Yahoo Finance The 1 Tech Stock I Would Buy on the TSX Today
Written by Amy Legate-Wolfe at The Motley Fool Canada
Tech stocks had a rough week. Especially the Magnificent Seven, which were a bit less than magnificent when it came to share performance. Even though most reported great results! Investors, however, weren’t as impressed with how tech stocks were using artificial intelligence (AI), and how costs continued to weigh on profits.
But even the Magnificent Seven didn’t perform all that great. There is another tech stock I would consider for some strong cash, even now. And that’s CGI (TSX:GIB.A).
Earnings up
CGI reported earnings this week that beat out earnings estimates for yet another consecutive quarter. The business and technology consulting company reported first-quarter profit and revenue that was up compared to the year before.
The tech stock earned $389.8 million for the quarter, up from $382.4 million the year before. This came to $1.67 per diluted share, up from $1.60 in 2023. CGI also brought in revenue totalling $3.6 billion, another increase from $3.5 billion year over year.
The thing is, CGI stated that its profit excluding specific items actually came to $1.83 per diluted share, which was up from $1.66 the year before. So there was overall a lot of growth by the company in the last year.
More on the way
CGI will likely have even more growth on the way for shareholders. The global IT services firm continues to make strong partnerships, including with more and more governmental agencies. And even while other tech stocks have suffered under these macroeconomic headwinds, CGI stock has seen revenue climb higher and higher.
This really comes down to the company’s long-term contracts that it holds with many clients. These have kept the tech stock quite stable, and will continue to do so in the future. Especially as it holds so many government contracts as well, more than its peers.
Meanwhile, the company continues to use these funds for even larger purposes, usually through acquiring smaller IT firms. This has given it even more access to global markets.
Still a steal
While tech stocks continue to struggle to stay afloat, CGI stock looks to be another story. Shares are up 26% in the last year, as of writing, and we really haven’t seen the dips that we’ve seen with other tech stocks, including the Magnificent Seven.
Meanwhile, shares still offer value. CGI stock trades at 2.5 times sales as of writing, with just 45% of its equity needed to cover all debts. It therefore is in a strong position share wise, while also having plenty of cash on hand for even more acquisitions.
All that said, CGI stock looks to be a great buy on the TSX today. The company continues to trade at or near 52-week highs, but still offers room to grow. Especially when the market and economy fully recovers. So now is the time to buy before this tech stock really takes off. Especially as investors start looking for new opportunities for long-term growth on the TSX today. In that case, CGI stock could be the one you tell friends about buying.
The post The 1 Tech Stock I Would Buy on the TSX Today appeared first on The Motley Fool Canada.
Should you invest $1,000 in CGI Group right now?
Before you buy stock in CGI Group, consider this:
The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the 10 best stocks for investors to buy now… and CGI Group wasn’t one of them. The 10 stocks that made the cut could potentially produce monster returns in the coming years.
Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $17,988!*
Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 35 percentage points since 2013*.
See the 10 stocks * Returns as of 1/24/24
More reading
Can You Guess the 10 Most Popular Canadian Stocks? (If You Own Them, You Might Be Losing Out.)
How to Build a Bulletproof Monthly Passive-Income Portfolio in 2024 With Just $25,000
Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends CGI. The Motley Fool has a disclosure policy.
2024
