Deployment of Global Business Services (GBS) into companies operations is too high in the past 10 years, 80% of global companies in the Fortune 500 are deploying GBS model into their business in one way or the other, according to published studies. Business service companies help organizations in cost cutting, increasing business effectiveness, sustainability, budgeting and planning initiatives, structuring a plan to start business in a new country and/or refining a business process and many other basic to complicated tasks.

Due to their vast experience, specialization and skilled workforce their need for organizations is increasing every year. As the competitive dynamics, strategic aggressiveness, rapid transformation and the result of unproductive organization structure and many other are forcing companies to use the services of business service companies.

In addition to the competitive and the operational issues companies are facing, there are new threats that are challenging company’s growth prospects and business sustainability. Few include, new geopolitical environment, automation and increasing volatility in revenues and earnings.

Our 5 stock picks…

To effectively overcome these challenges and to remain competitive, companies need the services of Global Business Service companies to be efficient and effective in their core business.

Expert contributors to stockchase have selected Global Business service companies that are outperforming their peers in one way or the other and have the potential to produce substantial returns, as their Top Picks. If you want to diversify your portfolio then you should add one or more the companies recommended below in to your portfolio.

IBI Group (TSX:IBG)



Colin Stewart, CEO & Portfolio Manager at JC Clark Investments Ltd, recommends IBI Group (IBG-T),

“Construction specialists, more on the architectural/engineering side. They are going to benefit from much more infrastructure spending in Canada. They also benefit from the urbanization trend, as a lot of the work they do is architectural work for condo development, transit systems for cities on a global basis. Trades at a bit of a discount to some of its peers. 15% of revenue is really in the technology business, basically software that they use to help to power and organize manage transit systems, or the HVAC system for a condominium or office building. There is a lot of data in this, and if they were to spin that out, it should garner a much higher multiple than their traditional architectural/engineering business. Insiders own about 30%. (Analysts’ price target is $9.50.).”

Morneau Shepell INc. Group (TSX:MSI)



Andy Nasr, VP & Investment Strategist at Sentry Investments, recommends Morneau Shepell Inc. (MSI-T),

“Valuation is pretty decent, and actually trades at a discount to its US peer group. It is a large player in Canada. Ultimately it should continue to benefit by growing in the US. Has a very decent free cash flow yield. Has a very predictable reoccurring revenue model that will support its earnings growth. (Analysts’ price target is $24.)”

IBI Group (TSX:WSP)



William Chin, Portfolio Manager at Caldwell Investment Management recommends WSP Global Inc. (WSP-T),

“Has gone from being a pure Canadian company to a major global player through M&A. It does infrastructure such as buildings, transportation. Got hurt a little in 2015 during the selloff in crude oil, but since then they have moved away from energy and are now focused on infrastructure. Have a very strong position in the US and parts of Europe. Dividend yield of 2.6%. (Analysts’ price target is $62.00.)”

Alphabet (NASDAQ:GOOGL)



Barry Schwartz, CIO & Portfolio Manager at Baskin Wealth Management recommends Alphabet Inc. (A) (GOOGL-Q),

“32 quarters in a raw for 20% plus revenues growth. Amazing margins. They are killing on digital ads. (Analysts’ price target is $1271.39)”

Automation, Geopolitical issues, aggressive competition are increasing the need for companies to take utilize the services of global business service companies. So, that they can concentrate on the core business activities. These market conditions present a great growth opportunity for the companies mentioned above.

Quick link to our 5 stock picks…

Business Service companies (4)

Top 7 Business Service Companies Links Refered to in this Post