The Canadian investment press has never been known for its upbeat tone. And recent headlines are even more dour than usual.

Here’s a sample of several from the popular Investor’s Digest of Canada: “Obama’s Stimulus will Turn Recession into Depression”; “Except for Gold, Little to Cheer on the Horizon”; and “The bottom, stock prices aren’t there yet.” The Canadian Edge website features a link to another widely read paper, the Toronto Globe & Mail. It’s located at the end of the In Brief section and its investment headlines have had a similar tone.

Especially gloomy headlines in the popular press have been a hallmark of every major market bottom. And it’s true that we have seen a sizeable rally in CE Portfolio holdings since the overall market bottomed on March 9. That includes energy producer trusts as well.

Unfortunately, even with Canada’s leading trusts and dividend-paying corporations this cheap, only time will tell if this is a real turning point or just a bear market rally. But this batch of doom saying does tell us two things very clearly.

First, the pessimism demonstrates yet again Canada’s inherent conservatism. That’s served it well during this crisis, as generally low reliance on debt leverage has kept its banks healthy, its federal budget roughly balanced, its property market stable and companies and trusts able to execute business plans. That’s a sharp contrast with the US, and it will serve its markets very well when the global economy does cycle out of this recession.

Second, and more important, the gloom is wildly out of sync with the earnings numbers being put up by Canada’s best-run trusts and dividend-paying corporations. The expectations bar is now set very low, and well-run businesses are hurdling it with ease.

At this point, of the 18 Conservative Portfolio holdings, only Atlantic Power Corp (TSX: ATP-U, OTC: ATPWF) has yet to report fourth quarter 2008 results. Its numbers are slated to come out March 30 and will be analyzed in the April Canadian Edge, which will be emailed to you on Friday, April 3.

Amazingly, all 17 Conservative Holdings to report turned in very strong fourth quarter numbers. Not only was there no discernable drop off in profitability in the face of the worst recession in 80 years, but none of our picks reported any difficulty securing adequate credit at favorable interest rates. And those that issued guidance for 2009 forecasted continued strength and dividend security going forward as well.

This week, it was Bird Construction Income Fund’s (TSX: BDT-U, OTC: BIRDF) turn. The trust reported 11.4 percent growth in fourth quarter revenue over 2007 levels. That was somewhat below the 37.5 percent full-year growth rate. But it reflects the continued strong health of the company’s contracting business, which increased order backlog by 14 percent last year to a record CAD1.1 billion.

Meanwhile, the trust was more profitable than ever, as it increased fourth quarter earnings per unit by 28.4 percent. The acquisition of Rideau Construction has been successfully absorbed. Meanwhile, Bird has succeeded in virtually eliminating debt while doubling its working capital–a key element for winning contracts–to CAD83.5 million as of the end of 2008.

Management expects a tougher year in 2009, mainly because of an expected slowdown in construction work in the energy patch. In fact, the company suspended work on a project for oil sands giant Suncor Energy (TSX: SU, NYSE: SU) earlier this month, as the latter pulled in its horns to deal with tumbling energy prices.

Fortunately, the amount of collectible revenue left on the contract was minimal (roughly CAD20 million) and clearly not a material threat to Bird’s balance sheet or its earnings. But it does illustrate a tough environment, where new stimulus spending on infrastructure by Canada’s federal and provincial governments is likely to be offset by private sector weakness.

This is the negative business trend Bird shares overreacted to last year, when its share price fell by more than three-quarters from mid-year highs. We were able to add the trust to the Conservative Holdings virtually at its nadir in December, and it’s since rebounded roughly 80 percent from our entry point.

The question now is whether Bird shares are fairly or even over-priced, relative to the risks to the trust’s business and its ability to withstand them. Given the fourth quarter numbers, the answer appears to be the shares are still cheap, despite their recent surge.

For one thing, business still looks very good despite the slowdown. For another, Bird shares are still at half their highs of last summer, despite becoming arguably a more valuable company since then. The price-to-earnings ratio based on trailing 52-week profits is only 5 and the shares sell for roughly 30 percent of sales. Finally, every analyst covering the company on Bay Street is bullish on its prospects.

Again, I always strongly advise against overloading on a single recommendation. If you’ve bought Bird already, give yourself a pat on the back and let your position ride. On the other hand, if you haven’t yet bought Bird Construction Income Fund, it’s a solid buy up to USD20.