Open Text (OTEX.TO)

There are few pure tech plays that you can have in Canada. This will be a core position in that area. Their story has really been about acquisitions. Thinks the market has not recognized that they do a really good job of recurring revenues, 70% of their business. They’ve made a commitment to double their earnings per share by 2020, and he thinks the current management will do that. (Analysts’ price target is $39.50.)

They did a big acquisition recently. Generally this would concern them, but they have been doing acquisitions for about 20 years. Their record of integrating them is phenomenal. He has no concerns about this company. They can pay down the debt quite quickly. It is one of his favourite large cap software companies.

One of the stories he still really likes. It has done really well lately and is trading at the high end of the range. A software company that has single digit organic growth sort of, not great, but alright. But they’ve always been able to augment that with acquisitions because of the free cash flow they generate. They roll in an acquisition, cut the costs, and continue to grow. You can only do that for so long, but these guys have continually been able to do that. Very strong management. The only issue is that growth will probably hit a wall at some point. The EMC deal is going to give them more earnings growth for the next couple of years. Did a financing, so it is all paid for. Still a good story.

(A Top Pick Jan 15/16. Up 28.69%.) There is a split coming here at the end of this month. One of his favourite software companies. It is very cheap in terms of valuation. Pays a dividend. Makes great acquisitions. They are really hitting it out of the park in terms of facilitating compliance across multi-industries.

(Top Pick Feb12/16, Up 29.45%) Don’t buy now, but it has become less cheap than when he first bought it. PE is now 26%. The top could be defined by price momentum, he exited very recently. You could buy on weakness now.

(A Top Pick Nov 26/15. Up 33.8%.) It broke out above its $76 range, and then came back and tested it a couple of times. He expects it to get above $88. His target is $91. This is still one of his top technology picks. Thinks it could end up being acquired at some point.

(Market Call Minute.) A very strong company.

(Market Call Minute.) Has owned this since their earnings miss a year ago. Strong on all 3 metrics, valuation, momentum and volatility. Good growth in acquisitions.

(A Top Pick Aug 10/15. Up 36.86%.) This continues to do what it has always done. They layer in the acquisitions. They are great on the software. Have a lot of excess cash flow, and use it for acquisitions. Valuation is not that high.

(A Top Pick Aug 10/15. Up 35.9%.) They have done what they have always done. A good suite of products and they continue to add and make acquisitions. Have done a good job of moving to cloud based services.

(A Top Pick Aug 10/15. Up 29.57%.) Just announced an acquisition of Customers Communications Management assets from Hewlett-Packard. They continue to do this combination of growing organically as well as adding acquisitions of product portfolios. A strategy that has worked for them for a long time.

One of the few tech stocks he owns, and it has been working well for him. This company grows mostly by making small acquisitions. He likes the company and management, and is still buying for new clients.

Recently added this to his model portfolio. Shifted some weight from some of the US tech stocks back to Canada.

Not a name he has spent a lot of time looking at. He tends to focus on mid-cap’s. However, there is a scarcity value in Canada for Tech stocks that have sales of over $1 billion, and this is one of them. It is always a potential take out candidate.

Trading at less than 3X Price to Book. Looks attractive on a P/E basis and has great free cash flow value to enterprise value. Likes in the short term, but wouldn’t treat this as a hold for 5 – 10 years.