Paul Tepsich Firstservice Corp FSV-T HOLD Apr 25, 2016

Low capex, lots of free cashflow. Small market share, but lots of opportunity for acquisitions, which they're very good at. Contracts have inflation escalation built-in. Customers are locked into 3-5 year contracts.

It is involved in property management and franchise divisions. It is one of the largest players in the property management side and is also large in the U.S. It can grow by acquisitions and is good at integrating them.

A great Canadian company. A low capex business that grows organically and through tuck-in acquisitions. They execute very well. Definitely buy on pullbacks.

Compounded revenues at 19% a year for the last 5 years, part organic and part acquisition. Loves this type of company. Recent acquisition of US roofing company gives it another vertical. In property management, restorations, home renovations. Not cheap and never will be. Quite attractive here.

It has done well growing and expanding across the country. Most of their clients have enough personal real estate so he prefers not to have it in their portfolios as a way of diversification. There is some volatility as it vulnerable to a major downturn in real estate prices.

On his watchlist. Trophy of a company. Never cheap but has pulled back, now a less demanding multiple. Quality compounder, strong management, large addressable market, dominant position. Pullbacks are buyable.

Surprisingly, hasn't met his goals for return performance. But starting points do matter, and it ran up dramatically prior to pandemic, so maybe it got a little pricey. Restoration business suffered due to good weather. Long-term thesis. Serial acquirer. ("Genius") founder run and owned.

First bought in 1998. It had a simple strategy, and was overlooked in the market. Over 26 years, has executed its strategy bigger and bigger -- buy into a new market, buy a business that fits in, build that position. Repeat. Grows at 4% per annum, and a further 15% or so a year because cash generated is not needed to maintain the business.

Really well run, very good compounder. Likes the business, always on his watchlist, but it always trades as such a rich valuation. Strong growth profile, but valuation exceeds it. If you can get it at the right price, hold for a long time because huge runway ahead.

Largely insulated from tariffs, as services take place locally whether Canada or US. Only hiccup would be if housing materials were hit by tariffs; still, labour costs (not subject to tariffs) are the bulk of renovation expenses. Would be sensitive, however, to a broader economic turndown.

Loves what management is doing. Slower US economy and high interest rates have slowed home-related businesses. Reported very strong earnings and strong guidance, stock pulled back (not sure why). Excited by the long-term runway.