Core Thesis - Parsons Corporation is transitioning from a traditional engineering and infrastructure company to a defense and technology-focused business, targeting higher-margin segments with long-term growth potential [2] Financial Performance - Despite a 10% decline in Q3 2025 revenue, Parsons Corporation maintained gross profits and achieved significant margin expansion, with operating margins increasing from 1.7% to 7.7% and EBITDA margins growing to 8.2% [3] - The company's intrinsic value estimates suggest a total enterprise value of $9.2 billion, or $73.6 per share after net debt, with potential upside to $87 per share by 2026 as EBITDA expands through defense and software integration initiatives [4] Market Position and Strategy - Parsons Corporation has a strong project backlog, with a book-to-bill ratio above 1.0 for 20 consecutive quarters and a 1.4x backlog-to-revenue ratio, providing visibility into future revenue, especially as Middle East giga projects peak in 2027–2028 [4] - The company's competitive advantage lies in its specialized workforce with security clearances, long-term government relationships, and proprietary software solutions like iNET and iTwin, which create significant switching costs and recurring revenue through subscription models [3] Recent Developments - The stock price of Parsons Corporation has appreciated by approximately 8% since the previous bullish thesis coverage, reflecting the successful execution of its strategic pivot to defense and technology [5]

Core Insights - Colliers has acquired BESTECH Canada Limited to enhance its capabilities in the Canadian mining sector and strengthen its presence in Ontario [1][3] Group 1: Acquisition Details - The acquisition involves Englobe Corporation, Colliers' Canadian engineering platform, acquiring BESTECH, a multidisciplinary engineering consulting firm [1] - The terms of the transaction were not disclosed, but BESTECH's senior team will take on leadership roles and become shareholders under Colliers' partnership model [1] Group 2: Company Background - BESTECH, founded in 1995, employs over 100 professionals and provides various services including mining, automation, electrical, power systems, structural, civil, and mechanical services [2] - Colliers operates through three main platforms: Real Estate Services, Engineering, and Investment Management, with annual revenues of $5.5 billion and $108 billion in assets under management [4] Group 3: Strategic Importance - The acquisition aligns with Colliers' strategic priorities of expanding capabilities in the Canadian resources industry and enhancing its footprint in Ontario [3] - BESTECH's innovative solutions in the mining sector will augment Englobe's expertise and qualifications in a growing market [3]

Market Performance - The RAM Smid composite gained 3.58% in 4Q25, outperforming the Russell 2500 Value Total Return index which rose 3.15% [2] - Year to date, the RAM Smid composite gained 13.09% compared to 12.73% for the Russell 2500 Value Total Return index [2] - In 4Q25, both the Russell 2500 Value and Russell 2000 Value outperformed the S&P 500 and Nasdaq Composite, indicating a shift in investor focus towards small-cap stocks [3] Economic Outlook - The U.S. economy showed strength into year-end, recovering from a 0.6% GDP decline in 1Q25 to 3.8% and 4.3% in 3Q25 and 4Q25 respectively [6] - Consumer spending is expected to remain healthy in 2026, bolstered by various tax benefits and potential stimulus measures [7] - Inflation, as measured by core PCE, was 2.9% in 3Q25, and is anticipated to ease in the second half of 2026 as tariff impacts diminish [8] Federal Reserve and Interest Rates - Job growth has weakened, with non-farm payrolls down 105,000 in October and the unemployment rate rising to 4.6% [10] - If job growth remains weak, the Federal Reserve may need to cut rates further, especially if inflation driven by tariffs subsides [11] Small Cap Sector Insights - The small cap value sector is viewed as attractively valued and neglected by investors, presenting potential opportunities as large-cap stocks plateau [12] - A shift of just 1% from the S&P 500 into the Russell 2500 value index could require significant buying, indicating potential for a rapid rotation into small caps [13] Portfolio Highlights - The portfolio added three new positions in 4Q25 and maintained a focus on long-term compounding with modest turnover [14] - Mayville Engineering (MEC) was the top performer in 4Q25, rising 34.8%, while Lakeland Industries (LAKE) was the weakest performer, declining 45.31% [16][17] - Donnelley Financial Solutions (DFIN) is transitioning to a software-as-a-service model, with strong balance sheet metrics and significant free cash flow [19][20] Valuation and Future Projections - DFIN shares are considered attractively valued, trading at 10.5x 2026 EPS and 5.6x EBITDA estimates, significantly below peers [23] - A conservative price target of $66 for DFIN implies a 41.4% upside from year-end closing, with potential for further appreciation as the company stabilizes its revenue model [24] - The small and smid cap sector may benefit from moderate GDP growth, easing inflation, and potential Fed rate cuts in 2026 [26]

