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| Jonathen Wellum, B. Comm, B. Sc of AIC Limited |
|---|
| 1375 Kerns Road |
| Burlington ON |
| L7R 4X8 |
| 905-331-4242 |
| Jonathen Wellum, B. Comm, B. Sc's website |
| Toll Free: 1-800-263-2144 |
| Fax: 1-800-660-2664 |
| info@aic.com |
| BUY | Quest Diagnostics Inc. | DGX-N | 55.870 | A leading laboratory and diagnostic business. Less susceptible to changes that could occur in the health sector in the US. Very profitable with a lot of free cash flow. Very defensive. | 2007-07-26 | ||
| TOP PICK | Shoppers Drug Mart Corp | SC-T | 52.050 | This is a business that has strong long-term secular growth because of the pharmacy. They are also doing a wonderful job on the up-front side of the business. Margins are going up. There are aggressively growing their square footage by about 10% a year. | 2007-07-26 | ||
| Comment | Loblaw Companies Ltd | L-T | 51.500 | Numbers just released were pretty good. Starting to get on track. Not out of the woods. Have a lot of brand equity in the President's Choice, location, real estate, etc. | 2007-07-26 | ||
| BUY | Home Depot | HD-N | 37.300 | There is pressure in the housing market, but is largely contained to aggressive lending. This company has a wonderful franchise. If you have a longer-term view, they are a great long-term business. Generates exceptional amount of free cash flow. Buying back stock. | 2007-07-26 | ||
| Comment | Metlife | MET-N | 61.300 | On his watch list. Likes the space. Good long-term demographics to support it. | 2007-07-26 | ||
| TOP PICK | Thomson Reuters Corp | TRI-T | 44.710 | Most of their business is in the US so have had currency headwinds. Have great databases. Stock has come off because of the Reuters acquisition. Feels this transaction is going to add further value to the stock. | 2007-07-26 | ||
| Comment | Morgan Stanley | MS-N | 64.500 | Have done a wonderful job of building their business. Prefers Merill Lynch (MER-N). Dollar cost average when buying these stocks during this intense volatility. | 2007-07-26 | ||
| Comment | Merrill Lynch & Co (US) | MER-N | 75.880 | Very powerful retail brand franchise, much stronger than Morgan Stanley (MS-N) and much more conservative. Dollar cost average when buying these stocks during this intense mortality. | 2007-07-26 | ||
| DON'T BUY | Canadian Imperial Bank of Commerce | CM-T | 92.370 | Whenever there seems to be a problem, there seems to be an inordinate amount of exposure at this bank. New CEO has made huge strides in de-leveraging the business. | 2007-07-26 | ||
| BUY | Barclays Bank PLC | BCS-N | 56.060 | Has a very strong history. A diversified business. Well managed. Valuations on British banks and are trading at a discount to Canadian banks. | 2007-07-26 | ||
| HOLD | UBS AG | UBS-N | 54.380 | This is a powerful asset management company. It taps into a lot of the petro $’s. A lot of Arab money flows up in that direction. It won't be able to grow at the level that it has over the last few years. | 2007-07-26 | ||
| TOP PICK | Manulife Financial | MFC-T | 39.140 | A good example of a very well run company in terms of astuteness and capital management. Good global diversification. | 2007-07-26 | ||
| Comment | Bombardier Inc (B) | BBD.B-T | 6.330 | A play on aerospace which is in a good cycle right now. A risky business and not an easy one. A short-term investment. | 2007-07-26 | ||
| TOP PICK | FedEx | FDX-N | 113.390 | Companies like this, United Parcel (UPS-N) and DHL continue to control a larger and larger portion of goods around the world. This one has a huge global imprint. A good way to play the retail market. 15 X earnings. Big cash flow generator. | 2007-02-09 | ||
| TOP PICK | Quest Diagnostics Inc. | DGX-N | 52.190 | Laboratory testing. The leader in the United States. Fits in well with demographics and growth in diagnostic testing. Recently lost a contract with United Health, which took the stock down 20%. Good price. Great long-term position. | 2007-02-09 | ||
