CGI Group (A) (GIB.A.TO)

(A Top Pick Sept 13/16. Up 4%.) Was surprised this has not done better. She still likes the stock. A great growth name. They don’t pay a dividend, so are definitely interested in growing their business and reinvesting in the business, outsourcing and integration. Outsourcing is on long-term contracts which has more stable cash flow streams. Every few years, this tends to do a large acquisition to increase their geographic scope or their vertical they want to increase their presence. They are ready to do another acquisition, but haven’t been able to find anything that fits their financial discipline, so have been making a lot of smaller tuck in acquisitions. They are seeing good pickup in organic growth, particularly with the whole issues of Cyber Security and automating processes to compete with new technologies. Cyber Security is going to be an ongoing trend.

TSX Infotech sector? He would look at this and Open Text (OTEX-T). He doesn’t look at this one too much, because it doesn’t pay a dividend, but it has been a very good performer.

A company that is a little unique in Canada. A computer services company which can do your programs. There was a big fuss because they got some programs screwed up in the US. A little scary in that it is a very volatile, but the multiple is not outrageous. This is something he might consider participating in, in the future. Most of their programming is in Europe, so it is different for a Canadian company.

Canada’s largest provider of outsourcing IT services and solutions. Trades at a modest multiple on earnings of about 16 or 17 times. New management has ambitious plans to double the size of the company over the next 5-7 years. They’ve been doing small tuck in mergers and acquisitions.

(Top Pick Sep 2/16, Down 3.15%) It has great valuation and is stable. They are doing more and more tuck-in acquisitions. They are still on the hunt for the ‘big’ acquisition. It is still cheap. 18% ROE. Price momentum is starting to wane. They can grow by acquisition.

Open Text (OTEX-T) or CGI Group (GIB.A-T)? These are in different businesses. This one does not carry a dividend, and if you don’t have a requirement for that, this is a high-quality company. Both are good companies and he would have no trouble buying them here.

(A Top Pick Aug 10/16. Down 2.38%.) Has been really disappointing. Revenue growth picked up nicely and margins started to expand, outside of this one quarter, where they are starting to make some investments into the demand they are seeing. That hit margins a little. She feels the market just got a little ahead of itself. Trading at a pretty decent discount at this point.

He is looking at all the Canadian tech stocks, simply because they are down relative to the US ones. This one is reasonably valued and is a fine company. They do a nice job in their contract work and it is a stable producer.

This company benefits from the transition to the Cloud. Thinks they will benefit from a combination of acquisitions and a transition from on-premises computing to off-premises computing, which really is the Cloud. A very significant size of their business is in Europe, where a lot of companies are in the early stages of making a migration to the Cloud. (Analysts’ price target is $74.)

A great company. Technology and technology services is likely to continue to do very, very well. This company has a very large and diversified business, a lot of it in the US.

(Top Pick Apr 8/16, Up 6.35%) He likes the tech business. He likes what they have been able to do. They are a world leader. He feels very strongly about CGI. He would still buy it.

This has outsourcing with about 55% of their business. Systems integration and contracting is about 45%. The 55% is very much a reoccurring revenue stream, so is a stable stream of cash. Every few years they tend to make a large acquisition that either broadens their geography or deepens them in a vertical market. Logical was the last acquisition a few years ago that really gave them exposure in Europe. It was not a well-run company and margins were much lower. They brought them back up, and Europe is now about 55% of their business. They are ready to make another large acquisition, but are very disciplined on pricing, so are making smaller acquisitions. Organic growth is picking up. (Analysts’ price target is $74.)

Of Canadian tech stocks, this one would be right at the top. Not particularly cheap. He tends to get his tech exposure in the US, where there is more variation.

Solid stuff. Might be the best example of a Canadian company that has got itself thoroughly qualified, partly by acquisitions. In the US defence sector, aircraft companies and working for the US government. This should continue to be very, very strong globally.

Canada’s largest IT service’s provider. They do systems/integration, business process outsourcing and consulting. Has a very wide array of clients, the largest of which would be the US government, but they also cater to big multinationals and telecoms, energy, manufacturing and retailing. They are introducing more and more of their intellectual property into their clients’ solutions. They’ve also been a very good acquirer of businesses. (Analysts’ price target is $74.00.)