CALIAN TECHNOLOGIES $20.35 (Toronto symbol CTY; www.calian.com) operates in two areas: the business and technology services division (which supplies 70% of Calian’s revenue) provides engineers, health care workers and other skilled professionals to clients on a contract basis. The systems engineering division (30% of revenue) sells hardware and software for testing, operating and managing satellite and other communication systems. In the three months ended March 31, 2013, Calian’s revenue fell 4.4%, to $58.9 million from $61.6 million a year earlier. Earnings declined 8.6%, to $3.4 million, or $0.44 a share, from $3.7 million, or $0.48 a share. The business and technology services division continues to benefit from steady orders from various Canadian federal government departments, including the Department of National Defence. [ofie_ad]
Tech stocks: Primacy acquisition adding $3 million a year to Calian’s revenue
Early last year, Calian bought Primacy Management Inc., of Burlington, Ontario. Primacy designs, builds and manages in-store health clinics for Loblaw (symbol L on Toronto). Primacy now operates 124 such clinics in Loblaw’s stores across Canada. Primacy is adding about $3 million a year to Calian’s revenue and is contributing to its earnings. The company holds cash of $29.9 million, or $3.93 a share, and has no debt. The stock has a high 5.5% annualized yield. In the latest edition of Stock Pickers Digest, we look at the financial outlook for Calian Technologies in light of the prospect of fewer orders from a trimmed-down federal government. We conclude with our clear buy-hold-sell advice on this stock. (Note: If you are a current subscriber to Stock Pickers Digest, please click here to view Pat’s recommendation. Be sure to log in first.) COMMENTS PLEASE—Share your investment knowledge and opinions with fellow TSINetwork.ca members Calian Technologies is one company that draws a significant share of its revenue from government orders. With the trend toward leaner budgets and trimmer government departments, do you think stocks like Calian are going to be less attractive? Or will companies with established pipelines to government contracts continue to have an advantage over less well-connected rivals? Let us know what you think.
