Q: Hi, What are your thoughts on owning Stantec, with respect to its current valuation and future growth vis a vis its competitors ? We have a small position and looking to add, to increase our exposure to Industrial sector. Is it prudent to wait for the quarterly results, due in a couple of weeks or take advantage of current weakness due to markets ? What would be a reasonable price range to buy ? Thank You
5i Research Answer:
We think STN could be bought between $80 and $82. Typically we would not try to time a purchase around a quarter, but if one already owns it then one has exposure already, and with the weak state of the markets we would be OK waiting. It has beatenestimates in 7 of the past 8 quarters, but the price move (absolute) on earnings has only been 3.6% over the past five years. It might still see some inflationary pressures, but we like it overall and the backlog provides good revenue visibility.