The Investment Reporter has singled out CGI Group for its strong earnings growth over the last several months and expectations that the company will continue to do well in the near future.
CGI Group (GIB)
from The Investment Reporter
Key stock CGI Group is earning much more and is expected to earn even more after October 1. [CGI] did well in the first nine months of fiscal 2013. Its integration of Logica, which it acquired nearly a year ago, is successful. As CGI’s earnings rise, so should its shares. When it has largely repaid the debt taken on to buy Logica, we expect CGI to start paying dividends. Meanwhile, CGI remains a buy for further full-time gains, if you have no immediate need for dividends.
CGI, with Logica, is now the fifth-largest independent information technology and business process services company in the world. ... In the nine months to June 30, CGI earned pre-tax income of $682 million, or $2.16 a share, excluding one-time items. This was up by 44% [from a year earlier.]
CGI’s revenues and earnings are rising. A nearly 38% jump in the order backlog, to $18.747 billion, means that it can continue to do well. In 2013, the company’s earnings are expected to rise by 44%, to $2.16 a share. Its earnings are expected to rise by another quarter – to $2.70 a share – in the year that starts October 1. Based on this estimate, CGI trades at a reasonable multiple of 12.4 times.
The Investment Reporter, www.adviceforinvestors.com, 416-869-1177, September 27, 2013.