Stock Watch – March 2017 – Aecon

Good Afternoon Everyone.

As I sit here writing this we are in the middle of probably the biggest snow storm we have had this winter, they are calling for 30cm. It’s days like this I’m glad I no longer clear snow. I can just relax, sip my coffee today and tomorrow go tobogganing and make a mean snow kangaroo( yeah good luck eh? but he wants to make one and a couple months ago we made a sick bear)

Son's Snowman

Its been about a week since my last post and wanted to touch base. I basically keep watching my next stock buy and hoping it stays sideways or go’s down more. As some of you know I try to buy stocks 2 days before the x dividend date which in this case would mean I will being purchasing them Monday.

Since my site isn’t big enough to push the stock up or down I’ll share my views. I already have a small position in them. They pulled back like $6-8 or roughly 30% in like 3 days back in September or October.(If I recall correctly their completed projects came in under the quarterly estimate because of some delay) So I knew it was a great time to buy. Currently I’m up %22.3 already, not bad in roughly 6 months.

Aecon

Aecon Group Inc

  • Aecon Group Inc is a Canada-based construction and infrastructure development company. It operates through four segments: Infrastructure, Energy, Mining and Concessions.

Personally Industrial’s are one of my lowest sectors currently and I’ve been watching certain stocks. I find the railroads are way to high at the moment. CNR right now is $97.83 and morning star gives it a fair value of $84.00. So currently based on this it’s %16.46 over fair value.

Aecon currently is $16.79 with morning star giving it a fair value of $17.02. So based on that, Aecon is currently undervalued. Aecon’s 52 week high is $19.19 and 52 week low is $13.07. So its 12.5% below its 52 week high. Ahhhhh how refreshing, most stocks I’m looking at are right near their 52 week high. CNR’s 52 week high is $98.23 so we are currently 40 cents off.

Aecon also just reported its 4th quarter results and report for the full year 2016. They reported Record annual revenue for the year ended December 31, 2016 of $3,213 million was higher by $295 million, or 10 per cent, compared to 2015, with increases across all three main operating segments.

They also just increased their annual dividend to 50 cents per share from 46 cents, representing a 8% increase. This will give them a %2.97 yield based on current prices.

I don’t know how long term this hold will be for me, I would prefer a railroad for my portfolio but at current prices I cant do it. I think Aecon is a solid company tho and also offers a higher yield. Also we know if the economy slumps Governments throw money at infrastructure projects to stimulate the economy. What do you guys think? As always I appreciate all your comments.

Cheers

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4 Responses

  1. Leo T. Ly says:

    I too don’t have a large weighting in my portfolio for infrastructure stock. The only infrastructure stock that I have is SNC. I am also trying to add some rail companies but I am still looking for opportunities of a pull back.

  2. I mainly own passive index funds with a couple of water utilities sprinkled in. But I am always on the hunt for good stocks. I’ll have to look to see if it makes sense for me to jump in. Thanks for sharing your analysis!!!

  3. DivGuy says:

    Very interesting pick. I haven’t look at Aecon before, I might have to add it to my watch list 🙂 too! Enjoy the snow storm… I’m currently in Guatemala, nicest people on earth and great weather 🙂 hahaha!

  4. Not a bad thought – 2.97% dividend yield is pretty solid. Anything which is a hedge against inflation would be a decent bet at this point. You make a good point on buying things which will be government funded.

    Thanks for sharing PCI.

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