Constellation Software Inc.

CSU-T

TSE:CSU

1,349.99
0.01 (0.00%)
Constellation Software is a diversified software company. It is based in Toronto, Canada, is listed on the Toronto Stock Exchange, and is a constituent of the S&P/TSX 60. The company was founded by Mark Leonard, a former venture capitalist, in 1995.
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Analysis and Opinions about CSU-T

Signal
Opinion
Expert
PAST TOP PICK
PAST TOP PICK
December 24, 2019
(A Top Pick Dec 28/18, Up 52%) Really likes infotech. CSU is now consolidating, a little choppy, but it remains a core holding. He expects near-time weakness along with the overall market in January.
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(A Top Pick Dec 28/18, Up 52%) Really likes infotech. CSU is now consolidating, a little choppy, but it remains a core holding. He expects near-time weakness along with the overall market in January.
COMMENT
COMMENT
December 20, 2019
It’s a surprising story that has gone up. An expensive stock in terms of overall price. However, it is a project-by-project company so as long as the economics of the internet continues to grow, they will be fine. A good acquirer with positive results that will continue to show capital appreciation.
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It’s a surprising story that has gone up. An expensive stock in terms of overall price. However, it is a project-by-project company so as long as the economics of the internet continues to grow, they will be fine. A good acquirer with positive results that will continue to show capital appreciation.
BUY WEAKNESS
BUY WEAKNESS
December 17, 2019
Tremendous managers who acquire well and have a strong business strategy. More acquisitions to come. They deploy capital well at high rates of return. Buy on any weakness. This won't slow down; growth to come. A core long-term holding.
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Tremendous managers who acquire well and have a strong business strategy. More acquisitions to come. They deploy capital well at high rates of return. Buy on any weakness. This won't slow down; growth to come. A core long-term holding.
BUY WEAKNESS
BUY WEAKNESS
December 9, 2019
They pulled back today, which happens time to time. Their business is so diverse, so he's not worried. He would buy this on a downturn. They invest their free cash flow well. They've had a great run-up.
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They pulled back today, which happens time to time. Their business is so diverse, so he's not worried. He would buy this on a downturn. They invest their free cash flow well. They've had a great run-up.
HOLD
HOLD
December 6, 2019
A perfect medium term hold and he owns a 2% holding in his portfolio. They acquire software startups and hold them for the long term. They have acquired of 260 startups. Their 10 year return on capital is 32% annually. His price target is $1425.
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A perfect medium term hold and he owns a 2% holding in his portfolio. They acquire software startups and hold them for the long term. They have acquired of 260 startups. Their 10 year return on capital is 32% annually. His price target is $1425.
COMMENT
COMMENT
November 26, 2019
Constantly acquiring. Great Canadian name. Margins are very strong, but some are concerned with the organic growth. They have cash, and he'd say M&A will pick up next year. Complementary US name is Roper Technologies.
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Constantly acquiring. Great Canadian name. Margins are very strong, but some are concerned with the organic growth. They have cash, and he'd say M&A will pick up next year. Complementary US name is Roper Technologies.
TOP PICK
TOP PICK
November 25, 2019
A company that grows by acquisition. A $30B market cap company that grew free cash flow by 42% yoy. 16% increase in sales. Their return on capital is good and we could see 11% upside. (Analysts’ price target is $1423.00)
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A company that grows by acquisition. A $30B market cap company that grew free cash flow by 42% yoy. 16% increase in sales. Their return on capital is good and we could see 11% upside. (Analysts’ price target is $1423.00)
BUY
BUY
November 7, 2019
He really likes it. One of the best management teams. It is pretty steady up and to the right so it looks pretty nice. They acquire 'old' tech companies and share best practices. Then they take the cash flows that those companies spin out and then go and invest that cash. You can sit back and trust management.
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He really likes it. One of the best management teams. It is pretty steady up and to the right so it looks pretty nice. They acquire 'old' tech companies and share best practices. Then they take the cash flows that those companies spin out and then go and invest that cash. You can sit back and trust management.
Ryan Modesto

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Price
$1253.100
Owned
Unknown
DON'T BUY
DON'T BUY
November 7, 2019
Growth by acquisition. Appreciation slows down as acquisitions slow down. Need organic growth to keep the story going. Valuation high. The law of large numbers eventually catches up with you. Other opportunities at better valuations.
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Growth by acquisition. Appreciation slows down as acquisitions slow down. Need organic growth to keep the story going. Valuation high. The law of large numbers eventually catches up with you. Other opportunities at better valuations.
BUY WEAKNESS
BUY WEAKNESS
October 4, 2019

A software company that's really come to the forefront in recent years. A great chart with constant growth. It's done a good job of finding good growth opportunity. This will be more volatile if the market is volatile. Not a big dividend payer so more of a capital appreciation play.

