Constellation Software Inc. (CSU.TO)

Utmost confidence in management. Massive compounding shareholder value over time. Recent results were good. Behind the pace on M&A goal for the year. Could be getting lost amidst AI-driven stories. Vertical markets mean its organic growth rate is low.

He continues to be long and strong, not concerned by recent pullback.

Very aggressive M&A strategy. Some of the best capital allocators in the business. Optimizes costs in acquisitions to increase margins, but doesn't necessarily invest in growth. So organic revenue has struggled, and we need to analyze how long this will last. Vertical synergy strategy works well.

Key metric to look for is reacceleration of organic revenue, rather than just M&A revenue.

Really big move, a leader to the upside. Now showing signs of stalling and breaking down. Reaffirms his view that we're in a corrective phase. Moved below the 200-day MA, not a great sign. Doesn't mind nibbling here, but expects a better opportunity in the next 1-2 months as we get through September and even into October.

He'd definitely be looking to add around $4250, the support level of the tariff tantrum back in April. 

12-month price target of $5290. Definitely can buy it here, but also around $4200. Don't go all in today. Fantastic report on Monday. The slide is probably due to people taking some profits plus options trading.

It is a really good name to own and is a champion in Canadian equities. He is not concerned about a dwindling number of software companies for it to buy and feels there are still plenty.

Can't argue with the chart. Now hitting its old high. Sort of levelling off, might be in one of those consolidation periods. It did this back in 2022. Net-net the stock's been in an uptrend for a long time, no reason to be concerned. 

The chart shows a definite uptrend, but the most recent high has stalled at the early-2025 high. That's okay. It's consolidating. Normal. If we break the current level, we're likely in for another run upwards. Hold if you already own. If not, keep an eye on the last low of $4,500.

He'd pick CLS, as it's in a nice upward trend with more potential upside a year from now. CSU is at a record high, which might be hard to get above.

Phenomenal compounder. Unique business model. Via its capital allocation infrastructure, king of doing the small deals that private equity can't do. Grows at an exceptionally high rate, rarely goes on sale. Look at its price to cashflow, with 3% being his threshold free cashflow yield. Right now, it's around 2.3-2.5%, which is above his buy price.

Definitely buy on a pullback, and hold for a very long time.

She really likes it . It has done a good job of acquiring and managing niche companies in the vertical market business. Also organic growth has increased. Has strong free cash flow. Return on Capital is one of the best in the market. Scores 9 out of 10 on fundamentals.

Founder-run, founder-owned. Very strong and consistent ROIC. Doesn't require a lot of capital growth. Uses a bit of debt, but it's done very effectively because it's able to generate such strong returns. Decentralized model lets them download capital allocation decisions from head office to the business units. Only drawback now is valuation, but quality does cost.

For long-term-focused investors, there really is no better company on the planet. High-quality, exceptional business.

Owns 1,000 software businesses through acquisition. Lots of growth going forward as it buys more. Sees more spinoffs to come. Mark Leonard is best capital allocator in the world, and partnering with them is how long-term investors make a lot of money. See his firm's deep-dive podcast on this name at baskinwealth.com. Yield is 0.11%.

A rather mysterious and opaque company. Well held, well owned, and people hold onto it for dear life. Massive compounder of 36,000% since the IPO in 2006. Acquires mission-critical, vertical market (narrow of scope -- such as an operating management system for a vet clinic or daycare or golf course) software companies. 

Tuck-in acquisitions are usually founder-led, mom & pop software companies. They keep the incumbent management team and equip them with operating efficiencies. Hundreds of acquisitions a year. Compound EPS growth at 24% over the last decade. Stock's richly valued as always at 40x PE. Fair combination of value and growth. Can't quarrel with the track record. Yield is 0.11%.

The chart looks mahvelous ;)  It's in an uptrend, and the trend is your friend till it ends. Try to buy on the dips that approach the trendline. He's near-term cautious on the markets, so it could pull back closer to trend; if it did, he'd be all over it. If you own it, don't bother selling on the dip.

She doesn't know why either :)  Valuation is pretty high. Strong management team. Her firm stays away from companies that are just focused on M&A growth. M&A works until it doesn't. As a company gets bigger, so do the acquisitions in order to move the needle.