Core Insights - Innodata Inc. (INOD) is strategically evolving by expanding into pretraining data, which could significantly reshape its growth profile and competitive positioning [1] - The company has invested approximately $1.3 million in pretraining capabilities and has secured contracts worth about $42 million, with an additional $26 million expected soon [2][8] - The shift to pretraining data aligns INOD closer to the core R&D priorities of frontier model builders, enhancing long-term partnerships and increasing switching costs [3] Financial Performance - Innodata's pretraining programs are in early ramp stages, with most revenue anticipated to materialize in 2026, indicating a potential long-term growth driver [2][5] - The company's shares have increased by 2.5% over the past six months, outperforming the industry average growth of 1.5% [6] Valuation Metrics - INOD currently trades at a forward price-to-earnings ratio of 43.7, significantly higher than the industry average of 17.03, and compared to CACI International and CGI's P/E ratios of 18.31 and 14.22, respectively [9] - The Zacks Consensus Estimate for INOD's earnings per share has risen to 89 cents for 2025 and $1.20 for 2026, reflecting positive earnings revisions [12]

Core Thesis - CGI Inc. is positioned as a strong investment opportunity due to its robust financial performance, disciplined capital allocation, and growth potential driven by AI-embedded managed services [1][5]. Financial Performance - Revenue increased by 9.7% year-over-year, with adjusted EPS rising by 10.9%, indicating profitable growth despite temporary margin distortions from restructuring costs [3]. - Bookings reached $4.79 billion, resulting in a 119% book-to-bill ratio, reflecting sustained client demand [3]. - The backlog stood at $31.45 billion, equivalent to two years of revenue, providing visibility for growth over the next 24–36 months [3]. Capital Allocation and Shareholder Value - The company executed a disciplined approach with strategic M&A totaling $1.8 billion and aggressive buybacks amounting to $1.275 billion, enhancing shareholder value [4]. - CGI raised its dividend by 13%, demonstrating confidence in future cash flows [4]. Growth Drivers - AI and managed services are identified as primary growth engines, contributing to efficiencies, higher-margin work, and client renewals [4]. - Free cash flow remains strong at 16.5% of revenue, supporting ongoing investments and shareholder returns [4]. Valuation Metrics - Valuation metrics indicate an attractive stock price with a PE ratio of 16, levels last seen in 2014 and 2020, alongside a 13.6% return on invested capital [5]. - The company’s strong balance sheet and predictable cash generation position it as a classic compounder, offering limited downside and significant upside potential with accelerated AI adoption [5].

Business Context - De La Salle University, established in 1911, is recognized for its research productivity and academic excellence in the Philippines, offering graduate and undergraduate programs in technology, science, business, and health sciences [1]. Industry Trends and Growth Drivers - The university's health-economics research group, led by associate professor Arnel O Uy, is addressing the challenge of providing timely insights into the evolving global market for healthcare fraud detection and analytics, driven by emerging digital claims-fraud techniques and increased regulatory scrutiny [3][4]. - The report by Verified Market Research (VMR) provides actionable insights that help bridge academic inquiry with real-world market intelligence, enabling the development of curricula and research projects that align with the current state of fraud analytics [4]. The Commissioned Study - VMR collaborated with DLSU to define key research questions and deliver a comprehensive global market study, which included market sizing and segmentation by region and component, competitive analysis of key players, and a forecast through 2031 [5]. - The report led DLSU to adjust its research priorities, launching a new elective on fraud analytics in healthcare and securing a grant for collaborative research with local payers [6]. Report Coverage - The Healthcare Fraud Analytics Market Size and Forecast study by VMR goes beyond raw data to provide actionable insights for business strategy through 2031, covering various aspects such as application segmentation, end-user segments, and trend drivers [7][13]. Why De La Salle University Chose Verified Market Research - VMR's collaborative model, transparency in methodology, and flexibility in adjusting the scope of the study were key factors in DLSU's decision to engage with them, positioning VMR as a research partner rather than just a supplier [10][12].