| TOP PICK | Western Union Co. | WU-N | 21.800 | This is a play on globalization. When people move around, they have to move cash around. Operate in over 200 countries. A high margin business. | 2007-02-09 | ||
| HOLD | Brookfield Asset Management (A) | BAM.A-T | 58.340 | Stock is fairly valued. An exceptionally well-run company. Management team are great capital allocators. Good long-term hold. | 2007-02-09 | ||
| HOLD | Loblaw Companies Ltd | L-T | 46.810 | Thoroughly disappointed in the execution that has taken place over the last couple of years. Would let time take its course rather than buying at this time. Will not be easy for them to extricate themselves. Closer to $40 could be an entry point. | 2007-02-09 | ||
| BUY on WEAKNESS | Canadian National R.R. | CNR-T | 53.100 | Best railroad in North America. Not inexpensive, so if you are going to buy it, you have to be comfortable and confident the economy and commodities are going to stay reasonably robust. Would look for a 10% correction to buy. | 2007-02-09 | ||
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| BUY | Encana Corp | ECA-T | 57.000 | P/E of 11 one current earnings and 14 on forward earnings.. Long reserve life. Massive cash flow generator. Has been selling off some of its assets and pruning its business. | 2007-02-09 | ||
| WEAK BUY | Bombardier Inc (B) | BBD.B-T | 4.480 | The cycle, particularly on the aerospace side, is really improving for them. It’s still a very tough business and capital intensive. If you are playing this over the next 12-18 months, with the cycle improving, you are probably going to see some upside. | 2007-02-09 | ||
| PAST TOP PICK | Willis Group Holdings Ltd. | WSH-N | 40.350 | (A Top Pick Mar 8/06. Up 19.7%.) 3rd largest insurance broker in the world. Virtually no underwriting risks. Able to grow organically. Consider it as a Hold. | 2007-02-09 | ||
| PAST TOP PICK | Comcast Corp | CMCSA-Q | 40.820 | (A Top Pick Mar 8/06. Up 52.8%.) Fairly priced and you would be paying for growth at this time. Consider as a Hold. | 2007-02-09 | ||
| PAST TOP PICK | George Weston Ltd. | WN-T | 71.820 | (A Top Pick Mar 8/06. Down 18.9%.) Was too optimistic on Loblaw’s (L-T) turnaround. | 2007-02-09 | ||
| BUY | Manulife Financial | MFC-T | 40.580 | Would buy at this price. | 2007-02-09 | ||
| HOLD | Canadian Imperial Bank of Commerce | CM-T | 100.400 | Has never been too thrilled with this company. | 2007-02-09 | ||
| BUY | AGF Management (B) | AGF.B-T | 28.310 | Thrilled with the way they have turned around. Expect you will see 12%-15% type growth. | 2007-02-09 | ||
| HOLD | Tyco | TYC-N | 31.480 | Stay with this through the break up. Worse in the mid-$30's. | 2007-02-09 | ||
| DON'T BUY | Time Warner Inc | TWX-N | 21.280 | A lot of the media companies have lagged the market from about 2002 until about 6 months ago. Great cash flow generator. This one has a large music component to it and this is under a lot of pressure with competition. Prefers others. | 2007-02-09 | ||
| BUY | Home Depot | HD-N | 41.000 | Well-run company. Expanding and growing their business. Strong franchise. With the cash flow it’s generating and management that is attuned to the business, it should be a 10%-12% grower in the next 3 to 5 years | 2007-02-09 | ||
| HOLD | Amvescap PLC | AVZ-T | 14.210 | Key to their turnaround has been new management., focusing on integrating the different brands all around the world. Good cash flow. | 2007-02-09 | ||
| BUY on WEAKNESS | Microsoft | MSFT-Q | 28.980 | Getting close to its fair market value of $32-$33. It will continue to chug along, but wouldn't be a screaming buy. Looking for high single-digit, low double-digit growth. Consider buying on weakness. | 2007-02-09 | ||
| WEAK BUY | CitiGroup | C-N | 53.400 | Relatively inexpensive. A lot of their problems are behind them. Won't be a business that goes straight up, but will be a slow steady plodder. With the dividend and a 4%-5% growth, you've got a great return without much risk. | 2007-02-09 | ||
| BUY | Canadian Natural Rsrcs | CNQ-T | 58.560 | Very good company. When looking at oil companies, look for ones with long reserves and a safe country. Be prepared to hold for 3 to 5 years. It will stay at least where it is and probably will move up somewhat. | 2007-02-09 | ||
