# Aecon (ARE.TO)



## bds (Aug 13, 2013)

Anyone else own ARE? It's been a great holding for me so far. I'm wondering why it's down 5+% this morning. Results yesterday show earnings up and a dividend increase.


----------



## leeder (Jan 28, 2012)

This might answer your question: http://www.proactiveinvestors.com/c...mps-after-q4-profit-drops-by-half--52699.html


----------



## bds (Aug 13, 2013)

Whoops, I read revenue and thought earning, looks like I need a coffee! Thanks for the link.


----------



## JordoR (Aug 20, 2013)

I have a reasonably sized position in ARE as well. Purchased in January of this year, so probably haven't seen as large of an increase as others - but have been happy with it so far.

It was also a MoneySense All-Star pick for 2014 which reinforced the research on my decision to purchase.


----------



## lostwords (Feb 21, 2014)

JordoR said:


> I have a reasonably sized position in ARE as well. Purchased in January of this year, so probably haven't seen as large of an increase as others - but have been happy with it so far.
> 
> It was also a MoneySense All-Star pick for 2014 which reinforced the research on my decision to purchase.



I noticed when I read MoneySense. I hold out buying it at the time because I figure many would buy it after reading MoneySense. I usually look for yield above 2% and this wasn't it


----------



## AMABILE (Apr 3, 2009)

bought some AECON ( ARE ) to-day @ $14.40.


----------



## hollyhunter (Mar 10, 2016)

ARE.TO has found support at 13.07. Technical signal turned to buy. Six months target: 19.52.


----------



## jargey3000 (Jan 25, 2011)

nice-looking 1 year chart....but why'd the arse fall out of it at the end of October? 
good time to get in now, or what?


----------



## agent99 (Sep 11, 2013)

We were held up on 401 today because of construction. Aecon again. They seem to be everywhere. Seems they have lot's of work. Key would be - are they making money?

I bought their convertible debentures ARE.DB.B soon after they were issued	(5.50% coupon, mature 31-Dec-18 (but likely will be called 31-Dec-17)	102.25 (par is 100)	4.37% yield to maturity, less if called 12 months early (3.43%) ). Still pretty good yield for fixed income like investment with 1 (or 2) yr term. Not much downside - you get $100 back regardless plus interest. If shares prices go up, CDs can go up to and increase your return. This because you have right to convert to shares at $20.00 if they get there before CDs are called.


----------



## agent99 (Sep 11, 2013)

*Aecon ARE and it's convertible debentures*

It appears that Aecon is to be taken over by a Chinese company (subject to government approval) Stock surged today. Offer is for $20.37 per share. Now at $19.73. http://business.financialpost.com/n...onal-holding-ltd-inks-deal-to-buy-aecon-group

I don't own the stock, but do own the convertible debentures. Conversion price is $20.00. At present I have a small gain on the debentures. Problem I see in holding onto the debentures, is that they will be called either after Dec 31st or on change in control of company at par $100. They trade at present at $103.5. (I paid ~$103). I have a hard stop at $105.50, but that is probably too high (changed to 103.5 tonight!)

If share price keeps going up ($20+), so will the debentures, because the shares can then be bought at a discount. But at some point, I assume the debentures will drop to $100 + interest. So what to do? Hardly worth converting for 37c per share (I would have 1000). Interesting if there are buyers in morning at 103.5

Interested in comments and thoughts from others owning or having knowledge of these debentures.

Aecon Group Inc.	ARE.DB.B	5.50%	31-Dec-18	(can be called 1 yr earlier at par)
Price: $103.50
Conversion ratio 5.00	
Conversion Price $20.00
Current price of stock ARE	$19.73


----------



## james4beach (Nov 15, 2012)

Merged this post into the existing Aecon thread. Wow, huge price jump. I presume this kind of takeover will be closely scrutinized and isn't a "done deal" considering it's Canada's largest construction company with a 100+ year history.


----------



## agent99 (Sep 11, 2013)

Looks like I am SOL on this one  Should have sold yesterday! With 5:1 conversion, can't see anyone paying more than par value which is same as buying shares at $20 (they traded yesterday at $19.73).

Not really a big problem. I knew CD could/would be called soon after Dec 31st and based purchase on that. Unless there is a shareholder movement to reject the offer or negotiate a higher price, looks like waiting for call at par is best for me (collect interest until then)

Update: Sell at $103.50 went through???? Stock price dropped perhaps on news government not happy due to lack of consultation and because 10% of Aecon business is nuclear. But CDs sold at what seems too high a price? Something I don't understand here, but I am happy!