Core Insights - Innodata Inc. (INOD) has experienced a stock increase of 59.6% over the past three months, significantly outperforming the industry and S&P 500, which gained 6.9% and 5.9% respectively [1] - The company's strong third-quarter performance, with record revenues of $62.6 million (up 20% year-over-year), has contributed to investor enthusiasm [5] - Management has reaffirmed expectations of at least 45% year-over-year revenue growth in 2025, indicating confidence in future growth [6] Financial Performance - Innodata's Q3 revenues reached a record $62.6 million, reflecting a 20% increase year-over-year, alongside improved adjusted EBITDA margins and strong cash generation [5] - EPS estimates for 2025 have increased to 84 cents from 78 cents, although this represents a 5.6% year-over-year decline, with expected earnings growth of 33.3% in 2026 [14] - Revenue projections indicate a rise of nearly 45.2% in 2025 and 24.6% in 2026, contrasting with modest growth for other industry players [15] Strategic Initiatives - The company has secured $68 million in pretraining contracts, with $42 million already signed and an additional $26 million expected soon, positioning it for significant revenue in 2026 [10] - The launch of Innodata Federal aims to tap into government contracts, with an initial project expected to generate approximately $25 million in revenues [11] - Engagements with sovereign entities in the Middle East and Asia are anticipated to provide durable multi-year revenue potential due to state-level funding [12] Market Positioning - Innodata is deepening relationships with major AI model builders, with expectations that six of eight large tech customers will increase spending in 2026 [9] - The company is transitioning from post-training data to high-value pretraining data, reflecting strategic agility and positioning ahead of competitors [10] - Innodata's forward 12-month P/E ratio stands at 63.37x, significantly higher than the industry average of 16.86x, indicating a premium valuation [16] Growth Opportunities - The enterprise AI practice is scaling, with initial engagements in the $1-$2 million range showing potential for repeat business [13] - The company is moving into larger and more strategic programs, enhancing its growth trajectory through expanded relationships with major technology firms [6] - Overall, Innodata is positioned at the center of the generative AI ecosystem, with expanding contracts and entry into fast-growing markets [19][20]

Core Insights - CSG Systems (CSGS) shares increased by 14.4% to close at $78.68, supported by high trading volume, compared to a 6.8% gain over the past four weeks [1] - The company is experiencing increased profitability due to shifts in SaaS mix, operational efficiencies, and strategic expansions into new industry verticals [1] Earnings Expectations - CSG Systems is projected to report quarterly earnings of $1.11 per share, reflecting a year-over-year increase of 4.7% [2] - Expected revenues for the upcoming quarter are $276.71 million, which is a 1.5% increase from the same quarter last year [2] Earnings Estimate Revisions - The consensus EPS estimate for CSG Systems has been revised 0.6% higher in the last 30 days, indicating a positive trend that typically correlates with stock price appreciation [4] - Trends in earnings estimate revisions are strongly linked to near-term stock price movements, suggesting potential for further strength in CSGS [3][4] Industry Context - CSG Systems is part of the Zacks Computer - Services industry, where CGI Group (GIB) has seen a 2.5% decline in its stock price, closing at $85.95, with a return of -1.1% over the past month [4] - CGI's consensus EPS estimate has increased by 0.9% to $1.53, representing an 8.5% year-over-year change [5]