| BUY | HSBC Holdings P L C | HBC-N | 89.420 | Announced that the sub-prime mortgage issue is only about 1% of their portfolio. An exceptionally well run company. Very conservative. With the valuation that has emerged on the bank, he would be buying it. A wonderful global franchise. | 2007-02-09 | ||
| BUY | Great West Lifeco | GWO-T | 35.270 | Picking up Putnam Funds in the US, so they are becoming a substantial wealth management company. Have a long-term track record of being very disciplined. Very investor and shareholder focused. | 2007-02-09 | ||
| Comment | Boeing | BA-N | 90.000 | Have done an incredible job on both the military and commercial side. We are in a growth phase in terms of commercial airlines. Have done well competing globally. | 2007-02-09 | ||
| BUY | Sunlife Financial | SLF-T | 51.800 | A well-run insurance company, but prefers ManuLife (MFC-T), which is a better grower and a little more disciplined in management. Good dividend. | 2007-02-09 | ||
| DON'T BUY | Ford Motor | F-N | 8.730 | Would not invest in the North American type players of the auto industry. Will be very volatile and will trade on news. Virtually owned by employees because of the pension plans. Too difficult to figure out what is going to happen. Speculative. | 2007-02-09 | ||
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| BUY | IGM Financial Inc. | IGM-T | 46.200 | A very strong wealth management business. If you can buy in the mid-$40 range and you hold for the long-term, it's a great position and great asset. | 2006-10-10 | ||
| BUY on WEAKNESS | Intel | INTC-Q | 20.890 | A foundational business to the whole technology industry and chip market. If you can buy below $20 and are in for the long haul, it would be hard not to make money on this. | 2006-10-10 | ||
| PAST TOP PICK | Willis Group Holdings Ltd. | WSH-N | 38.250 | (A Top Pick Mar 8/06. Up 14%.) The only insurance broker that continues to grow. Has a lot more upside. | 2006-10-10 | ||
| PAST TOP PICK | Comcast Corp | CMCSA-Q | 37.640 | (A Top Pick Mar 8/06. Up 41%.) Sold his holdings at a profit. | 2006-10-10 | ||
| PAST TOP PICK | George Weston Ltd. | WN-T | 70.070 | (A Top Pick Mar 8/06. Down 20%.) This has basically being driven by Loblaws (L-T). He is weathering through the food orientation to discount. | 2006-10-10 | ||
| TOP PICK | Hartford Financial | HIG-N | 88.790 | Has both property and casualty as well as life insurance, but trades off P&C mainly. Trades at 10-11 X earnings. Big in wealth management. Diversified into the far east and Japan. | 2006-10-10 | ||
| TOP PICK | American International Group | AIG-N | 66.850 | Has come down to 11-13 X earnings. One of the best insurance franchises in the world. Diversified with about 35-40% in the far east and 55% in the US. Not expensive. | 2006-10-10 | ||
| TOP PICK | Manulife Financial | MFC-T | 36.000 | About 20-25% Canadian, 55-60% US and the rest in the far east. 70% of this business is wealth management. They are good with acquisitions. Good price for a 3-5-year hold. | 2006-10-10 | ||
| DON'T BUY | Gildan Activewear Inc. | GIL-T | 57.650 | Have done a great job. Because of current pricing, he would be hesitant about buying right now. | 2006-10-10 | ||
| BUY | Talisman Energy | TLM-T | 18.230 | An excellent, well-run company. Great assets. Diversified. If you are bullish on oil, picking away on a high-quality asset like this is probably not a bad thing to do. | 2006-10-10 | ||
| BUY | CML Healthcare Income Fund | CLC.UN-T | 15.840 | A well-run business. Generally not a fan of income trusts but they are careful on the distributions. Along with the distributions, you can expect a 3-5% growth. | 2006-10-10 | ||
| DON'T BUY | Fairfax Financial | FFH-T | 152.000 | Sold all of his holdings because of the complexity of the business. Seemed to have a continual string of bad news on acquisitions. There is now a litigation issue before the US courts. | 2006-10-10 | ||
