Bird Construction (BDT.TO)

One of the strongest-performing Canadian stocks this year. Recent pullback. Question now is whether a lot of the optimism is already reflected in the price. Record backlog continues, winning large infrastructure projects. Management's executed exceptionally well. About 9% upside potential from here.

Most interesting angle is AI. Bell chose BDT as its preferred construction partner for a multi-year Canadian data centre buildout. Fundamentally, a great business. To enter, wait for a pullback. If you own, take some profits. Don't chase aggressively here.

Margins are thinner in construction companies, so he typically doesn't buy in. With thinner margins, or cost overruns, easy to miss on a quarter. Great spot right now, stock's doing extremely well. Company's bigger than it was. Scrutinize the valuation. In the sector, hard assets seem to be a better bet than software-related services.

Many tailwinds: AI data centre builds, EVs, renewables and nuclear power. Their order backlog is growing. Shares are sharply higher, and so is their PE. Needs to see a pullback and consolidation before moving higher.

(Note the short timeframe.)  Very bullish. Just because it's up 100%, doesn't mean it's time to sell. Exceptional backlog growth, margin expansion. Guidance is actually very conservative. Huge opportunity for data centres. Participating in Ring of Fire, which he's bullish on. More room to run over next several years.

Will likely move higher given LNG terminal expansions, renewable projects and more defence spending. They just scored a deal to build Bell Canada's data centres.

On fire. A bit technically overbought. The $11B backlog is great. Data centre contract with BCE. Multiple's not expensive at 16x 2027 PE for 30% growth. Trades at a higher multiple than WSP and ATRL, as it's riskier. Try to get it cheaper.

Sentiment is the reverse for WSP and ATRL. Fears of AI disruption curtailing growth. Both look meritorious at these levels. He models 17% growth for ATRL at 14x PE. WSP models 17% growth at 12.5x PE. These 2 are more of a Buy, wouldn't sell.

The chart of 2024-5 was rangebound, then broke out. It's overbought now after a break out.

It has a high valuation with free cash flow of $1.30. The construction business is volatile and backlogs can change with a slowdown. They say their margins are going up 80% next year but margins are 67% in the industry in general so he is not betting on outsized margins.

Very bullish, despite stock runup. He wouldn't be trimming or selling aggressively.

Big backlog. Clear path to margin expansion. Directly exposed to Build Canada theme. Multi-year visibility for business to grow organically at fast pace. Strategic acquisitions. Top management.

Federal government and infrastructure are the keys here. Small cap, not a lot of eyeballs on it. He likes to get in early. It can grow on its own merits and organically to become a large-cap stock. 

Over 75% of combined backlog is in a collaborative model. Moved from cyclical contractor to a more diversified infrastructure platform. Recently announced combined backlog of $10B -- multi-year revenue visibility. Should see steadier revenue and profitability growth. Up this year, but long road to go. 

Pays dividend monthly. If FCF grows as he expects, dividend should grow. Yield is 1.87%.

No qualms about buying. General contractor that builds industrial buildings and infrastructure. Energy, defense, trade/transport, healthcare, nuclear. Good grower and compounder, growing dividend at a 10% compound pace over last 8 years. Trades at 15x PE, all-time highs. Strong chart with higher highs/lows. Market cap is fairly small at $2.3B. Yield is ~2%.

Some pretty high-profile contracts in its backlog or underway. Examples include Peel Memorial Hospital in the GTA, BHP Jansen potash mine, Bruce Power nuclear. 

He has a better idea, though it's not a perfect substitute for this name. See his Top Picks.

Directly exposed to the Build Canada theme. 100% of its business is in Canada. Massive pickup in its backlog, and that backlog is coming in at much higher margins than the current business. Highly visible, high predictable. Expects margin expansion, high profitability, and free cashflow generation. 

Extremely cheap. High-quality business, so even multiple expansion is possible. Whether a company has enough resources to meet the backlog is a good question, and this company has a good track record of doing so. Reputation is on the line if it doesn't deliver. Yield is 2.85%.

Will benefit from PM Carney's new infrastructure projects. They have a massive backlog. The stock did well for a while till it missed a quarter and sold off. Growth will resume and margins will expand next year. Well run.

Tiny, with market cap only ~1B. Tough year for contractors. Flipside is Government of Canada infrastructure spending will bode well. Beat expectations. Trade issues holding back spending in short term. $10B backlog. Nice entry point for long-term hold.