RE:RE:RE:RE:RE:Scotia / Target 38$Gabriel sounds so convincing. You might as well apply to be the new CEO. Your interest gonna be so aligned with the shareholders. Haha.. Strong insider ownership.
However, you obviously have your rosy glasses on.
Nevertheless, right now is the perfect time to accumualte cheap shares.
Gabriel wrote: Hello Alex,
SNC is the only stock I trade on the TSX because my system relies on selling naket puts and covered calls or long debit calendar options and the bid/ask spread (to close a deal) on the US markets is often 0.01$ (the market maker accepts 0.01$ over or less than the bid ask average depending if you are buying or selling). I have taught derivatives at the graduate level. Deep learning tools are getting in this business and I would be gald to supervise a PhD if there is a candidate here .. if you would like to work for a hedge fund after you graduate.
As a top engineering and economics infrastructure specialist, on a world scale, advising the most prestigious and select institutions and agencies abroad and in Canada, SNC is in a business I understand very well and I know the value of. I have advised SNC on many design (such as Champlain or H25) and numerous litigation issues but not since 2018. I started buying 25,000 shares in 2019 at 36$ based on the valuation of the 16,67% stake in the 407. I had the optimistic, pessimistic and realistic valuations of Ferrovial and did mine. Basically I was projecting earnings of 150m in 2019, with a past average revenue growth of 7% (GTA growth, induced traffic from added congestion on 401 and fare increase) higher than the cost of money or discount factor. Basically this meant that the net present value of future earnings of the 16.67% was higher than 79 X 150m or about 12B minus taxes and various risks. Therefore, at 36$, the market cap was 6B or so. I had Atkins, ex SNC Eng'g Services (besides Atkins and they have a tremendous value) and Nuclear Candu! for free. I was convinced there would be a deal with Justice Canada as I advise them (or am against them) on other matters as infra expert and I knew they always prefer a settlement. Yes I told them I was a shareholder and a ban in Canada would be a ban worldwide (it is written in all tender/procurements, if you are banned here you are banned there too).
If I was happy to buy at 36$, I am delighted to buy at 23$. So as SNC dropped, I sold puts and gladly averaged down to below 24$ on 525,000 shares and wil keep adding below 35$.
If SNC had gone up to 40$ in 2019, I would have made 25,000 shares * (40-36) $ = 100,000$ and left my money in term deposits.
Today I am looking at 525,000 shares * (50 - 24) $ and even better 750,000 shares (50 - 22) if it drops again. So no, I am not trying to boost the share price. The value today means an opportunity to buy and definitely not to sell.
My vision is beyond. I see an EBITDA of 1B in the next 5 years, a float reduced from 175,5m to 125m and a PE multipe of 12, i.e. a stock price of 100$ and my shares rolled in a trust.
I may end up helping the executive team get there. That means a substantial reduction of my consulting revenue and a university leave but that would be a hell of a great ride.
Why am I posting here. I am posting to share and show how we can try to be the most decent. I have always done it this way and it has paid tremendously too but that was never the intent.
So either way (if the stock goes up now or later) I win. I am not worried a bit.
Send my gratitude to Prof. VS.
Gabriel