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Has anyone here analyzed or already holding a position in Aecon Group (ARE)?
The name would be familiar to most of you - it's pretty much a household (rather, roadside) name.
I'm considering a long position in this stock as a defensive and infrastructure play.
Their financials seem sound and typical for a company of this type.
P/E is in the mid teens and the other price ratios indicate a slight undervaluation.
A low dividend yield but a very low payout ratio as well, which is good.
Debt/Equity ratio is lower than the industry average. However, one red flag is that their net income fell last year from the year before, although revenue was up.
I'm expecting that with increasing govt. spending on infrastructure, that might change.
They've recently won a contract for reconstruction of part of Hwy 11.

It's largest competitor is SNC - much bigger and more diversified.
However, at this time, SNC appears over-valued, IMHO.
There's also BDT - smaller in all aspects.
Higher dividend yield because of its trust structure but not really compelling.

My opinion is that the stock is undervalued right now ($12).
I expect it to recover it's 2007 - 2008 valuation of between $14 and $15 in the short term, and perhaps go up to the $18 - $19 range thereafter.

What do you guys think?
Has anyone researched this company?
Buy, screaming buy, run like hell or just meh?
 

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Has anyone here analyzed or already holding a position in Aecon Group (ARE)?
The name would be familiar to most of you - it's pretty much a household (rather, roadside) name.
I'm considering a long position in this stock as a defensive and infrastructure play.
Their financials seem sound and typical for a company of this type.
P/E is in the mid teens and the other price ratios indicate a slight undervaluation.
A low dividend yield but a very low payout ratio as well, which is good.
Debt/Equity ratio is lower than the industry average. However, one red flag is that their net income fell last year from the year before, although revenue was up.
I'm expecting that with increasing govt. spending on infrastructure, that might change.
They've recently won a contract for reconstruction of part of Hwy 11.

It's largest competitor is SNC - much bigger and more diversified.
However, at this time, SNC appears over-valued, IMHO.
There's also BDT - smaller in all aspects.
Higher dividend yield because of its trust structure but not really compelling.

My opinion is that the stock is undervalued right now ($12).
I expect it to recover it's 2007 - 2008 valuation of between $14 and $15 in the short term, and perhaps go up to the $18 - $19 range thereafter.

What do you guys think?
Has anyone researched this company?
Buy, screaming buy, run like hell or just meh?

For some reason, the Canadian Engineering companies SNC, Stantec, and Aecon are overpriced compared to their American counterparts like Flour and Jacobs Engineering (JEC). I bought FLR and JEC recently, and both have come up nicely, and still I think there is lot of room for both of them.
 
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