Constellation Software Inc. (CSU.TO)

(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.

(A Top Pick Dec 24/13. Up 56.36%.) There has been no technical analyst that has pounded the table on this over the last 5 years, and yet it keeps going up and up and up.

Chart shows a strong uptrend from 2011. Anything technology driven tends to do quite well over the earlier part of the winter. He is very long on the tech stocks right now. It may be a tiny bit ahead of itself, but generally speaking up is good and down is bad.

(A Top Pick Oct 18/13. Up 81.67%.) Showing a lot of vitality. The current year’s growth rate is something like 35%-40%, and is expecting them to grow by at least 20% next year.

Growth by acquisition. Have done a very good job historically of buying companies. Ranks in the top 25% of his quantitative database. On a price to cash flow basis, it is trading about 14X 2015 earnings estimates, which is above the typical company. There is about a 13% cash flow growth forecast for 2015. He thinks they will continue to have organic growth as well as growth by acquisition.

Does not own it, but it is a hard company to bet against. Very high return on invested capital. They’re acquiring smaller companies. Their valuation allows them to do very accretive deals. It is expensive for his taste. Over the long term this is probably a good bet, however. The PE is over 20 today and he would get more interested at 15 times. It has been a great winner for growth investors.

(A Top Pick Oct 18/13. Up 61.96%.) His target price for the end of 2015 is $400. They are the best allocators. Have a strong balance sheet. If you are only going to own one stock in Canada right now, this would be it. Trading at 16.5X 2015 earnings, and is growing at 30% a year.