Greg NewmanConstellation Software Inc.CSU.TOWEAK BUYDec 05, 2025

Disappointing, still under a cloud. An AI baby thrown out with the bathwater. M&A hit a lull, but has reaccelerated. Back in gear. Very undervalued. Good opportunity.

AI was pressuring all software stocks but no more. Software is outperforming hardware now, and CSU should do well going forward. AI fears were overblown. CSU can probably use AI to improve their software. The future is strong. Their customers are loyal.

Likes that the chart is showing higher highs and higher lows, which is constructive. Improving. His bigger concern is where we are in the market cycle model, transitioning to the "peaking" phase. If we were starting a new cycle, he'd be very bullish here. But markets are up and rounding over, and he's worried about a broader pullback in the next 6-9 months or so.

You could add here, but definitely limit your risk if it gets back to recent lows. $2300 might be the line in the sand.

It's his second-largest holding. The valuation is now more reasonable. There are fears that AI will replace it, but he doesn't see evidence of that yet. CSU owns 1,500 businesses that use AI. He last trimmed it in July 2024. Buy below $3,500 for the long term. Companies can use AI to drive value for their customers.

Would buy today. Very well run. Strong defense to fears about AI -- incorporating AI to offer customers more value. Really good company, though $5k is a bit rich. Good opportunity to buy more and lower your average cost base, aiming to break even over the long term.

(This can happen to any investor -- you identify a really good company, but you buy at the wrong price. Warren Buffett is no exception, and he's bought more when the fundamentals are still intact.) The one situation where this doesn't work is with a really levered company that can go bankrupt. But that's not the case with CSU; you can buy more with confidence.

Really likes it, in their momentum mandate. Sticky recurring revenues, though lower organic growth. New CEO is very capable. M&A has reaccelerated. Back in the saddle. Pullbacks are buyable, and this is as deep a one as it's ever seen.

His firm bought it for the first time ever a few months ago around $2400-2500. All things being equal, could run up to $5000 (though $4000 is more realistic). He doesn't think all software can be replaced by AI; baby has been thrown out with bathwater.

He exited all software stocks last fall. Probably we won't see if these companies still have a business model in the face of AI till 2027 or the PE decline so far will keep these stocks where they are. CSU has recently come back 20%, but remains 30% the past year. Some investors feel that software is not dead and are dollar-cost averaging. All software, though, remains a wait-and-see story--what is the impact of AI? If software loses its pricing power, they will trade like utilities at lower multiples.

No idea over next 3-6 months where the price will be, but room to grow longer term (3-6 years). Paying 15-16x PE, and he sees it moving to double that. Business model hasn't changed. Scouring the world for software companies, whose prices are a lot less than they used to be. Niche software in 800 verticals.

They're in, and looking to add over time. Likes its economic moat.

Between February and April, looks to have put in a double bottom. Now in sideways trading range, appears to be bottoming out. Encouraging so far. Support seems in $2600-2700 range. Resistance probably $3000 to start; above that would be more a sign that a recovery trend is underway.

Hasn't aggressively turned up yet. Consolidating. So far, so good.

Canadian tech stocks look better than US ones; the latter are parabolic and overbought. This year, the chart is making gradual higher highs and higher lows. Not much momentum, but it's not bad. A value play.

He's been buying more. They face AI fears and questions over the next CEO. They are using AI in their existing businesses. They continue to buy companies. It's still great value.

Was a Canadian darling. The issue is that they don't have a dominant product. There's a fear that AI can replicate much of their software, like other stocks such as TRI. Is managed well.

Suffered from fears of AI disruption, so shares cut in half. Recent earnings, though, show 20% sales growth year over year, 6% organic growth while net income more than doubled. Sales and earnings beat. PE has risen from 15x to 18x since last Spring. Shares are seeing an uptrend.

You can keep rolling up businesses, but what happens when the music stops? Now there's AI, but it can't be a complete solution. The business model will come back at some point; in the meantime, sees it building a base.