# Computer Modelling Group (TSE:CMG)



## Dibs (May 26, 2011)

CMG is a small cap computer software technology company serving the oil and gas industry. It has been recently mentionned by the Dividend Ninja and covered on another blog that I follow. 

Some more info:


Engaged in the development and sale of reservoir simulation software
Blue chip client base over around 50 different countries
Div yield: 3.75
Div payout: 89.5% (has gone over 100%)
P/E 27.5


I am wondering if this stock is on anyone's radar. Riseofamillionaire, haroldcrump, and doctrine have mentioned this stock in previous posts in various threads. Maybe they could share some more comments on this stock.


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## PMREdmonton (Apr 6, 2009)

I have had my eye on this one for awhile but have not yet bought any.

The thing that is most impressive to me about them is their consistent profitability in a very volatile business and in a very trying economic environment. They have been growing revenues, earnings, book value per share, cash flow from operations and their dividends paid out. They presently have no long-term debt. They seem to be quite shareholder friendly and pay out what they can afford while continuing to grow their business.

Now in terms of the company itself, I think the whole energy industry with its reliance on new production coming from more challenging types of operations has put a greater emphsis on seismic, 3-D seismic and modeling of the wells. So I think they are definitely in a growing sector which is where you want to put your money to work in general.

My only hesitation is that they do sell at high multiples of P/E, P/B, P/S and P/CF. The dividend yield is nice and the shares have been appreciating well but you always worry that at some time the market may not give them such a rich multiple. I could justify such a high multiple in a very fast growing company and these guys have been growing but it seems to be more in the range of 10% for revenues and 15% for earnings. Dividends have been growing much faster but are ultimately constrained by FCF growth so the rapid expansion of their dividends will soon come to a halt without faster FCF growth.

So thus far I have stayed on the sidelines myself. Perhaps a better entry price will be available in the future.

This is probably a good one for those who like to invest according to momentum and market returns. If that is the type of investor you are they have a very good looking chart.


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## riseofamillionaire (Feb 23, 2012)

PMREdmonton said:


> I have had my eye on this one for awhile but have not yet bought any.
> 
> The thing that is most impressive to me about them is their consistent profitability in a very volatile business and in a very trying economic environment. They have been growing revenues, earnings, book value per share, cash flow from operations and their dividends paid out. They presently have no long-term debt. They seem to be quite shareholder friendly and pay out what they can afford while continuing to grow their business.
> 
> ...


Very good snapshot. This is one of those companies where it is hard to find any negatives besides the premium valuation. 

I would be cautious at this level because with their recent dividend increase (which was fantastic, a 23% increase) i expected the stock to rally nicely yet it hasn't. Maybe it's just the bad market. It has held up well compared to the energy sector tho, so i could be off base with that.

However, with everything that's out there, this is obviously an above average company. There is plenty here that other companys only dream about, (no debt, has a niche, consistent 20%plus EPS growth, relatively underfollowed, dividend growth, special dividends etc.) it's a special situation. That is the reason I bought it.


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## Dibs (May 26, 2011)

Since the last post CMG has gone from $18 to $23 and has remained in the 21-23 range most of 2013. Last week it started moving up. Does anyone know why?


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## doctrine (Sep 30, 2011)

I noticed this, but can't figure out why. Volume isn't significant either. I don't understand the valuation of this company, with a P/E of 40 now and little growth, but good news for anyone here that does own it (I know there are a few).


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## Hawkdog (Oct 26, 2012)

Dibs said:


> Since the last post CMG has gone from $18 to $23 and has remained in the 21-23 range most of 2013. Last week it started moving up. Does anyone know why?


could be the price of oil, i have was in this one for quite awhile but recently sold out. 
This company is dependant on oil companies, since the price has shot up over 100 bucks, that would be my guess on why the price has moved up.


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## Dibs (May 26, 2011)

> Computer Modelling Group ($31.01, +2.48%) raised its quarterly dividend 5.3% to 20 Canadian cents a share and announced plans for a two-for-one stock split. It also posted earnings for its fiscal year ended March 31 of 70 Canadian cents a share, up from 64 Canadian cents, on stronger revenue.


http://blogs.wsj.com/canadarealtime...ts-automation-tooling-and-computer-modelling/


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## lembongan (Sep 16, 2014)

*time to back up the truck?*

Getting close to it's 52w low. Company is buying back shares. Somebody posted elsewhere "buy when the company is buying its own shares and sell never." Have to wonder if we're seeing permanent PE contraction. 

Thoughts?


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## lembongan (Sep 16, 2014)

*Load up?*

Anyone have thoughts on this? 

Near its 52w low. Company buying back shares. I read on another board 'buy when the company buys back shares and sell never.'


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## Loon (Apr 12, 2012)

I'm looking for CDN long term hold dividend payers. I usually go with bigger market cap and stuff that I don't need to keep close tabs on, but this looks interesting. Is anyone following CMG lately?


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## Afp (Mar 19, 2013)

I have been a very happy CMG shareholder for years. I plan to hold this stock for as long as I can. CMG seems to be always expensive with its P/E above 20 even in this oil market condition. Computer Modelling Group Ltd. is one of the few companies in Calgary haven't had any staff laid-off this year.

I rate this stock as a hold atm. If it drop below $8, I will buy more.


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## OnlyMyOpinion (Sep 1, 2013)

As they acknowledged in their year end results, there are some strong headwinds now and in the future. Keep a close eye on it. I'd be hesitant to chase this one down until there is a bit more clarity on future prospects. Their software (Gem, etc.) are mainstays in the oil patch, ongoing companies will need to retain their reservoir modeling capability, but some are going to disappear/consolidate (e.g. Connacher) and new sales are likely to be nonexistent for the foreseeable. Got cash and no lt debt so in good shape that way, closed Caracas office and reining in discretionary costs, also good.
http://www.cmgl.ca/news/188/196/Computer-Modelling-Group-Announces-Year-End-Results


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## hollyhunter (Mar 10, 2016)

CMG.TO has been showing support at 9.68 and resistance at 10.88. Bullish technical indication: MACD goes green, bullish cross in Stochastic oscillator and RSI is trading near to 58.77 level with positive bias.


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## treva84 (Dec 9, 2014)

hollyhunter said:


> CMG.TO has been showing support at 9.68 and resistance at 10.88. Bullish technical indication: MACD goes green, bullish cross in Stochastic oscillator and RSI is trading near to 58.77 level with positive bias.


What does this even mean?


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## LBCfan (Jan 13, 2011)

treva84 said:


> What does this even mean?


nothing


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