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Gold/Mining/Energy : CGI Group (GIB.A) -

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To: Jean-Robert Grenier who wrote (798)	10/14/1998 10:45:00 AM
From: Sili Investor	Read Replies (1) of 1673

Jean-Robert: "Do not forget that Bell Sygma earnings will be in the 4 Q of CGI. How profitable was Bell Sygma before being in CGI ?" My calculations were based on including Bell Sygma earnings in the fourth quarter, as I assumed yours were too. Bell Sygma's profitability is really not the issue, the issue is what type of contract does CGI have with Bell Canada. The compnay states that it is a fair contract with rates equivalent to outsourcing contracts of similar size...whatever that means. "CGI being on NYSE will have to lower his P/E to be competitive. I believe that we could see CGI shares(CDN) around 12$ in the coming days or weeks before rising again." I don't understand why CGI would need a lower P/E now that they are on the NYSE. At the last annual meeting, CGI identified similar companies in the U.S. and demonstrated how, on average, they were trading at 3 times their revenue. I don't know what that would be now, but at 3 times revenue, CGI should be a $40 stock. I think NYSE eventually will raise CGI's P/E once everyone down there hears the CGI story. Sili

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