Constellation Software Inc. (CSU-T)

She doesn't know why either :)  Valuation is pretty high. Strong management team. Her firm stays away from companies that are just focused on M&A growth. M&A works until it doesn't. As a company gets bigger, so do the acquisitions in order to move the needle.

Claim to fame, and with tremendous success, has been to buy stable and cash-growing assets at the right price. One potential negative is whether it's hitting the law of large numbers? Now it needs larger deals to run the same playbook, and at a time when sophisticated private equity is starting to do the same thing.

Valuation is not cheap by any stretch, but you have to look at free cashflow per share and compare the growth. PE tends to be a bit messy with depreciation. Not as exorbitant as the PE ratio would suggest. Core position in Canadian portfolios.

Can't buy it that often, as it typically trades at a very high valuation. He sets a limit order for this one, and on very volatile days it tends to get filled. For the long term. Yield is 0.1%.

One of a kind. One of the best compounders in the world. Big misconception is that the total addressable market is not that big. Fear that can't deploy capital for the same rate of return going forward as it has in the past. He very much disagrees with that. 

The addressable market is huge. Of course with a larger acquisition, you can't expect the same 25-30% after-tax rates of return. But on a blended basis, can still compound at very high rates of return. Yield is 0.13%.

He targets $4,900. It hasn't been hit like Shopify or Celestica, because CSU has so many horizontals. Microsoft has a software that is applied in many ways, but CSU is different. CSU applies their various software to specific industries, like a healthcare vertical/software. This diversification lowers volatility. Likes it.

Best software company in Canada. Growth by acquisition makes him pause, as things go well until that final acquisition hurts. Great job buying and integrating businesses. Growth being priced at an excessive premium. Solid growth but high, 40x multiple. 

Awesome compounder, strong uptrend. Only concern is that if we are, indeed, late cycle, infotech is going to be at risk. Don't put too much new $$ to work here. Wait for the bigger correction of a hefty 15-20%, likely later this year.

This name has a higher beta, and beta tells you how sensitive a stock is compared to the market.

The 3-year chart shows an upward trend. The 1-year is also a good chart with support at $4,200. Importantly, the stock is bouncing off that support. Looks pretty good.

It is still growing by over 20% per year and trailing less than 20 X earnings. He is looking for a stock price 20 to 25% higher a year from now. It is getting international notice. Acquisitions are generally small and not big company changing ones. It is the best roll-up stock in Canada and one of the most attractive companies for new investors to buy. They don't do analyst calls.

The chart is absolutely flowing, but don't buy it now. Don't write any calls, because the stock could take off. Try it at US$3,300 or $3,200 or $3,100. There's support at C$4,200, then $3,750--it shouldn't fall below this.

 A beautiful chart. Let it run. But next year, he expects a correction, 15-20%. However, you can nibble at this now to build a position.

The valuation is always high, that's the problem (88x trailing PE, 50x forward). CSU needs a lot of acquisitions, but it has rewarded shareholders. He prefers Open Text of CGI.