Constellation Software Inc. (CSU.TO)

We would not rule the company out, certainly. It knows its space and of course its historical record is impressive. It will not just sit around and watch AI. The company plans an update next week which we will attend, to discuss its AI initiatives and opportunities, as well as risks. We would give it a 7/10 for a buy rating right now. There are always risks, but the negative sentiment shift has been greater than the fundamental shift here, at least so far.
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Huge fan. The downturn is a blip and a major buying opportunity. The market misperceives that AI will hurt vertical market software companies. No, it's the complete opposite whereby these companies will benefit from AI a lot. You can't displace these companies easily. We will see serious margin expansion and an uptick in innovation.

Quite volatile chart, but you can deal with that if you have it in the right (low, perhaps 1.5-3%) weighting in your portfolio. He'd definitely step in again today, as it hasn't participated in the recent rally.

He entered at $1,000, so is pleased. Software is a good business--don't need business or computers, just the code. The valuation remains cheap. Good management and fundamentals. He see many years of acquisition growth. Is a core holding.

Loves the business model. Management is phenomenal. Concern is valuation at high 20s free cashflow multiple, which implies earnings yield to shareholder of 3% and change. Based on its size, how many more acquisitions can it make to move the needle? As a value manager, hard for him to buy.

The challenge he always had with CSU is the continuous rush to buy small companies that don't add value. He wants to see spin-outs and silos to get rid of non-core businesses.

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.