CGI’s alliances pay off

Article Excerpt

CGI GROUP INC. $62 (Toronto symbol GIB.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 303.9 million; Market cap: $18.8 billion; Priceto- sales ratio: 1.8; No dividends paid; TSINetwork Rating: Extra Risk; www.cgi.com) is Canada’s largest provider of computer-outsourcing services. It helps its clients automate routine functions such as accounting and buying supplies. That makes companies more efficient and lets them focus on their main businesses. CGI’s hidden assets—including relationships it has formed with U.S. government agencies and other clients—are a key part of its success. For example, the company recently won a new contract to help the U.S. Department of Agriculture (USDA) shift many of its budgeting and financial reporting functions to a cloudcomputing system. If the USDA exercises all of its options, the entire deal would be worth $848 million U.S. over 10 years. To put that in context, CGI’s annual revenue is $10.7 billion (Canadian). The USDA also provides administrative services to other U.S. government departments,…