SNC-Lavalin: Crisis = Opportunity

I have updated my valuation on SNC-Lavalin. This is met to be read after reading the original report: SNC-Lavalin: Engineering A Margin Of Safety

Reposted from Seeking Alpha
By Brian Langis

Seven months ago I stated my bull case for SNC-Lavalin (, OTCPK:SNCAF) in the article SNC-Lavalin: Engineering A Margin Of Safety. At the time of the writing SNC was trading at $43.8. Since the publication investors saw their stock drop to a low of $39.57 to fly back up to $49.74 with two dividends cheques. At the moment of this writing SNC is hovering around ~$46.7. Unfortunately, if you held the US version your returns have been flat because of the slide in the Canadian dollar (USD-CAD $1.02 back in June). This article does not take into consideration currency fluctuation. In 2013 SNC gained 21%, enough to outperform the S&P/TSX Index. Most of the advance came in the final weeks of the year. The article is a follow-up and assumes you read the original in-depth valuation report (If you didn’t I highly suggest it).

Why Invest in SNC-Lavalin
The purpose of article is to update you on the company and its valuation. I have raised my target price to $62 per-share, up from $58 back in June. This represents a 33% upside from the January 29th closing price.

The catalysts that will command the stock higher are a normalization of earnings, stabilization of operations, the market realization of the true value of the ICI assets, and eventually a shift in perception by the market participants from “corrupted company” to focus on long-term fundamentals. Also SNC is in a position to take advantage of continued growth for global engineering services. Click here for the full report.

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