuation of 13.3X forward earnings, its high and growing debt levels are a concern. Its valuation has been lower in the past, and so there is room for multiple contraction here. Given its high debt load and long-term declining earnings, we would feel comfortable taking some gains off the table here. With debt levels creeping higher, we feel this can begin to erode its profits and cash flow. 
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