Group 1 - German small and mid-sized companies are outperforming large-cap DAX and pan-European Stoxx 600 indexes in 2026, indicating a shift in market dynamics [1][3] - Eight out of the top ten performing stocks in the mid-cap MDAX have more than doubled in the past 12 months, with Thyssenkrupp AG rising 235% and Renk Group AG increasing by 180% [3] - The performance of small and mid-cap stocks has improved significantly after a period of underperformance from 2021 to 2024, particularly following the pandemic and geopolitical tensions [3][4] Group 2 - The German economy is showing signs of recovery, with GDP expanding in 2025 after two years of contraction, driven by government spending on defense and infrastructure [4][5] - Increased military spending in Europe is attracting investor attention to defense stocks, while other sectors like biofuels, automotive parts, and construction are also seeing significant gains [5] - A €500 billion infrastructure spending package, along with military outlays, could lead to over €1 trillion in economic stimulus, as stated by the German Finance Minister [6] Group 3 - There is skepticism regarding the effective allocation of the anticipated funds, with concerns that some of the money may be used for budgetary needs or subsidies rather than new projects [7]

Financial Data and Key Metrics Changes - IT services revenue for Q3 2026 was $2.64 billion, reflecting a sequential growth of 1.4% in constant currency and 0.2% year-on-year in reported currency [3][10] - Operating margins improved to 17.6%, an increase of 40 basis points from Q2 and 10 basis points year-on-year, marking one of the best margin performances in recent years [10][11] - Adjusted net income for the quarter was INR 33.6 billion, with adjusted EPS at INR 3.21, representing a 3.5% sequential increase and flat year-on-year [11] Business Line Data and Key Metrics Changes - BFSI sector grew 2.6% sequentially and 0.4% year-on-year, while healthcare grew 4.2% sequentially and 1% year-on-year [12] - Consumer sector saw a sequential growth of 0.7% but a decline of 5.7% year-on-year, indicating mixed performance [12] - Technology and communication sectors grew 4.2% sequentially and 3.5% year-on-year, while EMR declined 4.9% sequentially and 5.8% year-on-year [12] Market Data and Key Metrics Changes - Americas 1 market unit grew 1.8% sequentially and 2.8% year-on-year, while Americas 2 declined 0.8% sequentially and 5.2% year-on-year [11] - Europe experienced a sequential growth of 3.3% but a year-on-year decline of 4.6% [11] - APMEA region grew 1.7% sequentially and 6.6% year-on-year, driven by strong performance in India, the Middle East, and Southeast Asia [12] Company Strategy and Development Direction - The company is positioning itself for an AI-first world, focusing on AI-led transformation across industries [2][3] - Strategic pillars include industry platforms and solutions, delivery platforms for AI adoption, and the Wipro Innovation Network to foster partnerships and innovation [5][6] - The company aims to maintain operational rigor and margin performance while integrating the Harman DTS acquisition to enhance engineering and AI capabilities [9][10] Management's Comments on Operating Environment and Future Outlook - Management noted a strong pipeline of opportunities, with AI becoming central to client strategies for modernization and efficiency [19][20] - The guidance for Q4 projects IT services revenue growth of 0-2% in constant currency, factoring in the Harman DTS acquisition and fewer working days [9][15] - Management expressed confidence in maintaining margins despite challenges from large deal ramp-ups and pricing pressures [40][41] Other Important Information - The board declared an interim dividend of INR 6 per share, with total cash distributed to shareholders exceeding $1.3 billion for the financial year [15] - The company recorded two one-off charges impacting net income: INR 302 crores for graduate expenses and INR 263 crores for restructuring [13] Q&A Session Summary Question: Insights on client spending and AI revenue - Management indicated a strong pipeline and secular growth across sectors, with AI becoming a focal point for client projects [17][19] Question: Reasons for TCV decline and outlook - Management clarified that TCV bookings were strong year-to-date, with a healthy pipeline despite quarterly fluctuations [25][26] Question: Impact of geopolitical uncertainties on client decisions - Management noted that while geopolitical uncertainties exist, they do not significantly impact client decision-making at this time [31] Question: Recruitment plans and AI skills - The company is focusing on building AI skills through partnerships with universities and plans to ramp up campus recruitment [32][34] Question: Discretionary spending outlook - Management is closely monitoring discretionary spending as clients finalize budgets, with a strong pipeline expected to drive future growth [23][24]

Core Viewpoint - Fluor (FLR) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with stock price movements, particularly due to institutional investors adjusting their valuations based on these estimates [4][6]. - For Fluor, the increase in earnings estimates and the rating upgrade suggest an improvement in the company's underlying business, likely leading to a rise in stock price [5][10]. Earnings Estimate Revisions - For the fiscal year ending December 2025, Fluor is expected to earn $2.18 per share, which remains unchanged from the previous year, but the Zacks Consensus Estimate has increased by 1% over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks which have averaged a +25% annual return since 1988 [7][9]. - Fluor's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10].

