Dragon got it rightYou called it Dragon, an upswing over $11 and pushing higher.
Fundamentals are still strong, and the outsourcing and consulting services market remains robust, despite the uncertainty and instability in financial markets.
No reason to believe that CGI will report anything but good news in Q2 results to be announced in early May. We should expect to see a reduced float with the buy-back activity and continued strong earnings and margins.
This will put us at an even more favorable P/E, and bound to translate into good things for us.
As for the shorts - forget about it. Increase in shorts means nothing for CGI.
During all of the recent surges we've seen very high levels of shorts. As far as I can tell it relates to institutions covering long positions and/or options. The old wisdom that high short balances indicates negative sentiment and downward momentum just doesn't seem to hold true for CGI.
If we can learn anything from history it should be that if you buy when the shorts are big then you'll make great returns on CGI.
- Serge