Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : CGI Group (GIB.A) - -- Ignore unavailable to you. Want to Upgrade?

To: The Coz who wrote (846)	11/22/1998 5:29:00 PM
From: Sili Investor	Read Replies (1) \| Respond to of 1673

Coz: Although I agree with you that $140 by this time next year is hard to achieve, I will raise a couple of interesting scenarios: 1. CGI's Year2000 business should increase profits over the next 18 months. Rumors of large Year 2000 contracts abound but nothing from the company. Large contracts reap very good margins and CGI is smart enough to limit its exposure of liability so not much downside to these contracts. 2. Also remember that CGI, through Bell Sygma, is now working on Bell's Year 2000 program, a very significant one at that. 3. CGI's margins on Bell Sygma business should be higher than they have experienced on their other business. This would only make sense, the owner (BCE) has an interest in making sure CGI makes money and can control that since we all know who owns Bell Canada. 4. New projects at Bell Canada should be given directly to CGI. These, in fact, would not necessarily be reported in the press since its just an "all-in-the-family" situation. 5. At some point over the next year, CGI should make a number of acquisitions. My guess is that Mr. Godin is smart enough to realize that any acquisition will not take place until the share price has returned to over the $30 level. Undoubtably, the larger acqusition(s) will be share-based transaction(s). 6. As CGI gets larger, and although corporate costs will increase, as a percentage of overall profit, these corporate costs will be lower, therefore, hopefully, a better performance. 7. Over the past 12 to 18 months, CGI's acqiusitions had to be consumed. It should be expected that the margin on these businesses would only improve as the acquisition truely becomes part of the CGI family. Anyway, I agree with you, only time will tell. I think we all agree on one thing, we are at the beginning of atleast a mini-bull for CGI. $30 to $40 over the next two months are not out of the question at all, protentially providing another share split in late January. Wit a couple of good news after that, who knows where this may go! Sili