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Gold/Mining/Energy : Newsys Solutions Inc A. NSS
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To: m.max who wrote (40)2/13/1999 12:39:00 AM
From: BM  Read Replies (1) of 111
 
Newsys - CGI Group joint venture

Had a very interesting chat with a friend who told me that CGI won the contract to provide consulting services to a large government department here in Ottawa.

While this is excellent news for CGI, one of the interesting aspects of the bid was that it was a combined CGI-Newsys bid that won. What it means is that anyone within the department needing external IT/IS services must turn to CGI first. If CGI doesn't have the resources available, CGI then asks Newsys to supply.

If *this* is what Newsys' release means by joint ventures, this could lead to some pretty substantial revenues for Newsys going forward. As the chronic shortage of IS/IT specialists in the Ottawa market keeps getting worse, Newsys can now continue to win contracts on its own *plus* ride the coat-tails of the premier Canadian IT firm. Not too shabby!

On second thought, characterizing Newsys as riding CGI's coat-tails may not be entirely fair. If CGI (market cap $4.5 billion) choses to JV with Newsys (market cap $12 million), Newsys must have something pretty special to offer.

This might explain the runup in Newsys shares the last week in January, culminating with the 100,000 share cross on the 29th.

The Q3 results should be released within the next few weeks so we should see if the growth train is still on track.
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