Bird Construction Income Fund

BDT-T

This is a tough business to be in as construction and design are low margin businesses. The last couple of quarters showed some operational hiccups. He needs to see these issues turn around before investing. He thinks there are other ways to play the infrastructure wave, such as Brookfield or SNC Lavalin.

He likes the company and management. Not sure of visibility at this point, but would feel comfortable with the overall structure and the way they have been able to operate. Dividend yield of 3.9%.

This has been a very good stock. They are situated mostly in the West. Through the last few years, this has done consistently well. At some point, this is going to have a turnaround. Thinks the worst is over for them. If you are a long-term buyer, and you want to be in this space, you are probably good to go.

A great, great performer for years and particularly strong in the oil sands with a concrete business. Particularly liked the old management, not to say that the newer management is not to be liked, but it doesn’t seem to have the same colour and performance. They had a dividend cut, which was probably very prudent.

Just looked at this recently, and it was badly hit. With all the infrastructure planning, you would think that it would do well and hopefully come back. Has admired the company for a long time. They have an excellent track record. Dividend yield of 4.2%.

Canada’s 3^rd largest construction firm. The perception is that they have exposure to the energy sector, which is slowing down. There are lots of other things going on though. This is a stock that may be down unduly because of perception rather than reality. Feels the future is brighter for this company and it is the best value in construction stocks.

This has not performed very well. However, there is a tremendous amount of upside potential, particularly because the company was negatively impaired by the slowdown in Western Canada and lower commodity prices. As we hit an inflection point and see CapX budgets increase with a bit of an improvement in the Alberta economy, which should grow 2% this year coupled with federal infrastructure spending, we could see the backlog start to go up and people get more optimistic about margin growth. They recently cut the dividend, so it should be relatively safe. Has about $4.80 in cash per share on their balance sheet. Dividend yield of 4.36%. (Analysts’ price target is $10.)

(Top Pick Nov 25/15, Down 22.22%) It had improving price momentum at the time as well as being cheap and having a big backlog. They missed their Q2 and misses have really punished stocks recently. He got out. Their business slowed from where he thought it would be. It is still cheap and if you have the time to wait, it now scores in the top 20% in terms of valuation, 6 times price to cash flow. Expect it to stay in the penalty box until they can show some improved earnings.

This is the one he would be looking closely at here. Their balance sheet is quite good. Risk reward looks pretty good. It is great for individuals, but it does not trade a lot so holds him back as an institutional investor.

Management has said 2017 will be a transition year for them. Part of the issue has been a declining backlog in business and declining commodity prices. Thinks the stock is going to be challenged over the next 6 months to a year. This is one that he would rather be Selling or avoiding for the next year. Payout ratio by the middle of next year should spike out at 132%, which is a bit of a worry. Also, are they going to have a dividend.

When you see what the government is planning on doing on infrastructure and building, this company could do well. A smartly run company. Thinks it has a fair bit of upside from here.

Has owned this in the past. Just had some numbers out that were pretty good. Has a very healthy dividend, and their payout ratio is less than 100% which is nice. Expects they will continue to get a lot of work from infrastructure that is going to be upgraded over the next couple of years. Also, expects they will get some work on the Fort McMurray situation as well. If you could Buy on a pullback, that would be ideal.

Would steer clear of construction/engineering firms. So much depends on 1) winning contracts and 2) completing the contracts at a profit. Historically, in order to win contracts, companies might bid a very finely calculated price, and then get surprises on completion that will hit their profit margins.

Trudeau has done a good job of guiding the street about infrastructure spending increases. This company should get some of this money.

Has held in remarkably well given the manufacturing slowdown in Canada. One of his largest holdings in one of his funds. One of the 2 cheapest stocks in the universe that he covers. A really strong ROE at 23%. Trading at 4.5X Price to Free Cash Flow, so is really cheap. Dividend yield of 6.5%. Pristine balance sheet.