Stock market pick: Computer Modelling Group reports higher revenue, lower earnings

Computer Modelling Group Ltd., symbol CMG on Toronto, makes software and supplies services that help its clients get as much oil as possible from their existing wells. The stock market pick makes mostly recurring revenue from software licences and consulting contracts. That gives it long-term stability. Computer Modelling Group is one of the stocks we analyze in Stock Pickers Digest, our newsletter for aggressive investing. In the three months ended March 31, 2011, Computer Modelling’s revenue rose 0.6%, to $14.4 million from $14.3 million a year earlier. A 17% increase in consulting and contract research revenue more than offset a 2% drop in software licence sales due to the strong Canadian dollar. Earnings fell 11.1%, to $4.8 million, or $0.26 a share, from $5.4 million, or $0.30 a share. The company added employees to support its continued growth, and increased its research spending. The stock market pick holds cash of $41.8 million, and has no long-term debt. The company is a dividend paying stock. It pays a quarterly dividend of $0.21 a share. The annual rate $0.84 yields 6.0%. You can get our clear buy/sell/hold advice on Computer Modelling Group and dozens of other stocks that may be appropriate for the part of your portfolio you devote to aggressive investing when you subscribe to Stock Pickers Digest. What’s more, you can get the latest issue absolutely free. Click here to learn how.

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Jim Bates

Jim is an associate editor at TSI Network. He is the lead reporter and analyst for The Successful Investor and Wall Street Stock Forecaster and a member of the Investment Planning Committee. Jim has held the Chartered Financial Analyst designation since 1992 and spent more than a decade at the Financial Post DataGroup before joining TSI Network. He has a Bachelor of Commerce degree from the University of Toronto.

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