Aecon is updated for its Q1 results and rated Speculative (lower) Buy at $18.76
Aecon was just added to the list a few days ago. It’s Q1 numbers came out and I have done an update for that.
Based on Q1 its numbers are improved. 2019 is expected to show a big increase in revenue and a meaningful increase in profits. This was the case in Q1 although profits merely became less negative. The stock could certainly rise from here. But I have hard time “getting past” its record of low ROEs and its low gross profit levels. It takes on large, complex and important construction projects and yet does not seem to make a very good return most years. Q1 is seasonally a tougher quarter but I have a hard time understanding why it did not make at least some bottom line profit in Q1. There were no unusual problems noted in Q1 and yet the lack of profits. The bottom line is that it could be bought for the potential earnings growth this year but it does not seem like a reliably good investment for the long term. But perhaps a different picture will emerge by the end of this year.