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A software company that's really come to the forefront in recent years. A great chart with constant growth. It's done a good job of finding good growth opportunity. This will be more volatile if the market is volatile. Not a big dividend payer so more of a capital appreciation play.

STRONG BUY
STRONG BUY
September 24, 2019
An amazing chart. It's still in its uptrend which is consistent while the market has been volatile. CSU is entering seasonality, too. This can go higher. It's "blue sky" and he can't tell when it will stop rising.
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An amazing chart. It's still in its uptrend which is consistent while the market has been volatile. CSU is entering seasonality, too. This can go higher. It's "blue sky" and he can't tell when it will stop rising.
SELL
SELL
September 9, 2019
Biggest winner in technology in the last 10 years. He shorted this stock in the last week. Harder time finding acquisitions at the right valuation. Getting squeezed. No organic growth.
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Biggest winner in technology in the last 10 years. He shorted this stock in the last week. Harder time finding acquisitions at the right valuation. Getting squeezed. No organic growth.
PAST TOP PICK
PAST TOP PICK
July 30, 2019
(A Top Pick Aug 29/18, Up 34%) Very difficult to analyze. They serially acquire companies that have only one family of software that addresses particular vertical need in the market. CSU says there are thousands like this and now own bunches of them. CSU knows how to buy them. Their return on invested capital is terrific. It's still an attractive stock at current prices.
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(A Top Pick Aug 29/18, Up 34%) Very difficult to analyze. They serially acquire companies that have only one family of software that addresses particular vertical need in the market. CSU says there are thousands like this and now own bunches of them. CSU knows how to buy them. Their return on invested capital is terrific. It's still an attractive stock at current prices.
BUY
BUY
July 25, 2019
Doesn't need to rely on bigger deals to keep growth up. Flexible, nimble. Can do many, many small deals. Governance and corporate strategy risk is a lot lower.
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Doesn't need to rely on bigger deals to keep growth up. Flexible, nimble. Can do many, many small deals. Governance and corporate strategy risk is a lot lower.
WATCH
WATCH
July 16, 2019
Possible split? He doesn't think they will split the stock. This company has done an excellent job, but the valuation is just too rich. The yield is just a little too small too. There is a risk for a sizable retracement in this stock. Be careful.
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Possible split? He doesn't think they will split the stock. This company has done an excellent job, but the valuation is just too rich. The yield is just a little too small too. There is a risk for a sizable retracement in this stock. Be careful.
BUY
BUY
July 8, 2019
He wishes he owned it. They have a roll-up strategy in software: buy companies and integrated them well. This way, they have created tons of value, but he prefers software companies are hands-on in creating product. CSU has been a great performer though.
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He wishes he owned it. They have a roll-up strategy in software: buy companies and integrated them well. This way, they have created tons of value, but he prefers software companies are hands-on in creating product. CSU has been a great performer though.
DON'T BUY
DON'T BUY
July 4, 2019
They consolidate various software companies. They have no debt so a pretty good balance sheet. He finds it is too rich at 20 times cash flow. Also there is no centralization of services among companies acquired.
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They consolidate various software companies. They have no debt so a pretty good balance sheet. He finds it is too rich at 20 times cash flow. Also there is no centralization of services among companies acquired.
TOP PICK
TOP PICK
June 24, 2019
They buy other software companies, around 200 now and could acquire many more. Managers own a lot of stock, and that's a great sign. They know what they're doing. (Analysts’ price target is $1223.33)
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They buy other software companies, around 200 now and could acquire many more. Managers own a lot of stock, and that's a great sign. They know what they're doing. (Analysts’ price target is $1223.33)
PARTIAL SELL
PARTIAL SELL
June 3, 2019
It has been a darling stock for a long time. The just keep consolidating. They don't squeeze out much synergies. This was not the business model he was looking for over the years. They will have to make bigger and bigger acquisitions.
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It has been a darling stock for a long time. The just keep consolidating. They don't squeeze out much synergies. This was not the business model he was looking for over the years. They will have to make bigger and bigger acquisitions.
BUY
BUY
May 17, 2019
They are serial acquirers with heavy cash flow. This can continue without limit. However, they have heavy competition now. So, CSU is now increasing its balance sheet. This has done incredibly well, a no-brainer.
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They are serial acquirers with heavy cash flow. This can continue without limit. However, they have heavy competition now. So, CSU is now increasing its balance sheet. This has done incredibly well, a no-brainer.
