Computer Modelling Group Ltd (CMG.TO)

Great Canadian name. Reservoir simulation software. Good, long-term growth story. A bit cyclical because geared to the energy complex. Pick it up in thirds here, at $9 level, and around $8.

Chart looks really good technically, recently broken out of its downtrend. Reaccelerating. Testing highs of 2020, and even those of 2018. Stock looks really powerful. 

They recently had a joint venture with Baker-Hughes (BHGE-N), where Baker Hughes is co-marketing one of their products. It would make sense for Baker Hughes to take over this company. Schlumberger (SLB-N) is the only company with a competing product. (Analysts’ price target is $9.50.)

(Market Call Minute.) An industry leader. It does something that nobody else does, and you have to take these opportunities when they come.

(Market Call Minute.) Was involved with this in the past. If you have patience, stick with it.

They provide software that simulates both the field and production in oil/gas fields. Took a hit along with the energy related names, but it kind of bottomed out around November when people realized it was a very resilient company with about 97% of their revenues recurring. Recently added to his position. A great long-term hold. Dividend yield of just under 3%.

Great company. They have software for modelling reservoirs, including heavy oil and offshore oil. They work with some very large oil/gas companies. Fantastic margins. They pay a dividend as well as special dividends. Clean and pristine balance sheet. Trading at about 20X forward earnings. He would like it to come back about 5%-7% and would then get back into the name.

Energy services company. Optimize wells to get the best out of them. They have wonderful intellectual materials. They might even get swallowed up.

Provides software that helps companies to model very sophisticated oil/gas fields and helps with the extraction. Previously had been exclusively focused on oil, but have branched out to gas. Very attractive long-term play. Nice yield. They are just on the cusp of developing new software that will be rolling out in the next couple of quarters. Attractive at these levels. A lower risk, lower volatility way to play oil and gas.

Long-term chart shows that it is just recently breaking a long-term upward trend line. You do not want to buy into a story that is breaking a trendline.

ROE is 54%, which is huge. A free cash flow generator, and does really well, but not sure what a fair value would be for it. PE on a trailing basis is 39X, and on a forecast basis is 36X. Earnings growth is a very modest 6%. Looks to be fully valued. Thinks there are other stocks that will perform better over the next 12 months.

(Market Call Minute.) Outstanding company but is way overvalued

Basically an international computer software and consulting company that is able to simulate the reservoirs for oil/gas companies giving precise locations for drilling. Has grown about 20% per year in the past and he is expecting 12%-15% growth. Yield of 2.94%.

(Market Call Minute.) Terrific company but expensive. Take a look at Pulse Seismic (PSD-T) instead, which would be an interesting switch.