Garda World Security Corp. (GW.TO)

Security Company. He is negative on this and has a small Short on it and will probably look to increase his Short position. Significant amount of debt. Some of their businesses in Iraq, Afghanistan, etc are winding down. You could easily see a 50% haircut in the type of market he is expecting.

Refinanced the bulk of their bank debt but haven’t paid it down so the debt load is still heavy at a little over 5X current EBITDA. Very low margin business. Had a weak earnings report. He is Short this stock.

Was in the penalty box. Had got itself pretty levered and there were concerns about growth. Rapidly getting out of the penalty box now by looking after its debt. At the top of his Watch list right now.

Top Short A classic and successful “growth through acquisition” over past decade. Now at about 5X debt to EBITDA, a level where he doesn't think banks will fund any more funds for growth. Competitive business and margin for error is very small. (Short is roughly at $9.)

Security business. A little bit cautious on this one. Company has been successful in growing aggressively, primarily by acquisition. Levered up the balance sheet to grow the business and he is very cautious on businesses with high debt to EBITDA.

Leading security provider. A disaster over the last 12 months. Growth by acquisition story. Have been worries about their ability to manage growth. Recent pop indicates a good quarter. On his radar screen. If they can integrate their acquisitions, they’ll have a very steady growth in earnings. Hopes management doesn’t make other acquisitions until they have settled down.

(A Top Pick Mar 7/06. Down 8.9%.) Have done a great job of consolidating a very fragmented industry. Should do well this year.

The easy money has been made. Likes the company and its cash flow. A growth by acquisition story. Have a competitive advantage.

This stock hit its 52 week high today. Garda World Security is a great growth story through consolidation in Canada. Involved in cash handling, security, airport security and background investigation checks. Doubled its revenue over the last couple of years. Managment would like to double its size through acquisitions. He has owned for quite some time, average entry price was about $7-8.00. He is continueing to sell it on the way up just through appreciation, maintaining his weighting.

If he were to pick a fairly junior company that is on the expansion trail, this would be about the most solid. The demand can only increase. They seem to manage their operations very well as well as acquiring them.

Ranks in the top 5% of his database. Estimates have popped up by 23% in the last 90 days. Year over year earnings growth is up 50%. For year-end Jan/07, earnings are expected to grow from $0.50 to $0.74 against a 19 P/E.