Tuesday, July 8, 2008

Computer Modelling Group

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional.

Since we seem to be in a bear market, we should have some fun. This company (TSX-CMG) is a dividend paying growth stock that would also be considered to be a small cap with a capitalization of around $115 million.

First, I will give you the negative news. The Graham Price on this stock, March 2008 is $6.89 and the price at the same time is $15.20. However, this is not surprising as this is a growth stock, but it is a caution, as it shows that the stock is risky.

Other than that, what is not to like about this stock. The following figures are based on 5 year averages to March 2008, the last Annual Report date. The revenue is up 20% per year and the Earnings per Share up on average 22% per year. Dividends are up on average 27.5% per year. The closing price is up 55% per year on average. The cash flow is up on average 23% and the book value up on average 15%. At March 2008, the asset/debt ratio is a health 2.5, the Return on Equity (ROE) is a health 38% and the Accrual Ratio at -5.5% is good.

This would be a great stock is you can accept the risk. Besides all the fine stuff above, insiders are buying this stock.

See my spreadsheet on this company at http://www.spbrunner.com/stocks/cmg.htm. See my website at http://www.spbrunner.com/stocks.html.

It is a computer software technology and consulting firm engaged in the development and sale software. Its web site is www.cmgl.ca.

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