| DON'T BUY | Jean Coutu Group (PJC) (A) | PJC.A-T | 11.920 | Jumping into the US did not make sense to him. Would own Shoppers (SC-T) instead. | 2006-10-10 | ||
| HOLD | Loblaw Companies Ltd | L-T | 46.510 | Down 30% this year. He is a little frustrated with it. Hasn't lost heart completely. Thinks they can turn this around. | 2006-10-10 | ||
| DON'T BUY | Sunlife Financial | SLF-T | 45.590 | Has had problems with their US financial services assets. He has reduced his holdings over the last year or so. Most of their areas are not growing. | 2006-10-10 | ||
| SELL | Bombardier Inc (B) | BBD.B-T | 3.760 | Too difficult a company to figure out. Tough business to get your mind around. | 2006-10-10 | ||
| WEAK BUY | CI Financial Income Fund | CIX.UN-T | 28.550 | Doesn't require a lot of capital, so as an income trust, it is probably not that bad thing. You have to be cautious, because if there is a market pull down, there would be challenges going forward. Have grown by acquisition and will have a tougher time in future. | 2006-10-10 | ||
| HOLD | Brookfield Asset Management Inc. | BAM-N | 43.010 | Exceptionally well run. The hydroelectric side of the business is well positioned for many years to come. A lot of free cash flow. If it dropped 5/10% or grew into its valuation he would consider adding to it. | 2006-08-17 | ||
| BUY | Hewlett-Packard Co | HPQ-N | 35.150 | They had a fantastic quarter. Relatively inexpensive. Have a lot of cash and continue to grow. | 2006-08-17 | ||
| BUY | 3M Co. | MMM-N | 71.200 | Very well run. Has come back down to more realistic levels. Have exceptionally strong market positions in a number of areas. Growing high single digits to low double digits. | 2006-08-17 | ||
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| PAST TOP PICK | Cognos | CSN-T | 34.750 | (A Top Pick July 19/05. Down 23.3%.) Exited his position shortly after that with a slight loss. Has started dabbling in it again. A very strong company and well managed. A potential takeover candidate. | 2006-08-17 | ||
| PAST TOP PICK | CSG Systems International | CSGS-Q | 26.890 | (A Top Pick July 19/05. Up 52.8%.) Sold his position about 6/7 months ago. | 2006-08-17 | ||
| PAST TOP PICK | Toronto Dominion | TD-T | 61.970 | (A Top Pick July 19/05. Up 10%.) One of the best run banks in Canada. Likes the diversity and their position in the US. Still likes it. | 2006-08-17 | ||
| TOP PICK | Intel | INTC-Q | 18.560 | This is going to be a tug-of-war with Advanced Micro Devices (AMD-N). They are both strong, strong players. This one has free cash flow at 6% plus cash on a balance sheet. | 2006-08-17 | ||
| TOP PICK | Power Financial Corp | PWF-T | 34.020 | Likes the underlying businesses. Very much favoured by demographics. Good management. Hasn't done much over the last year. Going at 11/12 X earnings. Good dividend yield. Good for the next 15/20 years. Buy at $34 or less. | 2006-08-17 | ||
| TOP PICK | Shoppers Drug Mart Corp | SC-T | 44.510 | Management is focused, Canadian marketplace, run efficiently. Half the revenue is from the pharmacy, which is a big competitive advantage for them. They are adding 10% square footage growth every year over the next seven years. Beauty/cosmetics is a big business with high margins. | 2006-08-17 | ||
| DON'T BUY | Biovail Corp. | BVF-T | 17.970 | Doesn't like their business model. Forecasting and looking out long-term is very difficult for this business. | 2006-08-17 | ||
| BUY | Qualcom | QCOM-Q | 37.200 | A leader in the wireless area with the 2.5G build out to the 3G. A very well positioned company. Has come off and is not a bad buy at these prices. He is looking at this one. | 2006-08-17 | ||
| DON'T BUY | Talisman Energy | TLM-T | 19.250 | A very well run company. Great assets. When looking at oil, you have to buy companies with an outlook over five years and buy them when the price is off. This is a volatile business. | 2006-08-17 | ||
| BUY | Kinross Gold | K-T | 14.090 | Given its size, it is a takeover candidate. Reasonably well run. | 2006-08-17 | ||
| WEAK BUY | Onex Corp | OCX-T | 24.480 | A bit of a black box, private equity type of operation. Track record has been pretty good over time. Has a lot of cash. If you do own the stock, you have to take a long-term view of the operation. | 2006-08-17 | ||