PAST TOP PICK
PAST TOP PICK
May 15, 2019
(A Top Pick Apr 09/19, Up 1%) He still likes it. A strong chart and a great performer. The longer-term trend is up. It's consolidating these days. Expect choppiness then a breakout to new highs.
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(A Top Pick Apr 09/19, Up 1%) He still likes it. A strong chart and a great performer. The longer-term trend is up. It's consolidating these days. Expect choppiness then a breakout to new highs.
TOP PICK
TOP PICK
May 2, 2019
It has been a core holding of his for a long time. They are extremely well run. They are run by a competent intelligent operator. They acquire software companies. When they are put on the world stage they shine. They are a bit expensive right now but one you should own. (Analysts’ price target is $1176.30)
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It has been a core holding of his for a long time. They are extremely well run. They are run by a competent intelligent operator. They acquire software companies. When they are put on the world stage they shine. They are a bit expensive right now but one you should own. (Analysts’ price target is $1176.30)
PAST TOP PICK
PAST TOP PICK
April 9, 2019
(A Top Pick Feb 21/19, Up 3%) A beautiful chart and story. Good performer in the past month with new all-time highs. It's been on a sharp upswing since the start of 2019. Loves it.
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(A Top Pick Feb 21/19, Up 3%) A beautiful chart and story. Good performer in the past month with new all-time highs. It's been on a sharp upswing since the start of 2019. Loves it.
TOP PICK
TOP PICK
April 9, 2019
It's long been a top pick of his. It's made new all-time highs. Loves it. (Also a Past Top Pick today.) (Analysts’ price target is $1163.67)
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It's long been a top pick of his. It's made new all-time highs. Loves it. (Also a Past Top Pick today.) (Analysts’ price target is $1163.67)
BUY
BUY
March 29, 2019
Have to think longer term with this name. They trade at a premium valuation. This is one of the best performers in Canada. Strong management team. They have a strict focus on shareholder value. They paid a special dividend last quarter.
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Have to think longer term with this name. They trade at a premium valuation. This is one of the best performers in Canada. Strong management team. They have a strict focus on shareholder value. They paid a special dividend last quarter.
DON'T BUY
DON'T BUY
February 27, 2019
They have done well over a long time period. He thinks it may be over valued right now. Without a sizable dividend, he is staying away. With a marketcap of $23 billion, they need to take on bigger and bigger ventures.
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They have done well over a long time period. He thinks it may be over valued right now. Without a sizable dividend, he is staying away. With a marketcap of $23 billion, they need to take on bigger and bigger ventures.
PAST TOP PICK
PAST TOP PICK
February 21, 2019
(A Top Pick Aug 21/18, Up 26%) We saw a choppy consolidation. Then it broke to all time highs. He loaded up even more in late December.
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(A Top Pick Aug 21/18, Up 26%) We saw a choppy consolidation. Then it broke to all time highs. He loaded up even more in late December.
TOP PICK
TOP PICK
February 21, 2019
It just broke out to new all time highs with strong, strong volume. (Analysts’ price target is $1163.67)
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It just broke out to new all time highs with strong, strong volume. (Analysts’ price target is $1163.67)
TOP PICK
TOP PICK
February 20, 2019
At 23 times earnings, it is still good value. There is really no great competitor. They have a mountain of cash and management is well invested. They do great acquisitions, are cost conscious, and he has great confidence in their strategy. Yield 0.45% (Analysts’ price target is $1163.67)
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At 23 times earnings, it is still good value. There is really no great competitor. They have a mountain of cash and management is well invested. They do great acquisitions, are cost conscious, and he has great confidence in their strategy. Yield 0.45% (Analysts’ price target is $1163.67)
HOLD
HOLD
February 20, 2019
Another 10 bagger. Growth by acquisition. Latest quarter was way better than expected. They've now started to declare the value of the assets. There's also some organic growth. Management team's fantastic. Paid a one-time dividend, which is good, but does it mean they have nothing else to spend their money on. Hang on to it.
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Another 10 bagger. Growth by acquisition. Latest quarter was way better than expected. They've now started to declare the value of the assets. There's also some organic growth. Management team's fantastic. Paid a one-time dividend, which is good, but does it mean they have nothing else to spend their money on. Hang on to it.
BUY
BUY
February 14, 2019
They had a nice beat today and they are declaring a special dividend. They always manage to hit their numbers and have a good return on equity.
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They had a nice beat today and they are declaring a special dividend. They always manage to hit their numbers and have a good return on equity.
Jason Mann

