Aecon Group is a huge construction / infrastructure company. They do enormous projects including the new Gordie Howe bridge (Windsor / Detroit), large LRT projects, pipeline construction and much more.
Aecon’s profits have recently been abysmally low due to cost over-runs on four large projects. They now claim that the losses on those four projects are largely behind them and that they are no longer doing fixed price work on the largest projects. The claim that these big mistakes are behind them has to be greeted with a fair amount of scepticism. But it does appear that earnings are likely to be much better this year.
I am rating Aecon a Weak Buy / Hold at $12.27 and will continue to hold my shares hoping for a an exit point later this year. Fundamentally this does not appear to be an attractive industry. It is too competitive. It’s a tough way to make money. And the company does not appear to be well managed.