May 17, 2015 Stantec

Stantec is updated and remains rated Buy, now at $35.78.

Stantec is a wonderful business (has earned ROE in the range of 17% to 19% for years despite a rapidly growing equity base). It has excellent management. And its available at a reasonable price. It’s a Buy. It has many years of growth ahead of it.

The stock price had not increased much in 2009, 2010 and 2011. It then increased a lot in 20012 and 2013. It was flat to declining in 2014 and early 2015. It recently rose from lows around $30. Meanwhile over that period earnings were steadily growing on an annual basis. This is not unusual, stock prices often move far differently that stock earnings as investors try to predict the future and react to things outside of the company. Good companies like Stantec tend to rise over time. But they don’t do so in straight lines.