Stantec Inc (STN.TO)

He likes the infrastructure space. It is more talk than spending right now. STN-T is more engineering than construction so there is no project risk. It will take some patience.

There had been a huge, huge spike in all of the engineering/construction companies when Trump came out with all his plans on infrastructure spending. When it became questionable as to how much of this pro-growth agenda was going to be enacted, these stocks started to fall off. This company is a good acquirer and has pretty good management. Any pullback would probably be a reasonable entry.

He wants to participate in infrastructure. So far it has all been talk and he wants to be there for when the money starts flowing in. A lot of infrastructure is not glamorous – old infrastructure like water.

We are seeing increased infrastructure spending. STN-T just bought NWH, a water platform. They have a stable backlog. They have made satisfactory progress on integrating NWH, which people were concerned about. Get behind this name here and now.

The perfect trading stock. The chart shows a long period where it bottomed at around $27-$28 and topped at around $35. Currently it is near the top of the trading range, so he wouldn’t buy it here. If it broke out, that would technically be bullish.

Technically this looks like it’s at a very interesting pocket, where he would care to buy it at around $34. It also looks fine on a longer-term chart.

(Top Pick Sep 8/16, Up 12.33%) It is possible you will get near term down side if there is a correction in the market. From here there is decent upside over the long term. He believes it is a business that will grow over the next couple of years regardless of Trump.

Engineering. Just bought this in the last couple of months. Until recently, it was largely Canadian, but the latest merger moved them into the US. With both the US and Canadian governments talking up infrastructure, this is an area that you will want to be invested in.

An excellent company. He used to own this, but its valuation got to a point where he just didn’t expect it to do much better. Since that time, it has been in a holding pattern. If it was 15% less then its current price, it might be worth looking at.

Over time it will turn out to be good. The valuation is fair. You can own it over the long term. He believes you can bet on management.

The chart was drifting down, down, down and away, and then all of a sudden along comes Mr. Trump and gives North American infrastructure stocks a shot in the arm, and the stock jumped. There is quite strong overhead resistance at about $37, and his FMV is about $42, so the stock can move higher from here, but is not fabulous value until something interesting comes along.

Infrastructure company. This is going with the Trump theme. They have 60% of revenues coming out of the US. An interesting name if you want exposure to the Canadian infrastructure budget, and the potential US infrastructure budget. Trading a bit lower than its peers, so a cheaper name that might pull back less if the infrastructure story doesn’t play out. They’ve also done an acquisition of a water infrastructure company. Dividend yield of 1.25%. (Analysts’ price target is $36.38.)

Construction and architecture. They’ve turned the corner for the 1^st time in 3 years. They’ve made an acquisition that is in the water business. Creating environmental as well as infrastructure for water is going to be a big theme going forward. Dividend yield of 1.31%. (Analysts’ price target is $36.25.)

Engineering companies will eventually benefit from infrastructure spending in Canada and the US, but it is not going to be overnight. This is a Tomorrow stock. It may even go down a bit. Dividend yield of 1.56%.

A good business. Whenever he looks at a business, he looks at 3 things. The fundamentals of the industry, the financials of the business and the technicals. These 3 add up pretty well for this engineering/construction space, and thinks it is a space that is going to do very well going forward. This company is a little more sensitive to oil/gas and mining spending, so he prefers Aecon (ARE-T) a little more.