CGI ready to make acquisition work

Article Excerpt

CGI INC. $155 is a buy. The company (Toronto symbol GIB.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 227.9 million; Market cap: $35.3 billion; Price-to-sales ratio: 2.4; Dividend yield: 0.4%; TSINetwork Rating: Average; www.cgi.com) is Canada’s largest provider of computer-outsourcing services. CGI fuels its growth with a “Build and Buy” strategy. The “Build” part refers to the expansion of its current client relationships and the development of new ones. The “Buy” part involves making acquisitions. Under that Buy part of the strategy, CGI recently agreed to acquire Daugherty, a St. Louis-based consulting firm specializing in artificial intelligence and data analytics. CGI has not yet said how much it will pay for Daugherty. However, the company has a long history of successfully absorbing new businesses. That cuts the risk of using acquisitions to expand. CGI is a buy. buy…