Core Viewpoint - CGI Inc. has announced a conditional agreement to acquire Comarch Polska SA, enhancing its presence in the European public sector market [1][2]. Expansion of Workforce and Capabilities - The acquisition will integrate over 460 professionals from Comarch Polska, increasing CGI's workforce in Poland and the Baltic region to approximately 1,500 experts [2][3]. - This move is expected to strengthen CGI's public sector capabilities and accelerate growth in a digitally mature European market [4]. Public Sector Strengthening - Comarch Polska has been providing IT solutions for public administration since 1993, including ERP platforms and managed technology services [5]. - The merger will allow CGI to deploy its proprietary digital solutions across Poland and enhance support for agencies in health, agriculture, and social security [5][8]. Regional Expansion Strategy - The acquisition will enhance CGI's ability to deliver integrated digital transformation for priority public missions and improve service delivery to government agencies [7]. - CGI's AI capabilities are expected to further enhance the efficiency of government operations [8]. Opportunities for Employees and Clients - The combination of CGI and Comarch Polska is anticipated to open global opportunities for employees and clients, strengthening services and delivering greater value [9].

Core Insights - CGI Inc. is a leading Canadian IT services and consulting firm with a diversified portfolio, focusing on both public-sector and commercial contracts, which provides consistent financial metrics for investors [2][3][11] Company Overview - Founded in 1976 and headquartered in Montreal, CGI has evolved from a regional systems integrator to a multinational provider of consulting, managed services, and software-led solutions [2][3] - The company operates a hybrid business model that combines strategy consulting, systems integration, and long-term managed services, prioritizing repeatable revenue streams from multi-year outsourcing and government contracts [3][21] Financial Performance - As of October 14, CGI's market capitalization was approximately CAD 28.2 billion, with trailing twelve-month revenue around CAD 15.56 billion and net income near CAD 1.71 billion [12][18] - The company has a trailing P/E ratio of approximately 16.8–17.0 and a forward P/E of about 14.2 based on consensus forecasts [12][15] - Profitability measures indicate a profit margin exceeding 11%, with robust free cash flow generation supporting reinvestment and shareholder returns [13][20] Market Positioning - CGI's market positioning is characterized by a portfolio of long-duration contracts and recurring services, enhancing revenue visibility, particularly from government contracts [5][10] - The company competes with global consulting firms like Accenture and Capgemini, as well as delivery-oriented players such as Tata Consultancy Services and Infosys [9][25] Operational Strategy - CGI leverages a global delivery network with both onshore and offshore teams, offering services such as application development, cybersecurity, and digital transformation [4][24] - The operational model emphasizes industry-specific capabilities, particularly in sectors like financial services, healthcare, and utilities [4][5] Competitive Differentiators - Key competitive advantages include a strong presence in North America and Europe, a focus on client proximity, and a steady pipeline of acquisitions to expand capabilities [6][10] - The hybrid model of outsourced services and systems integration provides revenue visibility and positions CGI as a strategic partner for large enterprises [10][28] Historical Context - CGI's growth has been marked by strategic acquisitions and a focus on long-term government contracts, which have created significant backlog and recurring revenue [31][35] - The company has transitioned from a regional player to a global integrator, with notable acquisitions enhancing its market presence [30][31] Leadership and Governance - The leadership structure combines founder oversight with professional management, ensuring continuity and strategic growth through disciplined integration [36][41] - The current CEO, François Boulanger, leads a global team focused on operational excellence and client relationships [36][48] Stock Market Presence - CGI is listed on the Toronto Stock Exchange (TSX:GIB.A) and has a secondary listing on the New York Stock Exchange, being a constituent of the S&P/TSX 60 index [42][49] - The company's stock performance has shown volatility, with a 52-week trading range between CAD 121.69 and CAD 175.35 [44][45]

