Constellation Software Inc. (CSU.TO)

The CEO is trying to be one of the few guys that actually can make an acquisition story work long term. They are going through trials right now because they issued a dividend and are now talking about possibly re-tracking it back if a bigger company came along that he could acquire. You can only acquire so fast, and then you’ve got problems and issues and legacies of stuff you are acquiring.

Has had a correction back from the $270 level. Just announced a new way of financing themselves, which takes away an equity overhang on the stock. Also, the new financing means that they are looking at some big acquisitions. This is going to solve the problem for people that are worried about an equity issue. This grows at 50% a year.

Got stopped out on his holdings. This is a fantastic growth name that he is going to come back to shortly when it settles down.

This is a growth/momentum name and is still above his model price of $220. This is a 16% downside. On any dip, it would be of interest to him but too expensive right here.

(A Top Pick April 3/13. Up 113.04%.) Continues to rock. One of the best capital allocators in the market. A superb franchise. Fantastic management team. A stock that you could sleep at nights with. It should certainly be able to continue to outperform the market for the foreseeable future. Generates a lot of cash flow. Can see $350 in a year.

Stock has more than doubled over the last year. Their whole purpose in life is to basically acquire companies and take the free cash flow, ploughing it back into other companies. Free cash flow yield is 2%, which is a B minus compared to the whole database. Year-over-year earnings growth was up 32% in October. Estimates have risen by 5% over the last 90 days. Earnings are expected to grow by 27% this year, so the PE of 19X against that, gives you a .7 PE to growth ratio. Generally speaking, a PEG of less than 1 is considered attractive.

(Market Call Minute.) This is a rollup, much the same as Valeant Pharmaceuticals (VRX-T) but Valeant is much cheaper. This stock closed at $223 and his model price is $181, 18% lower. Wait for a pullback.

Quite phenomenal just how well this company has been run, and how well their acquisitions have improved their earnings. In making acquisitions, the challenge over a period of 5 years is finding big competitors that want to be acquired. These are the challenges this company is going to face over the next couple of years. This looks fully valued to him.

Specialty software company that buys niche companies in niche businesses.

15 times cash earnings growing at at least 35%. Best performing large cap stock in Canada over the last 5 years. Made an acquisition a week ago that will contribute 15% growth on their current base of earnings.

Been a tremendous story. Likes the management team. Growth through acquisition. Multiple is high but they have done a good job. Don’t sell here.

Fantastic company. Run very well making acquisitions of technology companies and rolling them in. Going to be a good stock for a long time. He has been waiting for an entry point for a long time. As they get bigger, they can make more and bigger acquisitions, accelerating their growth plans. Thinks they have a pretty decent runway for the next little while.

Hit a new five-year high. Volume was 72,000 that is normally 33,000. Trending higher. He would be careful as it is a thin trader. There are some money managers that favour this stock. Any bad news on earnings and there will be a rush for the exits and he wouldn’t want to be in the way. Very expensive and he feels there are better places to be.

Look at the chart. Another good year for the chart, 10 fold rise since ’09. 39% return on equity. RBC raised their target price.

Probably the smartest software guys in Canada, but smart from an acquisition standpoint. They are not focused on the growth side. Their whole thing is growth by acquisition. When a stock gets to be 14 or 15 times EBITDA he really looks for the Exit sign. He did on this one but was way too soon. Thinks it will always have a premier cachet to it. If it pulled back to $140, he would be looking to buy it.