COMPUTER MODELLING GROUP $12.59 - Toronto symbol CMG

COMPUTER MODELLING GROUP $12.59 (Toronto symbol CMG; TSINetwork Rating: Speculative) (403-531-1300; www.cmgl.ca; Shares outstanding: 78.8 million; Market cap: $990.2 million; Dividend yield: 3.2%) sells software and consulting services that help oil and gas producers use advanced recovery techniques to get more out of their wells.

In the quarter ended September 30, 2014, Computer Modelling’s revenue rose 14.8%, to $19.7 million from $17.2 million a year earlier. Earnings gained 33.3%, to $7.5 million, or $0.09 a share, from $5.6 million or $0.07. The company cut its costs, pushing its earnings higher.

Computer Modelling holds cash of $65.4 million, or $0.83 a share, and has no debt. The stock yields 3.2%.

Already a leader in complex heavy oil and oil sands simulations, Computer Modelling should profit further as oil and gas producers continue to develop other unconventional sources, such as shale gas, coalbed methane and stranded gas.

Computer Modelling is a buy.

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