Enghouse Systems (ENGH.TO)

This has done well, but the stock has pulled back because of recent negative earnings surprise. However, it still ranks at 50 out of 700 stocks, being in the top 10%. PE on a trailing basis is not cheap at 35X earnings, compared to 13% earnings growth. The stock looks expensive. This typically grows by acquisition.

This is a really long term thing. There is no need to switch. He is doing well with it. Don’t overweight it, though. Stay with it.

Sold his holdings, not because there was anything wrong with the business, but the stock just got expensive in relation to its growth rate. The stock is looking pretty rich. Fundamentally it is a great company and he thinks you will still make money on the stock. This is a Hold, but if it goes lower it would be a Buy.

A software company. They had a shaving this year. It is still projected to be an $80 stock. They quickly absorb acquisitions.

How is this as a long-term (3+ years) hold? Just did a transaction which was one of the larger ones in their history. They continue to do roll ups and they see some organic growth every time they do the roll up. There is probably good growth ahead of it in the 3 year timeframe. In the short term, the one issue is valuation. Not cheap.

For a long term hold of 5+ years? In the last 2 days, this has been hitting all-time highs. This is a great company with a great return on equity. His only issue is that the valuation is pretty rich. He would want to Buy this on a pullback. This is a superb company and have executed just wonderfully.

Has done phenomenally well. Had good numbers in their last quarter. A grow by acquisition story. Not really well known or followed, but expects they will continue to do acquisitions. The multiple is a bit high, but that’s because management has delivered. If you have a 2-3 year timeframe, they will probably continue to grow their earnings to a point where even if they have some multiple contractions, the stock price would go higher.

(Market Call Minute.) Has been doing extremely well, and he thinks it is going to continue to. A very strong, underfollowed profiled company.

No debt. A small dividend, but they surprise analysts on the upside.

Very good management team. They kind of went quiet in the 2003-2008 era and then started acquiring more software companies. However, valuations are getting up there.

A very good software company. Hasn’t been adding to his holdings because the valuation is pretty much a premium brand. Pretty much trading on a low 20s PE, and raises one of the challenges for people investing in this market. A lot of the good stuff, like this, is quite expensive.

He added it to his portfolio recently. Thinks they can continue to grow buy acquisition. He is watching for them to do more deals.

This is a quiet, sort of an “under the radar” type of company in spite of the fact that it has a large $840 million market cap. Ranks #7 in his database because they basically acquire companies and know how to make money. PE of 29X. Earnings are expected to grow by 21% so the PE to growth is basically 1.4 times. Free cash flow of about 4%. If you own, consider trimming back. If you don’t own, wait for a lower price.

Likes the company, and was buying in the last day or two. The forward value is getting a little rich. Is a top 5 name of his.

This is one of his favourite stocks right now. If you have owned this for more than a couple of months, you have done well and you can continue to hold. Generates a lot of cash, has a lot of cash in the balance sheet and has been good at acquiring a lot of things.