WSP Global Inc. (WSP.TO)

An engineering company that just does consulting and doesn’t own property. Fairly choppy. It pulls back once in a while and it is doing that right now. Every time it pulls back to around the trend line, you want to buy it.

A good way to get infrastructure into your portfolio. ROE is okay at around 10%. Valuation metrics are okay, but it has quite strong price momentum. A quality company. Dividend yield of 3.3% which is sustainable.

(A Top Pick Dec 5/14. Up 38.49%.) They basically buy smaller engineering firms and consolidate them, and get the efficiencies out of them. They are doing this on a global basis including the US and Europe. It still looks like there is room to go on it.

Long WSP-T/Short DOC-N. WSP-T has been on an acquisition spree and now has a massive footprint in Europe. It has a massive back log and an earnings growth priced in. You are looking at a growth story here. It could be the next SNC. Give WSP a couple of quarters to play out.

Transportation and infrastructure. They have very little exposure to oil and gas, which he feels will be weak for a long time. This is the one he would take in the engineering space.

Doesn’t own any of the engineering companies. Has global operations. A reasonably attractive company, but he is not attracted to the engineering/construction sector at this time.

This has done the best amongst the group of 4. He prefers SNC Lavalin (SNC-T), which has the best value, and he sees 20% upside in it.

Re the acquisition of the MMM Group? He really likes this strategy. The engineering/construction groups are consolidating. He would like to buy it below $40.

An engineering services company. They focus just on design and don’t have a construction arm, which means they can be a lot more nimble. This has been a growth through acquisition story. The outlook for dividend growth is pretty well muted.

Made fabulous acquisitions. It is one of the leaders in the engineering space. They have a good dividend and will probably grow it. They have a nice global business and a nice backlog. If the US starts to grow, they are well poised to benefit from it. 3.5% yield.

SNC Lavalin (SNC-T) or WSP Global (WSP-T) for a long term hold? This trades at about 20X earnings. He prefers SNC.

Return on equity is a bit low. Cash flow has not been great recently. It is a bit expensive. It has good momentum, however.

This has been a very busy business having made 2 large acquisitions which they are integrating. A phenomenal story. Management continues to execute on their strategy of core M&A, organic growth and margin enhancement. Dividend is solid. If you want to get access to a European recovery through a Canadian company, this is your company. He would like to get back into this, but probably at a lower valuation.

(A Top Pick Dec 19/14. Down 0.46%.) Technically this looks great. It broke an incredible holding pattern that it had been stuck in for about 5 years, just under $33 range. He likes the stock fundamentally. An engineering company that has been growing like crazy. Has an international presence.

An engineering and international success story. There has been a long-term consolidation on this, in or around the high $20 area. It broke out in 2013 and broke through the previous high of around $33. It is now coming back to test. He bought on the breakout, which it is testing right now. It is probably a buying opportunity again. This stock should do well over the next few years.