Descartes (DSG.TO)

It is really quite a good company. There is no question about it. He always likes to see an upward trend in the return on capital, which we have. Valuation is a little rich, but when you have a high quality company it tends to be justified.

A lot of technology companies sell beyond multiples he looks at as a value investor. This one has always been an extremely good company. They are at the forefront of their technology. Longer-term they are in a very good place. Trading at 52X forward earnings. You have to grow a whole lot to justify those kinds of multiples.

This is a growth stock, and is a beneficiary of what is happening with delivery. It is a logistics company, and the more delivery there is of anything, then this company is a beneficiary. Also, it is a growth by acquisition story and interest rates are great for them. (Analysts’ price target is $36.29.)

Technology companies tend to do particularly well in the fall. This one tends to bottom out about mid-August through to the middle of January. The average gain for that period is about 25% over the past 15 years. Currently, there is not much of a breakdown, but it is trying to push below its 50-day moving average. This implies that the buying pressure is no longer there. There is short-term resistance with the 20-day coming in at around $33.

A boring name, but stable. Every portfolio needs some boring names. There wasn’t any particular catalyst this year, but it is up 30%+ in the last 12 months. He likes the recurring income stream. At the start of every quarter, they know what 90% of their sales will be, and they spend the next 90 days working on that last 10%. That predictability is what investors like. (Analysts’ price target is $25.47.)

The chart is showing a pretty darn good upward trend. He wouldn’t call it super overbought. A great looking chart. If he is right about the market taking a breather in the next month or 2, you might get an opportunity at a lower price.

The big trend is pretty good. It might be overbought at this time and if it pulled back to the trend line you could buy it.

(A Top Pick Aug 7/15. Up 24.62%.) Transportation software, speeding things along whether shipping by truck, train, boat, plane. This is not cheap, as 85% of their revenue is recurring, and people like the visibility of that. Earnings growth is forecast to be 15% for the Jan 2018 year end against a 23 PE. It should continue to do well over the next 3 years because of the high recurring revenue.

A logistics software company. They’ve made a couple of good acquisitions and are expanding into Europe. A nice little company, good balance sheet, good acquisitions, good growth and very good growth expected over 2017 to 2016. He would put this in the top 25% of Canadian tech names.

(A Top Pick Nov 24/15. Up 10.5%.) Everyone should have this in their portfolio. It is low maintenance. At the beginning of the quarter, they know what 90% of the revenues are, and spend the next 90 days getting the extra 10%. A nice play on global logistics and global growth.

Every portfolio should have some low maintenance stocks and this is one. At the beginning of every quarter they know what 90% of their quarterly revenues are going to look like, and spend the next 90 days getting the next 10%. Investors like the stability and consistently on this, as well as the long-term growth.

What he really likes is this company’s predictability. At the start of every quarter they know what 90% of the revenues are going to be for the next 90 days, so they spend the rest of the quarter getting that last 10% in. As a consequence, it trades at high valuations, but he likes the long-term story. It is a play on global trade and logistics.

(Market Call Minute.) A great company that has capitalized on the trends of monitoring and security. This is a long-term hold, despite seemingly being expensive.

(Market Call Minute.) One of the preeminent companies in Canada. They have grown over time and consistently seem to have good performance. You need to be very sensitive onto the pricing of this.

Helps companies manage their complex supply chains. A little expensive on a PE basis at 18X, but has no debt. Reasonable free cash flow. This is a reasonable entry point and he can see more upside.