Bruce Murray Stantec Inc STN-T HOLD Mar 20, 2018

A true compounder in Canada. Respects management, but it's fallen from its summer peak due to profit-taking. It's a buying opportunity now. Will grow earnings in double digits for many years. Are exposed to the right verticals. Fine management.

Lots of infrastructure spending to be done. Today in the space, he'd prefer WSP (which he owns) over STN, but the whole group looks really strong.

Great environment for engineering and similar services. ROE is ~13%. PE's of all these companies are getting up around 40x trailing earnings. Rather fully priced. Very good exposure to the US, and the USD is strong and likely to remain so for a while.

In a trade war, services may not be as badly affected as some products, so these companies could be somewhat of a haven. 

Big fan of the space, especially with the incoming US administration. This name had done a tremendous job over the years. But take a look at ATRL.

Canadian engineering firms have a strong business model in Canada, and they're continuing to expand outside Canada; lots of opportunities to do well. Buy a bit now. If price goes up, you'll be happy you got in earlier. If price goes down, buy a bit more to average down. 

Owned it years ago. Run well, acquires a lot, and profitable. Growth has stalled, US tariffs are a question, but should do well.

Services aren't goods, so they won't be subject to border tariffs. Engineering services have secular growth opportunities. Meaningful US position, and US is growing faster than Canada. Much revenue comes from government, and is a risk, but doesn't negate the strong secular tailwinds.

We continue to like STN, but at the time we felt its valuation was lofty relative to its historical averages, and we were looking for higher growth opportunities elsewhere. We think it is a solid moderate growth name, and for a long-term investor, we would be comfortable holding it over the long term. It can go down along with the market if we continue to see declines for the TSX, but it has a strong history of margin expansion, revenue growth, and free cash flow growth.
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Attractive name. Global. Pure design, before projects are even built.

Banner earnings report. Revenues are growing faster than analysts expected. Into environmental architectural projects, especially in Canada and US. Up 25% YTD. Long-term compound annual return would be ~15%. Right spot, right time.