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Bird Construction Income Fund isn't having a good day. The units plunged more than 12 per cent on Tuesday, a day after the company reported disappointing third quarter results. For an investment that was once tapped as a good infrastructure play, the units are now looking as though they have been resting on a fault line.

While the consensus of analysts had been expecting Bird Construction to report earnings of $1.03 per unit, actual earnings came in at just 61 cents. Benoit Caron, an analyst at National Bank Financial, pointed out that the giant miss was due to two factors: Low-margin work secured over the past 18 months is now being delivered, and there is a big shift from late-stage to early-stage contracts.

He cut his price target on the units to $37.50 from $42.50, but still gives Bird Construction an "outperform" recommendation. His bullish reasoning: The company's backlog of institutional projects is growing briskly this year, the balance sheet is in pristine condition (with $208-million in cash, or $14.78 a share) and the dividend (now yielding 5.5 per cent after Tuesday's selloff) is safe.

"The average Street reaction has been to downgrade the stock and to lower the target to the low $30s," Mr. Caron said in a note. "We believe this typical panic reaction is a huge mistake and that Bird should be bought down here. This selloff is a great buying opportunity."

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