Computer Modelling Group (CMG.TO), mcap=$400m, price $5.03 vs $4.50

$CMG.TO pitch:
– The Canadian software company focused on O&G reservoir simulation and modeling.
– CMG business/booking cycle lags movement in oil & gas prices, with inflection expected by the year-end with pent-up growth for additional software licensing/seats.
– 35% market share, behind Schlumberger’s Eclipse solution (55% share).
– Strong entry barriers with half of the personnel & 20% of revenues spent on R&D.

$CMG.TO valuation: Trades at 15x FCF and likely 10x FCF when pent-up growth is realized.

Exp. gain: Not specified.

Full CMG.TO write-up (free guest account required):

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