Constellation Software Inc. (CSU.TO)

At some point you get too big and the growth numbers come down. Maybe the pause in the last few months was the market seeing this coming. He is not sure on this one.

Still likes this and would have no problem recommending it. Stock seems to be performing well. An outstanding great buy and hold company.

This stock hits 2 of his biggest metrics, price momentum and value. Scores in the top 10% in momentum and in the top 20% on value. ROE is off the charts at 50%, and has historically had a strong Return on Equity for a long period of time. This doesn’t look expensive on a multiple basis.

(A Top Pick Oct 24/14. Up 84.82%.) The management team is so good at allocating capital.

This continues to see all-time highs. It is really a story of making the right acquisitions and integrating them into their suite of other companies that they have. Have executed extremely well and doesn’t see any reason why that will not continue. The risk is that you are paying such a premium because the stock price has run up so much, but it is a growth name and you could have said that a year or 2 ago and missed out on some good gains. Trading at 26X estimated earnings, which is justified because of the future momentum or the acquisitions being digested.

This has been a great story. The caution for him is that it is growth by acquisition. The growth they have been showing really comes from a number of acquisitions, and most of them have gone extremely well. He prefers to have his technology investments in the US where there is a lot more geographical diversification and a lot more size and scale. He would be very cautious on this.

(A Top Pick June 19/14. Up 100.22%.) Currently this is correcting with the rest of the market. A fabulous business model and an extremely competent/astute management team. It has had a big correction, so you are getting in at about $500. They are raising debt right now, presumably to make some acquisitions. They are really smart allocators.

Looking at the chart, obviously this has been a good stock to own. There are no reasons to Sell. A great looking chart.

This has done a phenomenal job. Probably one of the highest compound return stocks in the last 3-4 years. They can probably continue to do what they are doing, but not at the same rate. He is happy to continue holding this.

When he originally recommended this, it was on 7 or 8 times earnings, but is now on about 28 times earnings. Considers this management to be the best capital allocators in Canada. They are raising debt right now, and why would they be doing this if they were not going to be doing big acquisitions. You won’t know about these until the morning the press release comes out, and the stock will pop.

Bought at the IPO and he kept selling half as it has had a fabulous run. He finally sold the rest of it. It is a growth by acquisition story and when you keep adding verticals you eventually run out of critical mass. Prefers OTC-T.

They go out and buy software companies and let them do their thing. It is like a private equity company. It is an acquisition story.

Record high today. Has had an incredible run. Growth is still impressive. Organic and growth by acquisition. 3% free cash flow yield and 19% return on assets. The stock is less volatility than others on the market. 20% growth expected this year and 22% next year. 1.14% dividend yield.

(A Top Pick March 18/14. Up 44.13%.) Still buying today. The risk is that at some point the growth slows down, but in this case, it won’t be like a hay stack where it rolls over, but will just slow down because they got to a certain size. Did a bond issue last fall indicating they could be making an acquisition. They are brilliant capital allocators.

This is a growth by acquisition. There is going to come a point where there is compression in the earnings, but the whole sector is not experiencing this right now. The whole sector’s in a bull market and it is going to stay there.