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Descartes Systems Group gets top pick status from Michael Decter

Canadian telecom stocks

Michael Decter
American tech giants like Facebook and Apple may grab most of the headlines, even up here in Canada, but there are more than a few homegrown tech success stories that are deserving of investor attention, including Waterloo, Ontario’s Descartes Systems Group (TSX:DSG, NASDAQ:DSGX), says Michael Decter, CEO of LDIC Inc., who likes the logistics company’s prospects in today’s global economic climate.

Over the past half-decade, Descartes Systems has been a stellar performer, with the stock up 260 per cent since mid-2013. Year to date, DSG has risen 24 per cent, reaching a new high of $45.81 last month.

Much is made of the company’s ability to make key acquisitions to strengthen its position in the worldwide networking and logistics industry. This year, for example, Descartes picked up cloud-based transportation management company Aljex Software Inc and airline shipment tracking company Velocity Mail.

Decter says that having a hold on the global logistics space is likely to become more valuable as trade tensions between heavyweights like the United States, China and the European Union threaten to destabilize long-held trade patterns.

“It’s a Canadian company that’s going global, said Decter in conversation with BNN Bloomberg Thursday.

“What they’ve been doing is acquiring companies that have technology that helps you move goods —companies that do logistics, companies that do customs documents, and so on.”

“Let me put it this way, if you want to bet that the world trading system is going to get more complex because of all these [trade disputes], Descartes is who you want to own. They’re a great growth story at a great share price,” he says.

Descartes generated an Adjusted EBITDA of US$22.1 million in its fiscal first quarter 2019, ended April 30, 2018, a 16 per cent increase over Q1 of the previous year, on revenues of $67.0 million, a 23 per cent increase on fiscal Q1/18. Descartes’ fiscal second quarter results will be announced on September 5.

Decter Thursday named Descartes as one of three top picks.

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About The Author /

Jayson is a writer, researcher and educator with a PhD in political philosophy from the University of Ottawa. His interests range from bioethics and innovations in the health sciences to governance, social justice and the history of ideas.
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