The Successful Investor Hotline – Friday, September 25, 2009

Article Excerpt

CGI GROUP INC., $12.78, Toronto symbol GIB.A, rose roughly 10% this week in response to computer-maker Dell Inc.’s (Nasdaq symbol DELL) friendly takeover of Perot Systems Corp. (New York symbol PER). Like Perot, CGI sells information-technology and business-process services to a wide range of clients. Dell is paying a premium of over 60% for Perot. This helped spur investor interest in other computer-outsourcing stocks, including CGI. However, insiders control 53% of CGI’s votes through multiple-voting class “B” shares. That makes a hostile takeover unlikely. Still, Dell’s offer highlights the strong earnings potential of firms like CGI, particularly as the economy continues to recover. CGI Group is a buy. POTASH CORP. OF SASKATCHEWAN, $97.86, Toronto symbol POT, fell 4% this week after the company cut its 2009 profit forecast to $3.25 to $3.75 a share. (All amounts except share price in U.S. dollars.) Last July, Potash predicted earnings per share of between $4.00 and $5.00. The company issued the lower forecast because lower prices…