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Opinions Patrick Horan
Stuart Olson IncSOX.TOCOMMENTNov 11, 2013
Stock price when the opinion was issued
As of Sep 29, 2020. Market Open.
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In the construction space his favorite is WSP Global. SOX is similar and he thinks they may be a value trap as there is some concerns about the dividend, the strength of the balance sheet and their ties to the energy sector.
Benj Gallander
Benj Gallander
Michael SprungMichael SprungBenj GallanderBenj GallanderMichael Sprung
A past top pick. The problem with construction companies is that they're much more volatile than the engineering ones. SOX is more construction, less engineering, and more dependent on the Alberta economy. It has a lot of upside from here, but it's riskier than peers Aecon, Stantec and SNC Lavalin.
Michael SprungIt has been a top pick in the past. It is a higher risk than a company that is both construction AND engineering. They have been figured as an Alberta-centric company but they have diversified somewhat. If we see any infrastructure dollars going to work, this company is likely to get them.
Michael SprungThe company has not only created some stability within operations, but also have the potential of improving operations going forward. When they converted from the old Churchill Corp. they took on a lot of contracts that were fixed price that went over budget, making it a real drag. Since then, they’ve diversified into other markets. They have more presence in other provinces than just Alberta. If there is going to be more spending in electrical work in buildings, and infrastructure to some extent, this company should still have a bit more room to run. If you own, he would take some profits and limit this to a smaller portion of your portfolio.
Churchill Corp (CUQ-T) or Bird Construction (BDT-T)? Would have a hard time choosing between these. They have different components. This one has been a disaster over the past 5 years. However, their margins appear to be bottoming out here and he doesn’t think the stock is going to go much lower. Big question here is, when do they start performing. He is starting to watch and monitor this now but is nowhere close to Buying. If they started getting out of some of their low margin locked in contracts, it would be time to very seriously start looking.