CGI Group founder and chairman Serge Godin, left, and chief executive Michael Roach get set to start of the company's annual meeting Wednesday, February 1, 2012 in Montreal.The Canadian Press
Validea's pick of the week provides a detailed report on a company that scores well in the stock-screening service's model portfolios. On Validea.ca, investors can analyze 1,000 Canadian stocks through 12 different guru-based models and get individual reports on each company. Globe Investor provides marketing and data services to Validea.ca and receives compensation. Try it.
Montreal-based CGI Group Inc. provides end-to-end IT and business process services to clients across the globe. It has a market cal of $11-billion (U.S.)
The company gets strong interest from the Peter Lynch-based model, which considers it a "fast-grower" -- Lynch's favorite type of investment -- thanks to its impressive 21 per cent long-term EPS growth rate. (using an average of the three-, four-, and five-year EPS growth rates).
Its 16.6 price/earnings ratio and that long-term growth rate make for a PE-to-Growth ratio of 0.8, which Lynch model likes.
It has grown sales at a 29-per-cent pace over long-term, (using an average of the 3-, 4-, and 5-year sales growth rates).
The Warren Buffett-based model likes its 19.6-per-cent return on retained earnings over the past decade.
CGI has an 18-per-cent return on equity (12 month) vs. -3 per cent industry average.
It has a 36-per-cent return on debt/equity ratio vs. 71-per-cent industry average, which the Martin Zweig-based growth model likes.
It also has a stellar 203 per cent return on capital (EBIT/total capital employed) and 9.4 per cent earnings yield (EBIT/enterprise value), earning it strong interest from the Joel Greenblatt-based model.
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