Man, it's so fucking cold outside today in Quebec City. Right now, (10 PM), it's about -20 celcius degrees and -30 degrees with the fucking wind. I don't know for fahreneits but it's probably something like -200 or -300 degrees. What a fucking country. And it's not even winter yet. Oh Canada. Terre de nos aieuls. Fuck you Canada.
Today, we go once again with a favorite IT stock of Jason Donville: Enghouse Systems.
I remember that the first comment I read about that stock was probably when Donville said that Enghouse was a kind of baby/junior Constellation Software. I remember taking a look at the numbers of Enghouse without understanding how that business could really be a baby/junior Constellation Software. It's surely a good company, but amazing as Constellation Software? Surely not.
As before, let's take a look at my favorite numbers:
Beta: 0,34 (very low = very interesting)
As we can see below, the growth is great and steady:
2011 EPS: 0,66$
2012 EPS: 0,80$
2013 EPS: 0,92$
2014 EPS: 1,11$
2015 EPS: 1,17$
2016 EPS: 1,74$
EPS growth from 2011 to 2016: 163% (great growth)
Very few stocks achieve that kind of growth.
Actual ROE: 17
Average ROE last 5 years: 15
Debt VS earnings: About 3,5 times (low debt level)
Shares: Very little dilution. Almost nothing for the last 5 years.
Sales growth last year: 10%
EPS growth last year: 49% (the last results were out today and the 49% growth is truly amazing).
Some interesting momentum here.
Actual PE: 30
Forward PE: 26
Average PE last 5 years: 30
The actual price is high but normal when we look at the average price over the last 5 years.
Constellation Software performance last 5 years: 688%
Enghouse performance last 5 years: 390%
Kinaxis performance last 5 years: 364%
Open Text performance last 5 years: 187%
I really like ENGH. If it wasn't for it's astronomic price, I'd probably buy that stock. But I simply can't buy a stock with a forward PE of about 26. Even with Novo Nordisk, which is a stellar ROE stock, I didn't pay this price. Probably that someone will write a comment saying that it's a cash flow machine and blah blah blah. That's always the kind of comment I get when I say that a stock is too expensive for me.
I'd really need a big big correction before buying that stock.