| DON'T BUY | Sunlife Financial | SLF-T | 45.400 | Prefers Manulife (MFC-T) in terms of quality. Their large mutual fund complex in the US is losing money. Their US life insurance business is not growing very quickly. Have had turnover in executive ranks. | 2006-08-17 | ||
| WEAK BUY | CitiGroup | C-N | 48.570 | Prefers HSPC Holdings (HBC-N) which demonstrates a lot more discipline and has run into virtually no regulatory issues around the world. Only own this one because it was so cheap. | 2006-08-17 | ||
| DON'T BUY | Jean Coutu Group (PJC) (A) | PJC.A-T | 10.160 | Would prefer Shoppers (SC-T). Any Canadian business that goes into the US in a major way in retailing, he would stay clear of. No margin of safety. | 2006-08-17 | ||
| WAIT | Kraft Foods Inc | KFT-N | 32.910 | Good brand name. Very profitable. Dividend is approaching 3%. You don't buy this for growth. Do not pay more than 15 X earnings for it. Buy it $2 lower than it is now. | 2006-08-17 | ||
| SELL | Nortel | NT-T | 2.330 | Not a well-run technology company. Risky. | 2006-08-17 | ||
| BUY on WEAKNESS | Canadian Oil Sands Trust | COS.UN-T | 37.250 | Likes this company. Very profitable. They have production coming on stream. | 2006-08-17 | ||
| BUY on WEAKNESS | Suncor Energy Inc | SU-T | 88.400 | Exceptionally well run. Great assets. If you can, buy it closer to $80. | 2006-08-17 | ||
| WAIT | Canadian National R.R. | CNR-T | 47.140 | Canadian National (CNR-T) and Canadian Pacific (CP-T) are 2 very strong companies. He would give the nod to CNR in terms of their efficiencies. They have both come off recently but would like to see them a little bit lower. | 2006-08-17 | ||
| WAIT | Canadian Pacific Rail | CP-T | 54.320 | Canadian National (CNR-T) and Canadian Pacific (CP-T) are 2 very strong companies. He would give the nod to CNR in terms of their efficiencies. They have both come off recently but would like to see them a little bit lower. | 2006-08-17 | ||
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| HOLD | Washington Mutual Inc | WAHQE-Q2 | 44.510 | An exceptionally well-run bank. Have a big exposure to the mortgage market and big lenders to the real estate market in the US. There could be some bumpy days ahead of them. A very attractive takeover candidate. Nice dividend. | 2006-06-23 | ||
| HOLD | Canadian Tire Corporation Ltd. (A) | CTC.A-T | 66.950 | Have done a terrific job in building a very powerful franchise. Fairly defensive. | 2006-06-23 | ||
| TOP PICK | Power Financial Corp | PWF-T | 30.650 | 3.75% yield. Has not gone anywhere over the last little while, but the underlying components have been good. The Great West (GWO-T) portion has been the part that has been languishing. The market has been overly negative on this. Very conservatively run business. | 2006-06-23 | ||
| HOLD | Canadian Imperial Bank of Commerce | CM-T | 75.990 | All the Canadian banks are reasonably well run. Over the long term, they will make you some money. New management is being really careful with their capital. Quite happy to give it to shareholders through dividends. Have been pulling back from risks. | 2006-06-23 | ||
| BUY | Willis Group Holdings Ltd. | WSH-N | 32.420 | No underwriting risks, it is strictly a global broker. When it comes to globalization, a company that needs to get its insurance needs met, there are a limited number of players. Good price. Growth is at 6/8%. | 2006-06-23 | ||
| TOP PICK | Johnson & Johnson | JNJ-N | 61.320 | Has gone down over the last number of years from its peak. Trading at 15 X next year's earnings. Really a closed end fund of health care business. Good long-term hold. Ultimately, the market will value it for its good cash flow. | 2006-06-23 | ||
| HOLD | Canadian Pacific Rail | CP-T | 54.900 | Both Canadian Pacific (CP-T) and Canadian National (CNR-T) are exceptionally well-run businesses. If you believe commodities are going to continue to stay strong, then you should stay put. | 2006-06-23 | ||
