Author Topic: SNC - SNC-Lavalin Group  (Read 19271 times)

longlake95

  • Sr. Member
  • ****
  • Posts: 278
Re: SNC - SNC-Lavalin Group
« Reply #40 on: September 11, 2019, 06:16:09 AM »
SNC would be a great fit for BAM. They must use a ton of engineering services, especially in BIP not to mention BAM's connections around the world. He probably loves the concession side of the business too. This seems right up Flatt's alley...unloved asset....long runway of growth/business....no one else competing to buy SNC....and a distressed price.

LL


Cardboard

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 3321
Re: SNC - SNC-Lavalin Group
« Reply #41 on: September 11, 2019, 07:24:27 AM »
Ferrovial/Cintra is now adding some uncertainty to the 407 sale:

https://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aSNC-2808534&symbol=SNC&region=C

What is curious is that this was known before the open yet, the stock still rallied almost to $20 before pulling back?

I am also surprised that CPPIB did cut the cheque before the period to appeal had lapsed.

longlake95

  • Sr. Member
  • ****
  • Posts: 278
Re: SNC - SNC-Lavalin Group
« Reply #42 on: September 11, 2019, 10:51:41 AM »
Add to SNC today on the news of JF buying 11%. With JF now on board, along with Caisse, I think they now  can assert enough pressure on SNC to do the right things to right the ship.

LL

absolutbrian

  • Newbie
  • *
  • Posts: 17
Re: SNC - SNC-Lavalin Group
« Reply #43 on: September 11, 2019, 11:45:54 AM »
This is definitely a vote of confidence. Jarislowsky Fraser's firm now owns 10% of SNC. It's also notable that he's a former board member and used to own over 10% in the past before selling and buying again.
https://business.financialpost.com/pmn/business-pmn/canadas-jarislowsky-fraser-raises-stake-in-snc-lavalin-shares-rise

Cardboard

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 3321
Re: SNC - SNC-Lavalin Group
« Reply #44 on: September 13, 2019, 07:44:21 AM »
Taking off big time! This is really good as this will attract funds + technical folks.

I am probably going to trim in the $24-26 range as then it becomes more of a longer term turnaround.

Cardboard

longlake95

  • Sr. Member
  • ****
  • Posts: 278
Re: SNC - SNC-Lavalin Group
« Reply #45 on: September 13, 2019, 10:12:31 AM »
It's a 4% position for me - I'm hanging on till we see a few quarter roll by. Ya, I think it's partly a relief rally and partly coat-tailing off of JF. Either way its good. Now we just need Bruce Flatt to buy this thing, cancel the 407 sale, keep the crown jewel, and sink capital to stabilize the balance sheet. I do worry about a convent breach if earning don't march higher soon. However, with 48% or so of the stock in strong hands I think that worry has diminished some as they will force the right levers to be pulled.


absolutbrian

  • Newbie
  • *
  • Posts: 17
Re: SNC - SNC-Lavalin Group
« Reply #46 on: September 17, 2019, 10:18:12 AM »
SNC's legal case returns to court on September 20. It's trial by judge alone. SNC plead not guilt and said it intended to vigorously challenge the charges. Maybe, I'm saying this with the smallest probabilities, that the judge will throw out the whole thing.

Longlake:
  • I don't think BAM will buy it. Unless the price is really good. RBC and certainly not the CPDQ will probably not sell at a capital loss. I'm a big BAM investor and I like Bruce Flatt, but I doubt he will pay up unless he sees a good bargain. But hypothetically speaking, I agree, BAM's playbook could do good work with SNC. However many obstacle in the way.
  • SNC sold the 407 and they maintain 6.7%. There's no going back on the sale. The news of Ferrovial/Cintra is immateriel because the sale is completed. Cintra and CPPIB had all agreed that even if the courtís decision were to be reversed on appeal, the sale would proceed and CPPIB and Cintra would adjust the number of shares of Highway 407 they own.

Jarislowky's buy sends a big vote of confidence for SNC as the stock as past the $20 mark.
[/list]

longlake95

  • Sr. Member
  • ****
  • Posts: 278
Re: SNC - SNC-Lavalin Group
« Reply #47 on: October 31, 2019, 06:59:24 AM »
Nice Q3, even ex 407 sale. Nice to see resource backlog rolling off and what remains is mostly light rail projects. It's time to carve off resource E&C, and just provide engineering services...

https://www.snclavalin.com/en/media/press-releases/2019/31-10-2019
« Last Edit: October 31, 2019, 07:01:57 AM by longlake95 »

absolutbrian

  • Newbie
  • *
  • Posts: 17
Re: SNC - SNC-Lavalin Group
« Reply #48 on: October 31, 2019, 07:30:54 AM »
I guess SNC didn't celebrate Halloween today with one of their freak show horror quarter. From what we have seen in the last year, this is refreshing. The stock has responded well, up 13% this morning. Ian Campbell has been nominated as CEO. They didn't delever has much as I expected but now maintain some cash, close to a $1b. They will need it for future infrastructure projects in the backlog and potentiel cost overruns. Now they need to execute.

no_free_lunch

  • Hero Member
  • *****
  • Posts: 1631
Re: SNC - SNC-Lavalin Group
« Reply #49 on: December 04, 2019, 05:52:23 AM »
I am in on this one.

I don't have an advanced understanding of SNC but I will put out my quick thesis. The sale of a portion of 407 was for top dollar and the proceeds have allowed the company to basically clear out their long term debt.  Engineering services are doing something like a billion in operating cash flow a year.  Despite the scandal engineering services has a huge backlog.  Earnings should be well over $2 per share next year and on top of that with a deleveraged balance sheet the company will eventually have opportunities to grow via acquisition. There are additional catalysts available including sale of O&G.

It is not without some risk but seems cheap and a nice alternative to the overpriced market.