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

An outstanding story. Their ROE has not fallen below 20% in the last 5-6 years. Trades on a forward multiple of about 9 or 10 times earnings. For an investor with large-cap, liquid, blue chip stocks, he doesn’t know if he could think of a better name that has both growth characteristics and valuation.

There were accounting issues for a while, then the European acquisition where they took a lot of write downs. Well managed. Watch the lack of organic growth.

One of the largest technology companies in Canada. Have done a phenomenal job of growing earnings at about 20% per year over the last 5 years. Stock is trading at only 13X earnings. Company is really focused and disciplined on that earnings growth, so much so that they are not even going to get bonuses this year, because they haven’t met their targets. The Logica acquisition is going really well and there could be more synergies there. There also could be more acquisitions going forward, which will drive the share price and the growth.

Not expensive. Trading at around 12 or 13 times earnings. The Logica acquisitions they did in Europe a couple of years ago is pretty well integrated now, and the company now is on the lookout for additional acquisitions in order to expand geographically as well as vertically. They do not pay a dividend, but would rather buy back stocks or make acquisitions.

Technology sector tends to do well from October all the way through to January, at the time of the Consumer Electronic Show. We are already within the period of seasonal strength for this company. Seasonal stats from the start of December all the way through to about February 8, just before it reports earnings, and it tends to do quite well. 76% of the time it has been positive with an average return of about 14.4%. The trend is certainly positive on this.

If looking for inexpensive growth, this company has grown at a 20% per annum level for the last 5 years. The reason you want to own this for next year is, when you look at the large cap growth companies in Canada, this is the only one that is trading at 10X earnings, a really, really low multiple. Secondly, it is highly likely they will do a big acquisition which will be accretive, and the stock would likely pop after that. Thinks 2015 is going to be a good year for this company.

(A Top Pick Feb 11/14. Up 19.46%.) Got held back a little bit earlier this year on the Obama Care website fiasco, which really didn't impact their business at all, but was more of a sentiment thing. The underlying business is developing pretty much exactly the way he had hoped and expected. Margins and cash flow are proving to be better than people had thought. Also, thinks we are just a year away from the next good acquisition.

(A Top Pick Oct 9/13. Up 11.02%.) These 3 picks were large cap liquid stocks that hopefully would not give you a surprise. A very solid company. They typically acquire very large positions in companies about every 3 years. Very disciplined approach. Thinks there are still good opportunity. Ranks well in his Quant model.

The long-term on this company is that every year it has 20% ROE. Trades at 9.9X 2015 earnings. Well-managed and throws off a lot of cash flow. They buy back their stock. He is pretty comfortable that it will be 20% higher. It should be $8 higher in year’s time.

A great company to own and one of the larger tech companies in Canada. Well-run. The most exciting thing is their ability to do deals. Healthcare has held the stock back a little bit, but he wouldn’t be concerned as it is all short-term noise.

(A Top Pick Sept 10/13. Up 15.63%.) Doesn’t pay a dividend, so it is really for a more growth oriented investor. Have had a really good track record of making acquisitions.

(A Top Pick July 17/13. Down 3.64%.) The longer term trend line is very much in place and the fundamentals are getting better. Still a good holding. The Shorts are going to have to start covering.

(A Top Pick July 18/13. Up 25.26%.) A decent growth story. Their last acquisition made a lot of sense driving margins higher.

Service companies have been consolidating over the last little while. Would prefer to buy it as it traded through $40 heading higher. He likes software. They are cash flow generators and have strong dividend increases. He would not chase it here.

On the short term, it is starting to show a bit of an upswing. The long term chart shows a long-term upward trend is in place. Thinks the stock is going to continue on its merry way, because they just keep landing contracts and the trend is in place. A great story.