CAE Inc (CAE.TO)

Last year they made an acquisition and spent a year integrating it while their margins were suffering. Finally last year, the margins started looking better and she thinks they will be good for the next little while. We are in the middle of the cycle where there are lots of new planes being sold, which is always good for them. They are the leader in simulators.

Likes it and follows it. Winning lots of new contracts on the simulator. Would like to see a pullback and then would buy.

An over-looked aerospace play currently trying to break to all-time highs above price peaks spanning 15 years. CAE provides modeling, simulation and training for civil aviation and defense.

Started buying Q4 last year. It is a play on the global airline business. Tremendous growth, especially in Asia. Interesting growth profile looking out 3 years with revenue growth and margin expansion. He would buy more on a pullback for a 3 year hold.

(Market Call Minute.) Thinks it is probably going to be a couple of good years for this company. Business is improving and they are getting the contracts. The backlog is there.

(A Top Pick Nov 29/12. Up 32.87%.) Investment thesis is that the world needs more planes which is in a very strong cycle. They are the leaders in simulator training. Suffered lately because of pullbacks in military spending, especially in the US, but they are a more cost-effective way of training and people are starting to realize that. Also, acquired the world’s largest global pilot training business. Can see a secular tailwind to this. Fastest-growing airlines are the Asian ones, which have an outsourcing pilot training model. Dividend yield of 1.93%.

Chart is showing an upward trend and the stock is slightly outperforming the Canadian market. Technically it looks pretty interesting at these levels. Historically, this stock has a period of seasonality going into the summer and goes up with most of the aerospace stocks. This is a winner, so stick with it.

Likes this business. This has a military and flight simulator component. Good technology and a leader in it. Margins have been dampened by softness in the military side. The flight simulator site is growing very well. Haven’t participated all that well yet, in the aerospace cycle and he would expect them to participate going forward. If it doesn’t happen over the next 6 months, it will happen within the year. Will probably be $20 stock at some point.

(A top pick Oct 1/13. Up 1.03%. Up 8.5%.) Chart showed a big long consolidation and he waited for the breakout at about $11. The minimum target on this is $13.

(A Top Pick October 22/12. Up 10.41%.) Likes this kind of exposure to the growth in airlines. They have both the military and the commercial side. Extremely well managed.

(Market Call Minute) Long term buy. A business where they dominate the field. Represents a source of foreign exposure to a Canadian company.

They are selling into two difficult areas, military where there will be budget cuts and also airlines which have their problems from time to time. In a rough patch right now and probably a bit pricey at the moment.

Has always been a conundrum for him. A Canadian technology company, which is the best in the world at what they do. The #1 seller of flight simulators globally, and have been for decades. Yet they have never been able to deliver a lot of margin on that business. It has now been morphed into a pilot training business. They are also using their simulation technology for military and, lately for medical. Have struggled to generate good profits margins.

Doesn’t expect anything to happen immediately on the stock but chart shows a long-term consolidation. Has been going sideways from the middle of 2011 and all of a sudden it broke out. It is forming a bit of a descending triangle and he feels that sooner or later it will break that. He sees $13 on this one.

Loves the company. A Canadian company with a global footprint. Have training centers all over the world. Made an acquisition and have been redeploying simulators between different sectors which have caused a problem in earnings last year. Don’t seem to ever be able to translate their success to the bottom line. She would go with Mac Donald Dettwiler (MDA-T) instead.