- Last week’s sell-off was a one time event: Stability in the oil market should return.
- Selling overleveraged and low netbacks oil producers.
- Adding to my favorite Canadian E&Ps.
- Buying two companies in the energy and gold sectors.
- Holding on disappointments such as MEG Energy and Pine Cliff.
- Selling and giving up on bad energy bets.
- The current revenue backlog is at a record high.
- The intrinsic value of the company suggest upside of more than 50%.
- The company will benefit from the oil’s recovery and the Canadian economy more broadly.
Recent news made each company really interesting for a potential future shareholder.
Indeed, Amaya was heavily punished last week. Clearly, the growth won’t be as relentless as previously thought. It might be a good entry point.
SNC-Lavalin is also trading at a discount compared to historical levels. This is understandable: the company has a few dark clouds on its head, and for a little while.
The company has been charged of corruption and bribery by the RCMP and is barred from participating in projects related to the World Bank. On the other hand, the company posted solid Q3 earnings. Stay tuned on Seeking Alpha.
Disclosure: I have no position in SNC, AYA.
- SNC will try as much as possible to settle the fraud charges out of court.
- SNC is more dependent on the commodities cycle and the Canadian economy compared to WSP.
- The 407 Highway is worth up to $20 per share.
- Intense insider buying and the share buyback will provide a strong floor for the share price.
- The Highway 407 concession in Ontario is a highly valuable asset, and the sale could raise cash for another acquisition.
- There are still great headwinds that remains in the core engineering and construction operations of the company.