Open Text (OTEX.TO)

(Top Pick Feb 1/13, Up 82.89%) The multiple got revised higher. It was growth by acquisition, but now the market thinks they have a good migration strategy into the cloud. A good story and they are delivering. 11 times earnings is reasonable, but they are at 16 times now. As they migrate into the cloud the multiple should increase, but he took some money off the table for a while. It is a show me stock now.

(A Top Pick Feb 1/13. Up 91.73%.) Had a great move and is probably still a good, long term story. Growing by acquisition. New management is in place.

This is one of his favourites. Closed at $96.50 and he has a model price of $116, a 20% upside. A good investment.

Very good stock. Sold his holdings too soon, because of the lack of organic growth in their last quarter. Normally he doesn’t put a lot of value in growth by acquisition, however in this environment of low interest rates, growth by acquisition stories have worked and probably will work for a while. With their last acquisition, you are going to see EPS growth very nicely. A weaker Cdn$ is good for this company. They have R&D and head office costs in Cdn$ while their revenues are about 95% US and Euro $’s.

Grows 20% year after year after year. Terrific company. His third largest position.

When they made their recent acquisition, it really jumped up on his radar as a pretty good value creation. An accretive deal. Valuation discount versus its peers is quite substantial. This, coupled with their new Red Oxygen product that they are coming out with has a lot of different modules for the products that they have, should do quite well for them in the next 2 years. Trading in the range of 14-15 times next year’s earnings. Peers are in the range of 19 or 20 times. Yield of 1.4%.

One of the largest software companies in Canada. Growing over 25% a year for 5 years. Ramping up sales force, M&A team has been built up. Well followed by Bay Street. Earning are coming in close to as expected.

Likes this. A little bit on the unglamorous side right now because there is not a ton of organic growth but ROE is high. Building a cash base from which they can do further acquisitions. With all their return on capital, there is going to be one of 2 or 3 things that are going to happen. They will do an acquisition, buy back stocks or raise their dividends.

Delivering on all their platforms. Migrating towards the cloud-based services as well. Have done acquisitions in the past couple of years. Trading around 10X the current earnings. Has global exposure. Substantial free cash flow. P/E ratio is about 10X.

Has quite an interesting looking chart. It shows a bit of a consolidation between May and August with an aggressive bottom forming at the end of August and is now coming back to the resistance level. In the short term, there’s a possibility of a return to the low $50. Wait to see if it can bounce off of that.

Have just changed CEOs so there is a bit of integration going on. Still about 40% exposed to Europe, which weighs on the stock on an ongoing basis. Have a lot of revenue drivers going forward. In an area called Enterprise Content Management and have done a good job here.Have just changed CEOs so there is a bit of integration going on. Still about 40% exposed to Europe, which weighs on the stock on an ongoing basis. Have a lot of revenue drivers going forward. In an area called Enterprise Content Management and have done a good job here.

This is a truly great company. Largest independent left in management solutions space. In its acquisition trail, it created a lot of decentralized companies that managed themselves individually.