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Descartes Systems Group Inc. (The) (DSG)
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Enghouse Systems Limited (ENGH)
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Kinaxis Inc. (KXS)
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TECSYS Inc. (TCS)
Q: Hold all four in growth oriented TFSA for several years now. How much overlap do you see among them? How would you rank them first (best) to last? Are any need to own? If reducing number of these four holdings, which ones would you trim or eliminate? Any that could be increased as position size of each is less than 1.5% of total of all portfolios?
5i Research Answer:
There is some business overlay here, especially between DSG and KXS, but also those two with TCS somewhat. We would rank: DSG, KXS, TCS, ENGH, though TCS is the smallest and should be considered the riskiest. We like the first two a lot, but 'need to own' is a different type of category. There are risks here, but DSG in particular has executed very well. We would be OK owning just it if one wanted to concentrate the sector. But a combo DSG/KXS might be best if increasing exposure.