Constellation Software Inc. (CSU.TO)

There is no sign of a top. He sees no reason to sell. Technology is a very good sector to be in.

The outlook is positive. They buy small software companies that give them a good return on their investment. They are an organic grower.

He was really impressed with the big spike in growth but exited in the March swoon, when anything that was highflying got hurt. Would like to get back in at some point. He would still be absolutely behind this name.

(Market Call Minute.) Great execution.

This has been a great stock performer. Even though revenue has gone from about $200 million to billions, the number of shares outstanding has been unchanged for 10 years. When you can grow without diluting your shareholders, it is brilliant. CEO owns $300-$400 million in stock. Now starting to do larger acquisitions. They have the ability to do third-party financing, where other people take the risk and they share in the profits. This is one of those great companies that you buy and 5 years later you will be happy.

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.