| HOLD | Canadian National R.R. | CNR-T | 47.600 | Both Canadian Pacific (CP-T) and Canadian National (CNR-T) are exceptionally well-run businesses. Not as reliant on commodities. | 2006-06-23 | ||
| BUY on WEAKNESS | Brascan Corporation | BAM.LV.A-T | 45.710 | A closed end sort of alternative asset management. Has large positions in the properties, hydro electric, timber. A little bit expensive. Would buy on 10% weakness. | 2006-06-23 | ||
| TOP PICK | HSBC Holdings P L C | HBC-N | 86.180 | 3.5% yield. Hasn't done much over the last year but has continued to grow and become more profitable. Large bank with 30% Europe, 30% US, 30% Asia and 10% Latin America. Has been unfairly penalized because of its US exposure. Trading at only 10 X next year's earnings. | 2006-06-23 | ||
| HOLD | Proctor & Gamble | PG-N | 55.730 | Basically has gone sideways but pulled back a little bit after its merger with Gillette. When you look at a global consumers product company, it is well positioned. If you believe in global growth and you want purchasing power, it is a very strong business. Not overly expensive. | 2006-06-23 | ||
| DON'T BUY | Fairfax Financial | FFH-T | 103.310 | He prefers to go for the leaders in the insurance business. Those with strong balance sheets and not overly levered. Made a lot of acquisitions and they got hit with a number of catastrophic events and some regulatory issues. | 2006-06-23 | ||
| DON'T BUY | JDS Uniphase | JDU-T | 4.330 | JDS Uniphase is a busness that has over a billion cash and 6 billion dollar market cap, but it is still not making money. Recommends not to buy. | 2006-03-08 | ||
| WAIT | ATI Technologies | ATY-T | 17.350 | ATI Tech is a strong business and has a strong market value, but very volatile. Best to stay put and wait and sell later when it goes up. | 2006-03-08 | ||
| BUY | Power Corp | POW-T | 31.850 | Power Corp is a cheaper way to get into financial services. Sometimes it is better growth than the financial services. He thinks it is a well run business and very respected and opportunistic and a nice little dividend. He owns a lot of Power Financial which is a kin to Power Corp | 2006-03-08 | ||
| TOP PICK | Willis Group Holdings Ltd. | WSH-N | 33.700 | Believes that the Willis Group Holdings is one of the most inexpensive financial stocks that you can purchase. It is the third largest insurance broker in the world. There is no underwriting risk, just a brokerage and professional advice company. This company continues to take market share and continues to grow but has gone nowhere. They are quite active in purchasing the stock when they have cash to invest. | 2006-03-08 | ||
| TOP PICK | Comcast Corp | CMCSA-Q | 26.720 | Comcast was recently added to their US. portfolio. Free cash flow yield maybe 2-3 years out may be approaching 10%. | 2006-03-08 | ||
| TOP PICK | George Weston Ltd. | WN-T | 88.600 | He has owned George Weston for quite some time. They believe that this company is making structural changes to really position their business for the long term and to truly compete with Walmart and any one else that wants to come into the country. Giving investors a unique opportunity to buy Weston and Loblaws. Great long term conservative well run companies. Prefers to buy below $85.00 | 2006-03-08 | ||
| HOLD | Royal Bank | RY-T | 88.500 | Has done a great job over the last little while. Not adding at this time as the banks are trading at about 3 X book value. Would be more interested if they had a little bit of a pullback to 2.5 X book value. | 2005-12-02 | ||
| BUY | Willis Group Holdings Ltd. | WSH-N | 37.500 | The 3rd largest insurance broker in the world. The big opportunity for this company is that Marshall McLennan, which controls about 30% of the brokerage market, has had some problems with the regulatory bodies. Very lucrative business. | 2005-12-02 | ||
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| TOP PICK | Cognos | CSN-T | 39.190 | Very well positioned in the business intelligence space. This is a consolidating space where large businesses are centralizing and this is the best company for that. | 2005-12-02 |
