Former #1 pick still offers great value

Article Excerpt

CGI GROUP INC. $38 (Toronto symbol GIB.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 311.7 million; Market cap: $11.8 billion; Price-to-sales ratio: 1.1; No dividends paid; TSINetwork Rating: Extra Risk; www.cgi.com) is Canada’s largest provider of computer outsourcing services. CGI helps its clients automate routine functions, like accounting and buying supplies. That makes them more efficient and lets them focus on their main businesses. Two-pronged strategy spurs results CGI follows what it calls a “Build and Buy” strategy. The “Build” part refers to expanding relationships with existing clients and attracting new ones. The company’s long-term outsourcing contracts give it steady, predictable revenue streams. They also let CGI sell these clients other services. The “Buy” part of the strategy involves making acquisitions. CGI tempers the risk of buying other companies to fuel its growth by targeting firms that enhance its expertise or geographic presence. For example, in August 2012, CGI completed the largest purchase in its history when it…