Calian Group Ltd (CGY-T)

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The balance sheet is pristine and has excess cash. Growth is expected to be moderate with improving margins. Relatively cheap compared to historic levels. Valuation is okay at 17x earnings. You would but for income not growth. Unlock Premium - Try 5i Free

(Past Top Pick Sept. 29, 2017, Up 9%) Health IT training services and managing health delivery for Canadian Armed Forces families (out of Saskatoon); also do pharmacies in Loblaws. Companies are happy to outsource these services to CGY. Offers one of the higher returns in invested capital among medium-sized stocks.

Difficult company to describe. They are in different segments. They have a Health Care Clinical Management segment, they do emergency response training and they are also in manufacturing for satellite and some other work. They brought a new CEO a few years back and he has put some good initiatives to drive growth.

See Past Picks today. This one is fairly diversified. It was a top pick previously and he still owns it and is still enthusiastic about it.

(A Past Top Pick Jul 14/16, Up 69%) A variety of aerospace businesses. There has been a big secular move as more and more countries have begun to travel. There is a lot of technology consulting coming down the pipe. We will need these tech consulting firms.

It does 145 pharmacies by Loblaw’s (L-T) and medical services for the Canadian Defence Department, as well as a satellite business out of Saskatoon. One of the most consistently profitable small-cap companies for the last 5 years. 4% dividend yield. (Analysts’ price target is $31.00.)

He used to own it a long time ago. It stalled out and he sold. It is finally getting traction again. They are trying to diversify the business. If they lose a big contract it could really impact the results. The dividend is safe. He would like to buy it much more cheaply but he would not buy at these levels.

It has a great balance sheet. They supply IT professionals to governments. It went on a tear after doing nothing for 5 years. The valuation is low and business is very stable. Treat it as an income stock. They keep buying back stock. It is not a bad little company.

(Market Call Minute.) They have done well operationally.

They have a wide variety of businesses. The biggest is in the aerospace defense business and Canada is their biggest customer. They are trying to diversify away from this.

Technology solutions into government situations. Probably some day someone will want to take them out. It is very chopping and he probably could not time it to trade it.

Ranks in the top 10% of his database. Earnings growth in the very near term is not strong. The most recent quarter, Aug 8 was 4% lower than it was a year ago. The coming quarter is supposed to be down 1% as well. 5.4% dividend.