Open Text (OTEX.TO)

The companies that are migrating from software licensees to cloud are the winners. They have done some great acquisitions. Trading at 9 times operating earnings. Yield 1.7%. (Analysts’ price target is $55.30)

He loves the software space. Once you hook a client to use your software, they never stop using it. This business generates a lot of cash. OTEX will generate $1 billion of operating cash flow in the next three years. They've done a great job growing EBITDA per share. OTEX is cheap consider 11x EBITDA vs. 17x among U.S. peers. Has had dividend growth for the past five years. (Analysts' price target: $55.07)

He owns this one. Fundamentally not a lot going on. For the past 1-2 years the price has not advanced substantially. It is a hold for now. He wants to see it go above $48. His reduce point is $41.

Makes software for companies to be more efficient. Has grown by acquisitions and the market is waiting for them to show how well they are doing. Does pay a dividend. Thinks there is great value here. Likes the fact that most of their earnings are coming outside Canada. (Analysts' price target $55.02)

A well-run company that has made good acquisitions, he thinks. It has consolidated in price since 2017 and there does not seem to be any urgency in the market to buy it. He would wait until it breaks above the 2018 high.

Ranks in the top 15% of his database. Its recent report was disappointing, but he expects 9% earnings growth this year. ROE is 20%. This is a long-term hold. Disciplined with a team focussed on acquisitions. A good time to buy.

He likes this company Solid from a balance sheet perspective. The ROI looks very attractive. They continue to grow and acquire good companies and integrating them very well.

He likes the name. One quarter shouldn’t shy you off. It’s been cruising along but they really missed the last quarter on many levels. He would wait and see.

Provider of Information Technology to the legal industry and other record keeping players. Very well-run company. Stable company. The growth coming from acquisitions. Good management team. (Analysts’ price target is $56.00)

(A Past Top Pick on Oct. 6, 2017, Up 12%) A great acquisition model, because they create revenue and cost synergies among their companies, and create cash flow to pay for those acquisitions. And so on. This strategy has served them well for years. Strong managers.

He likes it. It is a semblance of value in the tech space. The market was underwhelmed but it but now we are seeing some of the benefits of it. They keep tucking in acquisitions. It is a winner. It gives you some non-Canadian exposure. It could hit $60 in a couple of years.

He does not own this one. This company has been a great creator of shareholder value along its long history. People tend to criticize them for manufacturing earnings growth. He would be comfortable holding an existing position.

(A Top Pick Oct. 6/17, Up 6%) Acquisitions continue to do well. They've always slowly grow Biggest growth area is the Cloud, which they do very well. Good last quarter. It won't be exciting in the short term, but it's a fine long-term story. Only 13x forward earnings.

A software company. Largest holding at the moment for his client’s portfolios. The stock has been underperforming because large acquisition that made last year that made investors worry that they wouldn’t be able to consolidate them well. But the latest quarter showed that sales and margins are better than expected. Yield of 1.4% (Analysts’ price target is $54.59)

Technology fades away a little at this time of year. Last year at this time of year it was fairly flat overall. It has been in a trading range and he would wait for it to pull back down before entering. There are other companies that represent better opportunities.