Market Overview - Canadian equities advanced in Q3, with the S&P/TSX Composite Total Return Index increasing by 12.5%, reaching an all-time high [2] - Seven of the eleven GICS sectors set new records, including energy, materials, industrials, consumer discretionary, consumer staples, financials, and utilities [2] - The U.S. dollar rose 2.3% against the Canadian dollar to $1.39 USD/CAD, although it remains down 3.2% year-to-date [3] Economic Context - Canada's economy showed modest improvement in July, with GDP growth affected by high unemployment and low inflation [4] - The Bank of Canada and the Federal Reserve both cut rates, with the Bank of Canada lowering rates to 2.50% to stimulate housing and consumption [4] Sector Performance - On an absolute return basis, 10 of 11 GICS sectors increased in Q3, with materials (+37.8%), IT (+13.2%), and energy (+12.6%) being the best performers [5] - Weakness in industrials was noted, particularly in Canadian railways, which faced pressure from softer shipping volumes and trade uncertainty [9] - Energy sector performance was mixed, with volatility in crude oil and natural gas prices, ending at $62.37/bbl and $3.30/mmbtu respectively [6] Strategy Performance - The ClearBridge Canadian Equity Strategy underperformed the benchmark in Q3, primarily due to cyclical exposure in materials [8] - Financials were the best contributors to the Strategy's performance, with strong selection benefiting from not owning underperforming stocks [12] Portfolio Positioning - The Strategy's largest sector exposures were in financials, industrials, and energy, with an underweight in materials and financials [18] - Trading activity increased, with selective exposure to out-of-favor cyclical stocks and trimming of defensive sectors [14] Corporate Actions - Several corporate actions occurred, including Parkland Corp.'s acquisition by Sunoco LP and MEG Energy's unsolicited bid from Strathcona Resources [13] - Teck Resources and Anglo American agreed to a merger, creating a global mining leader with significant copper exposure [13] Outlook - Canadian equity markets continued to show strength, supported by resilient corporate earnings amid global dynamics [19] - Investor sentiment remains cautious but resilient, with macro headwinds and political risks increasingly priced into expectations [19]

Core Insights - Innodata Inc. (INOD) is trading at a forward 12-month price-to-earnings ratio of 77.7X, significantly higher than the Zacks Computer - Services average of 16.48X and the broader Computer and Technology sector's 28.43X [1][5] - The stock has increased by 387.3% over the past year, contrasting with an 8.4% decline in the industry and a 13.8% rally in the S&P 500 [3][5] - The company's growth is driven by rising demand for generative AI and data services, with significant project expansions with major tech clients [6][8] Financial Performance - The Zacks Consensus Estimate for 2025 and 2026 sales is projected at $243.4 million and $300.8 million, indicating year-over-year growth of 42.8% and 23.6%, respectively [9] - Earnings for 2025 are expected to decline by 6.7%, while a growth of 38% is anticipated for 2026 [9] Market Positioning - Innodata's strategic focus on emerging technologies like Agentic AI and robotics positions it well for future AI adoption, emphasizing the importance of "smart data" [7][8] - The company maintains a solid balance sheet while investing in sales, delivery, and product innovation to enhance its competitive edge [8] Competitive Landscape - Innodata faces challenges due to customer concentration, particularly reliance on its largest client, which poses risks of revenue fluctuations [14] - The company's aggressive investment strategy may impact current profitability, raising concerns among investors about near-term margin stability [15] - The competitive market environment, characterized by price pressures and evolving partnerships, adds to the execution risks despite significant long-term opportunities [16]

Core Viewpoint - The practice of tax-loss selling is highlighted as particularly relevant this year due to significant gains in the S&P/TSX Composite index, with expectations for increased relevance in 2025 [1] Group 1: Tax-Loss Selling Insights - Analysts from CIBC Capital Markets emphasize the importance of selling losing holdings to offset capital gains, especially in the context of the current market conditions [1] - The report identifies criteria for selecting tax-loss selling candidates, specifically stocks that have declined by 20% or more from their 52-week high and have negative year-to-date returns as of October 15 [1] - A total of 32 TSX-listed stocks are included in the tax-loss watch list, with notable mentions such as CGI Inc. (TSX:GIB/A) and Constellation Software Inc. (TSX:CSU) [1] Group 2: Timing and Transactions - Most tax-loss selling activities are expected to occur between mid-November and December, with a deadline for transactions set for December 30 [1]