SNC-Lavalin Group Inc T.ATRL

Next one is Aecon

[Gabriel]

I still have about 500,000 shares of SNC but have started a position in Aecon. For those interested who like to buy great companies at great prices and do not nag: Aecon would have cleared an EBITDA of 375m had it not been for its 4 LSTK contracts, two of which which SNC. It has less than 62m shares or 670m market cap and its remaining stake in the Bermuda airport is worth over 170m. It has 7 B backlog work with 10% remaining in LSTK. Selling at less than 3x EBITDA excluding remaining airport  concession stake.

https://www.cantechletter.com/2023/07/aecon-group-has-price-target-lowered-at-ia-capital/amp/

[Ronbromleygross]

Thanks Gabriel Just looked at the write up and financials on Aecon.  Not bad.  I like the fact it is closer to its 52 week low than SNC is.  SNC is at the top of its 52 week range.  We had a good run on SNC over the last month.  There could be some profit taking on SNC for a bit before the next run up gets going.   I will wait a bit longer before I decide if I

[rad10]

Makes a lot of sense.  SNC is one of our largest holdings now.  Spent a lot of time second guessing during the dark days thinking we should have been in Aecon or WSP instead.  Everything works out in the end.

[Ronbromleygross]

How many grey hairs or sleepless nights did many invested here endure over the last 4 years?  Be honest with yourself.   Yeah that's right.   When you have a few hundred shares it's maybe immaterial to large stakeholders but to the young ones or students it's still a lot of money to them which we shouldn't ignore them.  Many of us here had or have several

[Gabriel]

I have the same number of shares in both. Both will be up 10$ in the next 2 years, one from 10$ and the other from 40$.

[Ronbromleygross]

My guess is both of your forecasts Gabriel look very realistic.  2 years max very likely.   Could happen much sooner on both if the legacy LSTK contracts on both companies prove to be a "non risk event".  Markets are waiting for proof imo as I said a few times already.  All good as I had a $40 SNC sp target end of 2023 and $50 sp end of 2024.  Sticking to it

[Ronbromleygross]

Gabriel what's your avg price on SNC and Aecon if you don't mind sharing? 

[Gabriel]

Below 20$ for SNC and 11$ for Aecon. I started Aecon lately, not in December because it was highly indebted. They have since sold about half their stake in the Bermuda airport concession for 170m net and their road business for 235m or 155m net totalling inflows of 325m net in H1 and their debt now is reduced to about 270m. Plus they have 50.1% of the airport concession. And they are in about

[Ronbromleygross]

Thanks as usual.  Had my eye on Aecon several years ago when it was about $8 but never pulled the trigger then because of its financials or some other reason back then I can't remember now.  Will give this one another thorough review.  Will advise when or if I pull the trigger on this one.  Thanks for the heads up Ron