These 2 Trade At Low Multiples To Cash Flow

Article Excerpt

COMPUTER MODELLING GROUP $6.80 (Toronto symbol CMG; SI Rating: Speculative) (403- 531-1300; www.cmgl.ca; Shares outstanding: 17.3 million; Market cap: $101.4 million) is a computer software technology and consulting company specializing in the oil and gas industry. Its software provides engineers with oil and gas reservoir simulation, and three-dimensional visualization and animation. The company has over 330 clients worldwide in 40 countries. Computer Modelling’s revenues in the three months ended September 30, 2008 rose 57.1%, to $9.6 million from $6.1 million. Earnings more than doubled to $3 million from $1.4 million a year earlier. Earnings per share rose 88.9%, to $0.17 from $0.09 on more shares outstanding. Cash flow per share doubled, to $0.20 from $0.10. Strong oil and gas industry exploration spending continues to boost Computer Modelling’s revenues and earnings. The company holds cash of $25.2 million or $1.46 a share and has no debt. It spent $2 million, or a high 20.6% of revenues, on research and development in the latest…

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