WSP Global Inc. (WSP.TO)

Likes the construction business. Canadian government appears to be moving toward infrastructure spending, and WSP would capture some of that. If a massive project were announced, he'd be interested.

Might have more upside, but he wouldn't add here. Too cyclical for him.

One of the highest-quality ways to play global infrastructure spending. Pullback and volatility in the 1-year chart. Strategic push into power and energy. Acquisitions have focused on energy consulting. 10/10 on fundamentals. Long-term compounder.

Pressured by risks surrounding AI. Those risks are overblown, and are abating. In fact, it will benefit from AI. Though pricing structure will change, should lead to margin expansion. Participating in the data centre buildout.

Doesn't own any pureplay engineering stocks. Always tend to be too expensive. Bid up on future infrastructure needs. 

See his Top Picks, one of which has a division devoted to engineering services.

Global engineering and construction. Another case of AI causing baby to be thrown out with bathwater. Fat chance that AI is going to build the next nuclear reactor or dam or data centre. $17B in backlog. 

Big, global scale. Serial consolidator, and recent large acquisition makes it a much bigger player in US power and energy markets. Yield is 0.60%.

FMV trend is beautiful. 5-year compound balance sheet growth has been 16%, a nice ROE. Got ahead of itself and pulled back to FMV, very common. He'd love to buy if it pulled back to $165, which is 2x book and has been very stable support.

Has owned this 5 years and would buy this pullback. They grow by buying companies and organically. They enjoy big growth in their end markets; they bought a big power company last year with customers in the U.S. This sector has pressured this sector, because of AI fears. WSP argues this is not accurate and she agrees with them. WSP is using Microsoft AI tools to help their business.

WSP only provides breakdowns for its EMEIA division, which encompasses Europe, the Middle East, India, and Africa. This division represents roughly 30% of revenue (pre-acquisition). WSP maintains a solid presence in Qatar and the UAE. They estimate total regional exposure at 4-7% of revenue. While this presents some risk, it's unlikely to be material given the nature of long-term contracts that can take years to convert into revenue. Unlock Premium - Try 5i Free

Excellent way to go upstream from the data centre buildout. Lots of work in its power & electrical segment for data centres. Global. Put this on your radar. Massive $17B order backlog, even if they don't win contracts in Alberta.

Core holding. Great executional track record with M&A and organic growth. CAGR of 20%. With the global trade war unleashed, countries are looking to spend internally on things like infrastructure. This is where WSP shines. Yield is 0.68%.

She really likes it and would add. Although based in Montreal only 15% of revenue comes from Canada. Its business is very global. It has grown organically and though M&A. A couple of acquisitions have grown its power and energy vertical which is good for the demand from data centres. It is now the largest engineering, design and services company in the US. It focuses on engineering and doesn't get into construction.

Tremendous job over the years, good organic growth. Big fan of the CEO. More room to keep growing and keep making accretive acquisitions. He's very bullish, even at these levels. Selloff was unwarranted. Great buying opportunity if you have a longer-term horizon.

On his radar. Likes the engineering space. Rolling up engineering companies around the world, large acquisition in last couple of weeks. That's where most growth is going to come from -- buying up companies by using debt and a bit of equity to finance, paying down debt, and getting synergies. Executed well on this strategy for last 10-15 years.

Multiple has come down. Nice time to pick away, but not quite at the entry price he's looking for. He wants a PE ratio below 20x, and it's still ~22-23x.  Would likely scoop up if it fell 15-20% from here.

Best-managed engineering/construction firm in Canada. Recent acquisition is attractive. Well managed.