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Price
$1129.310
Owned
Unknown
HOLD
HOLD
February 11, 2019
It is well managed. They made a plethora of acquisitions. They are making tiny ones with a model that works. Don’t sell a company doing this well, although he prefers OTEX-T, which is a more sure bet. (Analysts’ price target is $11.32)
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It is well managed. They made a plethora of acquisitions. They are making tiny ones with a model that works. Don’t sell a company doing this well, although he prefers OTEX-T, which is a more sure bet. (Analysts’ price target is $11.32)
TOP PICK
TOP PICK
December 28, 2018
The beautiful chart says it all. Going through a consolidation phase. Increased his exposure to this name. Yield is 0.6%. (Analysts’ price target is $1016.67)
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The beautiful chart says it all. Going through a consolidation phase. Increased his exposure to this name. Yield is 0.6%. (Analysts’ price target is $1016.67)
COMMENT
COMMENT
December 10, 2018
Has been a tremendous stock to own over the last decade. But the sock is quite high at a tie when it is having its largest challenges to growth. It is difficult to grow.
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Has been a tremendous stock to own over the last decade. But the sock is quite high at a tie when it is having its largest challenges to growth. It is difficult to grow.
Teal Linde

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Price
$910.710
Owned
Unknown
DON'T BUY
DON'T BUY
December 4, 2018
An enigma. Sure, their managers have grown a small company into one of the largest software companies on the TSX. Doesn't trust them, because their reporting is not transparent. Also, this is a heavy growth by acquisition story, which itself is fine, but we are in a time of rising interest rates that will weigh on this stock.
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An enigma. Sure, their managers have grown a small company into one of the largest software companies on the TSX. Doesn't trust them, because their reporting is not transparent. Also, this is a heavy growth by acquisition story, which itself is fine, but we are in a time of rising interest rates that will weigh on this stock.
HOLD
HOLD
November 16, 2018
It’s had a crazy ride. Getting sold off with the entire sector. As a holding, it looks as though it’s going higher. Hard not to see upside in the chart, it’s powerful. Unless you did it for a trade, no reason to sell it.
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It’s had a crazy ride. Getting sold off with the entire sector. As a holding, it looks as though it’s going higher. Hard not to see upside in the chart, it’s powerful. Unless you did it for a trade, no reason to sell it.
PAST TOP PICK
PAST TOP PICK
November 1, 2018
(A Top Pick Aug 21/18, Down 2%) It is one of the leadership names in the TSX but he is watching it closely for signs of a reset. You could reduce your exposure on this one. It has lost its leadership.
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(A Top Pick Aug 21/18, Down 2%) It is one of the leadership names in the TSX but he is watching it closely for signs of a reset. You could reduce your exposure on this one. It has lost its leadership.
DON'T BUY
DON'T BUY
October 29, 2018

Here is a company that has gone around buying up other software companies. Now we are late in the investment cycle. The multiple got to a high level so he would expect consolidation.

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Here is a company that has gone around buying up other software companies. Now we are late in the investment cycle. The multiple got to a high level so he would expect consolidation.

HOLD
HOLD
October 9, 2018

Tricky name. Widely owned. They have to continuously do deals to show good return on invested capital and they might make a mistake. That is his fear on this stock.

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Tricky name. Widely owned. They have to continuously do deals to show good return on invested capital and they might make a mistake. That is his fear on this stock.

PAST TOP PICK
PAST TOP PICK
September 24, 2018

(Past Top Pick Sept.18, 2017, Up39%) They will consolidate for a while. They've come off lately, but have performed well this year. Their challenge is that as they acquire software companies to grow, so they have to either buy bigger or more companies to maintain their pace of growth.

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(Past Top Pick Sept.18, 2017, Up39%) They will consolidate for a while. They've come off lately, but have performed well this year. Their challenge is that as they acquire software companies to grow, so they have to either buy bigger or more companies to maintain their pace of growth.

DON'T BUY
DON'T BUY
September 11, 2018

Net income has been flat for three years. To move the needle, they have to make a lot of or bigger acquisitions. Historically, this has done well, but today it's expensive. Management is very arrogant--it won't do a conference call with investors. He doesn't like that; communicating with investors is fundamental. No clear strategy; it's a hodge-podge of small companies.

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