Descartes (DSG.TO)

(A Top Pick Aug 7/15. Up 24.62%.) Transportation software, speeding things along whether shipping by truck, train, boat, plane. This is not cheap, as 85% of their revenue is recurring, and people like the visibility of that. Earnings growth is forecast to be 15% for the Jan 2018 year end against a 23 PE. It should continue to do well over the next 3 years because of the high recurring revenue.

A logistics software company. They’ve made a couple of good acquisitions and are expanding into Europe. A nice little company, good balance sheet, good acquisitions, good growth and very good growth expected over 2017 to 2016. He would put this in the top 25% of Canadian tech names.

(A Top Pick Nov 24/15. Up 10.5%.) Everyone should have this in their portfolio. It is low maintenance. At the beginning of the quarter, they know what 90% of the revenues are, and spend the next 90 days getting the extra 10%. A nice play on global logistics and global growth.

Every portfolio should have some low maintenance stocks and this is one. At the beginning of every quarter they know what 90% of their quarterly revenues are going to look like, and spend the next 90 days getting the next 10%. Investors like the stability and consistently on this, as well as the long-term growth.

What he really likes is this company’s predictability. At the start of every quarter they know what 90% of the revenues are going to be for the next 90 days, so they spend the rest of the quarter getting that last 10% in. As a consequence, it trades at high valuations, but he likes the long-term story. It is a play on global trade and logistics.

(Market Call Minute.) A great company that has capitalized on the trends of monitoring and security. This is a long-term hold, despite seemingly being expensive.

(Market Call Minute.) One of the preeminent companies in Canada. They have grown over time and consistently seem to have good performance. You need to be very sensitive onto the pricing of this.

Helps companies manage their complex supply chains. A little expensive on a PE basis at 18X, but has no debt. Reasonable free cash flow. This is a reasonable entry point and he can see more upside.

Has been a good company for the last 10 years, but their ROE is only about 12%-13%. He typically focuses on companies that have ROE’s of 22%-23%. This has the potential to have their ROE creep up, but to some extent the company is over capitalized. It has too much equity in relation to its profitability. Thinks it can do better.

Essentially a logistics provider to improve the efficiencies of businesses. A very predictable, very steady business. At the beginning of every quarter they know about 90% of what their sales are going to be, so they spend the next 90 days getting that last 10% of that business. Likes the predictability.

Logistic software company and they want to do everything with anything to do with logistics. The company has been kind of quiet and sitting on $100 million in cash. In July of this year they did 2 fairly significant acquisitions. One has a kind of Homeland Safety kind of angle. There are certain people and companies that you cannot deliver to for logistic reasons, so they bought a company that controls that process to make sure you don’t deliver to the wrong people. That has been a very, very good kick starter to their business, and investors are starting to appreciate what they have done with their cash. It now has very, very good momentum. The stock is quite expensive on an earnings valuation basis, but if you look at consensus forecasts, earnings are almost expected to triple over the next 18 months. 43% of their revenue comes from the US.

(A Top Pick Nov 10/14. Up 33.41%.) This does well because it has about 85% recurring revenue. ROA is 8.6%. Extremely low volatile kind of stock. If you own, it is perhaps time to take some money off the table, because it is trading at the top of a valuation band.

Basically a cloud-based network to improve productivity, performance and security for transportation/logistic companies. Government regulations work in their favour because on transportation of goods, the receiving country wants to know what’s in it before it gets even close to the border. Have been growing organically as well as by acquisitions. Their 4^th quarter free cash flow yield is 3.3%. The 12% forecasted ROE looks attractive. Earnings are forecast to grow about 15%. Trading at 25X Enterprise Value to the February 2017 fiscal year-end earnings estimates of $1.07.

A low maintenance stock. Every portfolio should have a couple of these names in them. On the 1^st day of a quarter, they know with 90% certainty what 90% of their earnings are going to be. They spend the next 90 days determining that last 10%. Because of this, their quarterly events tend to be a non-event, which from his perspective is great, because he loves avoiding surprises. This stock grows about 15% annually. They do a lot of small tuck-in acquisitions. A nice play on global logistics and global trade, as well as increasing security. They help to smooth the customs duties path for cargo. Buy on the dips and hold it for the long run.

Sees continued growth in this. Have good order systems for delivering products on time. This is a continued earnings growth story. Well positioned for the focus on logistics. Lots of organic revenue growth potential.