Trying to determine which companies are in the favour of the Canadian government and will receive bail outs or handouts resulting in hundreds of millions of taxpayer dollars being thrown into what turns out to be a perpetual black hole, or which firms will have the government completely turn their back on them and the shareholders who have invested in them over the years, is a very difficult thing to do.
The idea that the Trudeau government picks favorites among which companies it stands up to defend against the capitalist bullies of the world is truly something to watch.
In recent news, investors who put their faith in the ability of the Trudeau government to begin to truly welcome investment from countries such as China in Canada were sorely disappointed following the announcement that Aecon Group Inc.’s (TSX:ARE) proposed merger with Chinese firm China Communications Construction Co. (CCCC) was cancelled due to an investigation by the Federal government into whether the $1.5-billion deal could potentially impact national security.
While the Trudeau government may have deemed the deal to be insignificant on a political basis, providing the country’s leadership with a "strong on security" stance with little to no political backlash, investors are now left wondering whether the current share price is simply too low given its fundamentals and new valuation absent a takeover bid on the table.
Given the fact that Aecon has given up all of its post-acquisition announcement gains, I will be taking a much harder look at this company in the days and weeks to come.
Invest wisely, my friends.
