DH Corporation (DH.TO)

One of the companies that was able to make the transition from the old type of technology. They are now considered more like a financial services tech company. Made an acquisition using the cash they had as well as some debt. Still have a reasonable amount of debt to equity. Still thinks it has momentum behind it. Yield of 3.09%.

Going into the US you have to deal with US regulation. You have no control. They have been amazing acquirers. It is a core position of his. The yield is covered. They are getting scale. He would wait for a better time, but does not know if you will see it. Don’t wait too long.

(A Top Pick Nov 12/14. Up 16.44%.) This is really plugged into the banks and have really effectively transformed into the modern world. Pays a strong dividend of 3%.

A great play in the US. 60% revenue comes from US. Div $0.32, yield 3.24%. Bank technology business. Won't see the dividend grow much over the next couple of years. More interested in growing their business.

Thinks the acquisition of Fundtech is a transformational deal for them. It will help to position them to benefit from these industry megatrends of electronic banking. Once the thing closes, the US represents 63% of their business mix. He is modelling 24% revenue growth. They are very much invested in a good, higher growth business. Dividend yield of 3.09%.

Have done a very good job of diversifying out of their old cheque writing business. Did a big US acquisition which has generally been viewed as positive. Well-run company. Just doesn’t see a compelling reason to own it. 3.25% dividend yield.

He really likes this but is having trouble understanding their recent acquisition of Fundtech, a software design company for the financial industry. Paid a lot and raised about $1 billion. Have always been very well positioned in defensive markets, but are now getting into very highly competitive markets. When a lot of capital goes up front to pay for markets where you need a huge subscriber base, he worries. He is going to wait to see how the integration goes.

He likes it and owns it. It is a ‘fin-tech’ company. Cheques are 20% of their business still. They made acquisitions that give them a bigger presence in the US. They can continue to grow both organically or with bolt-on acquisitions. The one risk is that they are not merging the sales forces in the last acquisition, so it is something to look out for. You won’t see a lot of dividend increases because they really want to grow. They should grow quite substantially over the next little while.

Have transformed their business from a successful firm that printed cheques to a firm that does back-office Information Technology for the financial sector. Have done a series of acquisitions and have had terrific growth. Has had a big, big run, so considers it a Hold at this time. With the growth in the US, a lot of banks will want to modernize their back-office IT. He would recommend the dividend reinvestment on it.

(A Top Pick June 4/14. Up 30.36%.) This continues to be an absolutely superb long term hold. They are getting deeper into financial technology.

Company is in a beautiful uptrend, which began in 2011, and which he doesn’t see breaking yet. FMV is about 20% higher than what the stock is selling at. This is a company that is doing things and is on the move. He could see it moving higher.

Used to be a cheque writing company, and over the years they wisely diversified into other financial service areas where they run the interface between the ATMs machines and online banking systems. Very, very well-managed company. He would look in the high $30 area is a possible entry point.

(Market Call Minute.) Made a good acquisition lately.

The whole area is getting a little bit pricey, but is still cheaper than its peers. Just did another big acquisition, bigger than its last one, that is going to help drive growth, global reach and cross sell. Very well positioned to benefit from the big trend of electronic payments. He sees this growing very well over the next couple of years. About 62% of their business will come from the US. Has a $48 target on this.

The key secular theme in this market is financial technologies. Banks did not spend money for a few years as they needed to. They are behind the curve. This company took an old cheque printing business and, through acquisitions, has converted itself into a financial technologies company. Have done it very effectively, cross-border with Canada and the US. The most recent acquisition is in payment systems, and they have 8 of the 10 listed global banks as customers. Yield of 3.05%.