WSP Global Inc. (WSP.TO)

(A Top Pick Nov 26/14. Up 13.62%.) Still likes this. It benefits from FX tailwinds. A good chunk of their business is in the US and the UK. Backlogs are very strong. Their Canadian component is hurting them, but they mitigated that by making an acquisition that is much more Ontario focused. Still a Buy at levels like this.

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.