Peter Hodson Bird Construction Income Fund BDT-T DON'T BUY Sep 19, 2025

Private and public funds are going into the infrastructure space. The demand for electricity is going up and we will need more than just renewables to meet the demand. Nuclear energy is needed and the nuclear build is real. She owns Aecon for infrastructure which has a higher dividend yield and lots of nuclear exposure.

Trades at only 12-13x PE and pays a 2.4% dividend. They just bought Jacob Construction, which will boost their infrastructure business from 13% to 21% and a bigger foothold in western Canada which sees more infrastructure growth. There's more spending and demand to come in this sector. Shares are reasonable.

North of 200% return over the past year, astounding. Doesn't care for the construction component or fixed-price contracts. Everyone wants more certainty in an inflationary environment; sometimes the company wins out, and sometimes the customer does. Nothing wrong with it. Earnings outlook is quite strong.

In the engineering and construction space, he follows STN and WSP, as they're pure-play design firms.

Recent addition into portfolio. Stock not as cyclical as perceived. Backlog of work projects very good. Work and revenue is guaranteed from the customers. Recent earning announcements very strong. Recent dividend increase by 50% very strong. Company growing to a size where larger investors start to invest. 

There has been no material news, and the last news of any kind was a target price upgrade at National Bank in early December. Small caps had a rough December, and tariff fears are playing out in many sectors. But we have no news here and would consider it quite attractive today. 
Unlock Premium - Try 5i Free

Industrial stocks have come off on tariff, and other, fears. Very good ROE profile. Excellent earnings growth, with analysts projecting ~30% earnings growth a year for next 3 years. Quarters can be spotty due to lag time for project approval, so you have to own it for a while. At 9x forward PE, substantial discount to peers. 

Small position for him. If it continues to perform, he'll continue to add. 

Really likes. Numbers are fantastic. Within the engineering/construction space, this is the one to own. He hasn't bought more as his method is to buy stocks as they're working higher, and this one wasn't. Trades at 6-7x PE, with ROIC north of 20% every year. Excellent management. Consistent, large contract wins.

A lot of names in the space have had monster moves but now correcting. Coming right back to important support around $24.50. Next big support ~$22. Probably get a bit of a dead cat bounce, and then chop around for a bit more if his broader correction call is right.

Today is timely to nibble a bit, but give it some more time over the next month or so. That's when he'd really be adding exposure.

EPS of $0.50 slightly missed estimates of $0.504 and sales of $850.77M missed estimates of $946.31M. The quarter was impacted by temporary project delays as its clients adapted to rapidly chaning market conditions. Its next quarter is expected to be impacted by similar delays, and this caused some analyst price target cuts, which led to its price decline. Sales and earnings declined year-over-year, and while its gross margins expanded, it was not enough to offset the decline in sales. It has had a strong run since 2023, but with a slowdown in future growth expectations, we think investors will need to be patient on this one. It is priced decently at 10X forward earnings and 0.4X forward sales, but investors will likely want to see growth expectations resume their upward trend before the stock can see positive momentum again.
Unlock Premium - Try 5i Free