Jordan Zinberg Lumine Group LMN-X PAST TOP PICK Jul 26, 2024

The specialize in carve-outs, but the valuation is climbed too high since the company spin out.

Used to own. Sold on valuation, which is higher than CSU or TOI. Higher risk but higher reward because its deal sizes are so big. At the high valuation, wasn't worth the risk to own anymore. See his Top Picks.

It is a spin-off from CSU. It specializes in carve-outs and the advantage is that the selling company is not necessarily looking for the highest price. It has run up a lot so the evaluation is quite rich. 

Acquisition integrated extremely well. Has proven whole business model. One of the bests compounders in Canada. Increasing opportunities to deploy capital. Expecting another acquisition this year. Very strong buy at these levels.

Ideal would be to own the whole ecosystem of LMN, TOI, and CSU. But LMN is the most exciting one today.

Slowdown in M&A on this name, so it's lagging both CSU and TOI. And that's why he chose it this time around. As soon as the M&A picks up, stock should rerate higher. High quality. No dividend.

(Analysts’ price target is $52.67)

Always start with the big picture chart (3 years at least), and then move down. This 3-year chart is in an uptrend, so now we can go back to the YTD chart. Broke out of its base, but has pulled back from the uptrend. Don't want to see it break the previous low, and we're there today. 

If it bounces up, that's good.

TOI would be his choice, mainly based on geography in Europe (which is still expressing value) and its runway is a bit better. The strings for both are actually being pulled by the parent CSU.

Encompasses 20 companies, software geared to media and communications. 12-month price target of $56. Don't buy here. If you own it, sell come short-dated calls around $55-60.

Prefers to stick with the parent company, Constellation Software, but LMN is fine. AI will be fine for software companies like this.

Likes it a lot. AI will benefit vertical market software companies and hurt only those companies doming something simple on the surface. The market has it wrong about AI and software. Lumine will see margins expand, and has many opportunities to buy companies. In the past year, they made a buy purchase and increased margins in a short period of time.