----------



## gardner (Feb 13, 2014)

I haven't seen much news since the Chinese deal was blocked. They are issuing 5% convertible debt and I was considering signing up for a few $K. The $24 conversion price seems a bit high though. Anyone considering these?


----------



## kcowan (Jul 1, 2010)

Yes I took a pass. The $24 is very high. Normally it would be 25% above recent trading patterns (so $19). Plus they have an enormous amount of debt. It appears this is to replace some that are coming due in December that was paying 5.5%. I suspect it trade at a discount after the IPO.


----------



## gardner (Feb 13, 2014)

kcowan said:


> Yes I took a pass.


That's the conclusion I reached also. $24 is too much of a stretch, and 5% is not sweet enough to take the risk.


----------



## kcowan (Jul 1, 2010)

AECON was one of Fabrice Taylor's picks:


> Aecon is an engineering and construction firm. The stock sold off recently after a failed takeover attempt by a Chinese company, but subsequent results have propped it up. Canada has a huge infrastructure deficit that should benefit Aecon and other firms. The federal Liberals have a big infrastructure budget that they’ve been slow to deploy. The backlog currently sits at an all-time high and the valuation on a forward basis is not rich. I last bought in July at $15.50.


I suspect he is promoting his stock now that he is in.


----------



## londoncalling (Sep 17, 2011)

Aecon reports year-end 2021 results (tmx.com) 

I was expecting a bad quarter for Aecon but I think today's drop is a slight over reaction on a day when most of the market went up Haven't had a chance to fully digest the report. Considering a position around $15.00. Anybody follow this one?

I remember the buyout attempt back in 2017 and the excitement over a deal that definitely would not get gov't approval. Great trip down memory lane.


----------



## londoncalling (Sep 17, 2011)

Aecon reports first quarter 2022 results (tmx.com) 

Still on my watch list as a replacement from my sale of BDT a few months ago. Trading at 52 week lows.


----------



## KaeJS (Sep 28, 2010)

It's a buy, imo. ^

I bought some a little early at $16.04.


----------



## londoncalling (Sep 17, 2011)

I fought the temptation of pulling the trigger today. If tomorrow is a down day and it heads below $15 I will likely initiate a purchase.


----------



## KaeJS (Sep 28, 2010)

londoncalling said:


> I fought the temptation of pulling the trigger today. If tomorrow is a down day and it heads below $15 I will likely initiate a purchase.


I can't see how tomorrow would be green.
But crazier sht has happened


----------



## londoncalling (Sep 17, 2011)

Order filled today at $14.50.


----------



## KaeJS (Sep 28, 2010)

londoncalling said:


> Order filled today at $14.50.


Nice.
Been debating adding some more to my position. I ended up buying up REITs today instead.


----------



## londoncalling (Sep 17, 2011)

Share price is in the $10 range. To add insult to injury the stock has been removed from the TSX 60

S&P Dow Jones Indices Announces Changes to the S&P/TSX Composite Index and S&P/TSX 60 Index (tmx.com)


----------



## KaeJS (Sep 28, 2010)

I'm surprised by just how much this stock has fallen.

Interesting that it is up 3% today. But I didn't look for any news.

My last buy was in the $11 range and I think I am done with adding any more to my position. I do think that the stock will come back over time when inflation and rates start to chill out.


----------



## londoncalling (Sep 17, 2011)

I am surprised as well. I haven't had a chance to look but it may just be volatility. 

I think their project backlog big as it pertains to the number of projects in the pipeline. However, those projects may not be as high margin as originally expected. The margin compression would be due to rising rising material and labour costs. There is also a possibility that the labour shortages could result in excess overtime or completion date penalties on projects. I don't have excess cash to add to this one but may top up when the September dividends land in my account.

On a somewhat unrelated note Stanley Black and Decker is down well over 50% from its 52 week high. I currently hold too many positions and do not have USD to invest but it certainly looks tempting. 49 years of dividend increases and a 3% yield is much better than the historic 1.5%. Unfortunately the increases are not consistent in the amount some years double digits and other years a penny a quarter. 

The only part I don't enjoy about a down market is deciding which stock is the best bargain.


----------

