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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: I read this morning that CGI was able to generate 1.1 billion of cash flow, surprising analysts positively. They reduced their debt by 500 million. Earnings per share met expectations. Valuation is at 16.5x trailing earnings. Now that the debt and cash flow concerns are gone, it seems to be the perfect time to buy. What do you think about earnings?
Read Answer Asked by Matt on July 30, 2014
Q: 5i team:
The wife and I both hold CGI Group (GIB.A) : ~ 20% each
in our TFSA's. We are each up ~ 17% from purchase.
Our approach for our TFSA's is to hold growth Co's.
CGI seems to be lagging lately. Would you recommend we :
1- continue to hold; 2- reduce the % held;
3- or take our profits and look for something to replace.
If 3, could you make a few suggestions.
Thanks,
we greatly appreciate your service.
Read Answer Asked by Terrance on June 24, 2014
Q: GIB.A - In September you indicated you were completing a report on CGI and about a month ago you indicated you have held off on the report for a long time. What is the reason for holding off on issuing a report for so long? Would it indicate you are concerned about the future/direction of the company or is that part of your normal process?

Also, you mentioned yesterday that:
"Inter Pipe and Pembina Pipeline hold similar valuations with IPL looking a bit cheaper. Earnings in 2014 are expected to decline for PPL but remain stable for IPL so we would lean toward IPL due to the stability."
Are those GAAP earnings or cash earnings? Would that warrant a switch from PPL to IPL given that decreasing earnings usually isn't a good thing?

Thank you in advance for your reply.

Read Answer Asked by Christopher on February 25, 2014
Q: About CGI group or GIB-A
I am considering buying some GIB-A. I'm not too concerned about the Obamacare controversy, but do keep coming across critical comments on their accounting practises. Do you feel this is a red flag issue?
Can you give me a couple of suggestions for Canadian high tech companies in the same general area as CGI?

Thanks.
Read Answer Asked by Jim on February 11, 2014
Q: With respect to the Obama care fiasco, it would seem CGI (GIB.A) was not provided with reasonable time to implement and try the system. Of course, CGI could hardly come forward and contradict the US and its president on the matter. This makes for a rather uneasy context, and the reflection on the company's abilities may not be fair. And the alternative to CGI (ACCENTURE) is not exactly impeccable. The dust has not settled yet.
Read Answer Asked by Serge on January 13, 2014
Q: Having the health care contract terminated by the US Government is definitely bad optics for CGI Group, GIB.A, and I know this one contract is not a meaningful size for them, but how does this affect future govt contracts Canadian and US, which I believe are a significant portion of their annual revenue? Also unnamed sources say "that CGI has not been effective enough in fixing the problems with HealthCare.gov", so in view of their high profile of this issue over many weeks and inability to solve it, could this be a cockroach we see with many others we don't as yet? Thanks, J.
Read Answer Asked by Jeff on January 12, 2014
Q: I have owned CGI Group for a long time and I am becoming concerned about the rumours of their accounting and reliablity of their stated earnings. It has been questioned by Veritas,and Deutsche Bank analysts lately and I noticed the Caisse sold a large block last week. Would you endorse a switch from CGI to Constellation Software or Enghouse?
Read Answer Asked by Todd on December 01, 2013
Q: GIB.A, I know you like this company highly. My research shows: huge debt.,very low ROE,121% > MRQ in revenue but -71% in EPS & no dividend. It went down a bit on the Obomacare problem-I hoping a bigger collapse but his starting to rebound. What am I missing in my analysis-oh trading at a huge premium to EPS-in other words very expensive. Make me feel better about this one so I can pull the trigger.
Read Answer Asked by James on November 12, 2013
Q: I have only owned GIB for a few months and am not unhappy with it. However, you keep speaking glowingly of SYZ (and it pays a dividend, which is always nice) Would you consider it overlap to own both companies and if so, would you sell GIB to buy SYZ? I am generally a patient investor with a long time frame.

Thanks for your great service!
Read Answer Asked by Paul on November 11, 2013
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