Core Insights - Fluor is well-positioned to capitalize on the growing demand for complex infrastructure projects, particularly in the AI and mining sectors, with a backlog of $28.2 billion as of September 30, 2023 [6][12] - The company has a competitive edge due to its scale and technical expertise, developed over 114 years, allowing it to handle complex projects like nuclear reactors and mining in remote areas [7] - Fluor's urban solutions segment is its largest, focusing on advanced technology facilities, including AI data centers and semiconductor plants, as well as energy solutions [2][4] Financial Performance - Approximately 82% of Fluor's backlog consists of reimbursable contracts, which provide stability against cost overruns due to inflation or unexpected delays [1][12] - The company anticipates larger project awards in late 2026 and early 2027, expecting growth to accelerate after a period of muted growth due to high interest rates and trade policy uncertainty [6][13] Market Opportunities - The surge in AI is reshaping power demand, with estimates suggesting that power demand from AI data centers in the U.S. could increase by more than 30 times by 2035 [5][6] - Fluor is focusing on the construction of massive data center campuses required by hyperscalers in the U.S., leveraging its experience from successful projects in Asia and Europe [8][9] Strategic Initiatives - The company is securing front-end engineering and design (FEED) work for critical materials like copper, lithium, and rare-earth minerals, which are essential for data center construction [10][12] - Fluor is also a major investor in NuScale Power and is the lead EPC partner for its power plants, indicating a commitment to expanding its energy solutions portfolio [10]

Core Viewpoint - Colliers International Group Inc. will release its fourth quarter and full year results for 2025 on February 13, 2026, with a conference call scheduled for the same day to discuss these results [1]. Group 1: Financial Results Announcement - The results for the fourth quarter and full year ended December 31, 2025, will be issued by press release on February 13, 2026, at approximately 7:00am ET [1]. - A conference call to review these results will take place at 11:00am ET on February 13, 2026, hosted by the Chairman & CEO and CFO [1]. Group 2: Conference Call Details - The conference call can be accessed via local and toll-free telephone numbers, with a conference ID provided [2]. - The conference call will also be available through a webcast on the company's corporate website [2]. Group 3: Company Overview - Colliers is a global diversified professional services and investment management company, operating through three platforms: Real Estate Services, Engineering, and Investment Management [3]. - The company has delivered approximately 20% compound annual returns for shareholders over the past 30 years, with $5.5 billion in annual revenues and $108 billion in assets under management [3].

Core Insights - In 2025, India's industrial and warehousing sector showed significant resilience with leasing activity reaching 36.9 million sq ft, a 16% year-on-year growth, driven mainly by large-ticket transactions from Third-Party Logistics (3PL) providers [1] Leasing Activity - Delhi NCR and Chennai were the primary contributors to growth, together accounting for 46% of annual leasing activity [2] - 3PL players held a 32% share of the total Grade A space uptake, while engineering and e-commerce segments collectively made up 35% of the year's demand [3] - Bhiwandi in Mumbai led leasing activity with approximately 4.9 million sq ft of Grade A space uptake, followed by Chakan-Talegaon in Pune and Oragadam in Chennai [3] - In Q4 2025, there was a demand of about 10.4 million sq ft, with Chennai and Pune contributing 56% of this quarterly demand [4] High-Profile Transactions - Notable transactions included Jabil Inc.'s lease of 385,000 sq ft in Pune and DHL's uptake of 380,400 sq ft in Chennai [5] - The e-commerce sector favored large fulfillment centers, with 61% of its quarterly uptake from large-scale deals, while FMCG and retail segments focused on mid-sized deals to enhance hyperlocal delivery services [5] Supply Dynamics - Developers completed 41.7 million sq ft of new space in 2025, a 15% annual increase, with Delhi NCR leading construction activity at 30% of the new supply [7] - Q4 2025 saw a peak in new space entering the market at 13 million sq ft, a 40% increase from the previous year's final quarter, while vacancy levels remained stable at around 16% [8] Market Outlook - Established hubs like Delhi NCR, Chennai, Mumbai, and Pune are expected to continue driving the market, likely accounting for 70-80% of total demand in 2026 [6][9] - The industrial and warehousing landscape in India is poised for sustained expansion, supported by a positive outlook from developers and an increase in large-scale deals [9]

Core Insights - Blue-chip stocks are essential for long-term investors, providing stability and steady dividends in a well-structured portfolio [1][2] Established Businesses - Blue-chip stocks represent established companies with dominant market positions, such as DBS Group Holdings, United Overseas Bank, Singtel, ST Engineering, and Seatrium, which are integral to Singapore's economy [3][4] Dependable Income - Blue-chip companies have a strong history of paying and increasing dividends, exemplified by Singapore Exchange Limited, which has raised its annual dividend from S$0.28 to S$0.375 per share over the past decade [5][6] Liquidity and Accessibility - Blue-chip stocks on the Singapore Exchange feature high trading volumes and lower bid-ask spreads, facilitating easy buying and selling, and providing liquidity for investors [8] Risk Management - Blue-chip stocks reduce overall portfolio volatility and act as a buffer during market downturns, making them a foundational element for a balanced investment strategy [9] Building a Core Blue-Chip Portfolio - A recommended investment strategy involves an 80/20 portfolio allocation, with 80% in blue-chip stocks and 20% in growth stocks, ensuring steady income and reduced volatility [10][11] Strong Foundation for Investing - A successful investment strategy focuses on building a strong foundation with blue-chip stocks, complemented by selective growth stocks to achieve long-term wealth compounding [12]