Unless there is a solid catalyst to lift the stock over next 6-12 months, would it make sense to step aside and assign these funds elsewhere like financials ( Canadian banks ) or other industrials ( US aerospace) or even Tech ( CLS ), where there is better momentum and more visibility ?
Thank You
We are still confident in WSP's long-term potential, and its large backlog does add some visibility to growth. Catalysts will be earnings and acquisitions. At least 15% earnings growth is expected next year. We would be comfortable holding the stock. That being said, companies like CLS, SHOP and PNG have better growth and momenutm. But they are also (much) more volatile. We think the banks are fine, but we would not expect the same degree of returns as they have had this year. We would make any decision here on sector allocations, rather than a straight-up swap which could change the risk of a portfolio. If another sector is under-represented we would be OK with a switch for portfolio management purposes, but we would still not view WSP as a SELL.