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

This is a great consolidator of the businesses and the areas that it works in, including healthcare and government. One of the big, big success stories of the Canadian market over the last 10 years. Growth by acquisition and is probably due for another.

They are hoping on an acquisition. They want to bring in margins and raise the margins of their acquirer. He expects it to happen in the next 6 months. You might have to wait for a catalyst.

A good example of a company that has all the metrics going for it. They missed their earnings recently, but not by much. 20% ROE. About 17 times PE. He would continue to hold it.

Was down today because of rumours circulating that the company would be interested in Computer Sciences (CSC-N). He understands that management had never been interested in those assets, so this is probably an opportunity. He is watching this closely and may get into this again.

(A Top Pick May 29/14. Up 48.53%.) Still likes this. It will probably go to about $67. He would be a Buyer on any weakness.

An IT services company. About 54% is outsourcing, kind of long-term contracts with recurring revenue streams. The balance is systems integration. A somewhat mature business, but very well-managed. Their last acquisition was in 2012 and was in Europe, so now Europe accounts for over 50% of their business. All the integration and synergy targets have come through. They are now looking to do another acquisition.

CGI Group (GIB.A-T) or Open Text(OTC-T)? Although he owns both, there is no question that he would choose this one. Open Text trades at around 12X 2015 earnings. For a quality growth company, he really feels that valuation is tough to beat. Also, this has been paying down its debt quite readily, so they are primed for an acquisition. If you are looking for a game changing acquisition, it is more likely to come with this company. It is cheaper and has a very nice ROE profile.

Pretty reasonably priced. Has done very, very well. Good company. Operating globally. If you see this piercing the 200 day moving average, it may be time to lighten up a little.

The GMP analyst is still recommending it. If you have a low cost base in it, then stick with it and possibly have a trailing stop. There is something left in it according to the analyst, but we are getting long in the tooth in this one.

This has been a stellar performer at times. A few times it hit around $51, and is now below that. That brings in the next level where we are going to see some support, which is around $45. The Point and Figure target is around $44-$45. To him it doesn’t look like it is going to run away. If you get this at around the mid-$40, it is probably a good idea. If not you’re going to have to wait until above $58.

Had a very good run. An acquisition strategy. You have to be leery about the true organic growth. There were some account issues. But they seem to have overcome the skeptics. It is expensive at these levels. You have to see where future growth is going to come from.

This is in the services business. They get contracted to manage IT services for corporations and government bodies. Have a history of making very good acquisitions. A Canadian company, but with big US exposure. Also, have a very stable business in their government related operation in the US.

(A Top Pick April 1/14. Up 66.79%.) This is getting up there in terms of valuations. It used to trade at a big discount to its peers, but is now trading in line with them. They are in a position to make another acquisition, so that is the next leg.

Outlook is pretty good. There is a lack of true organic growth, you might see it as a 3%-4% grower. However, they are excellent at harvesting free cash flow. Thinks that after the last acquisition in Europe, they are ready to do another, which is why the stock is running hard.

(Top Pick Feb 11/14, Up 55.62%) They can certainly afford to do another deal. They de-levered from the debt they took on when they did the European acquisition. It is a top 5 holding for him.