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
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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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.

HOLD
HOLD
September 7, 2018

One of the best run tech companies. Growth by acquisition. Not cheap at 35x earnings. Beautiful chart. Top-drawer management. If you’re not worried about the valuation, it’s fine to own it.

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One of the best run tech companies. Growth by acquisition. Not cheap at 35x earnings. Beautiful chart. Top-drawer management. If you’re not worried about the valuation, it’s fine to own it.

TOP PICK
TOP PICK
August 29, 2018

They've bought a lot of little companies that specialize in "vertical applications" which fulfill a single purpose and do it well. They then divided them into six divisions they manage. They could aquire far more, so they have a big possibility of growth. The street didn't like their last quarter, but investors should look at the long-term: can they use their capital wisely to make these acqusitions? Yes. Based on the past, they are smart acquirers with 31% ROE on these purchases. Smart managers. (0.5% dividend, Analysts' price target: $1,073.58)

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They've bought a lot of little companies that specialize in "vertical applications" which fulfill a single purpose and do it well. They then divided them into six divisions they manage. They could aquire far more, so they have a big possibility of growth. The street didn't like their last quarter, but investors should look at the long-term: can they use their capital wisely to make these acqusitions? Yes. Based on the past, they are smart acquirers with 31% ROE on these purchases. Smart managers. (0.5% dividend, Analysts' price target: $1,073.58)

TOP PICK
TOP PICK
August 21, 2018

As long as its longer-term uptrend remains intact, he'll continue to like it, and consider the near-term pullback as a buying opportunity. (0.6% dividend, Analysts' price target $1,083.64)

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As long as its longer-term uptrend remains intact, he'll continue to like it, and consider the near-term pullback as a buying opportunity. (0.6% dividend, Analysts' price target $1,083.64)

STRONG BUY
STRONG BUY
August 3, 2018

This is a good time to buy, he thinks. Growth has been exponential and there is a pristine balance sheet. There is no problems with this company and is a very attractive buy. He thinks the lack of quarterly updates is reasonable as he thinks people should not focus on the last 90 days performance.

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This is a good time to buy, he thinks. Growth has been exponential and there is a pristine balance sheet. There is no problems with this company and is a very attractive buy. He thinks the lack of quarterly updates is reasonable as he thinks people should not focus on the last 90 days performance.

HOLD
HOLD
July 27, 2018

They reported earnings recently and the stock is down as a result. They are moving away from quarterly management calls and thinks this is strange. They are trying to make acquisitions and may have felt they were giving away too much information. A great stock to own, continue to hold it for the long term. It is cheaper than similar quality tech companies in the US.

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They reported earnings recently and the stock is down as a result. They are moving away from quarterly management calls and thinks this is strange. They are trying to make acquisitions and may have felt they were giving away too much information. A great stock to own, continue to hold it for the long term. It is cheaper than similar quality tech companies in the US.

DON'T BUY
DON'T BUY
July 23, 2018

It is a really well run software company. They buy up companies and cut costs. The market has awarded them a very high valuation multiple and they may have trouble continuing to grow as quickly.

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It is a really well run software company. They buy up companies and cut costs. The market has awarded them a very high valuation multiple and they may have trouble continuing to grow as quickly.

DON'T BUY
DON'T BUY
June 27, 2018

He held this for close to seven years, but sold it back around $700. He thought their niche was based on smaller acquisitions, which no longer works at this scale of business – it is hard to move the needle now.

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He held this for close to seven years, but sold it back around $700. He thought their niche was based on smaller acquisitions, which no longer works at this scale of business – it is hard to move the needle now.

TOP PICK
TOP PICK
June 20, 2018

Despite the rapid share price rise, he still thinks they are undervalued. They have been acquiring companies very profitability. As long as they compound shareholder wealth at 30%, their cash ROE is almost 100%. Don’t be put off by the high 60 P/E ratio. Yield 0.5%. (Analysts’ price target is $964.42)

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Despite the rapid share price rise, he still thinks they are undervalued. They have been acquiring companies very profitability. As long as they compound shareholder wealth at 30%, their cash ROE is almost 100%. Don’t be put off by the high 60 P/E ratio. Yield 0.5%. (Analysts’ price target is $964.42)

BUY
BUY
May 31, 2018

First Canadian company trading over $1000. The chart looks really good from the early-April rally point. It is looking a little over-extended and could be subject to a pause. A 50 day moving average would be a good reduce point to lock in gains and the 100 day as a stop.

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First Canadian company trading over $1000. The chart looks really good from the early-April rally point. It is looking a little over-extended and could be subject to a pause. A 50 day moving average would be a good reduce point to lock in gains and the 100 day as a stop.

HOLD
HOLD
May 2, 2018

Insiders own a fairly large chunk of the stock and there have not been many share offerings. Management must invest directly in the stock – not just through stock options. They continue to deliver and have a great balance sheet. If you own it, you probably don’t want to sell it.

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Insiders own a fairly large chunk of the stock and there have not been many share offerings. Management must invest directly in the stock – not just through stock options. They continue to deliver and have a great balance sheet. If you own it, you probably don’t want to sell it.

COMMENT
COMMENT
May 2, 2018

Acquisitions grow this company. Problem is, to continue growing at this pace, they must accelerate acquisitions, and it's getting harder for them to buy companies at the right valuations. Constellation itself has a high valuation which scares him off. That said, management is good at delivering growth.

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Acquisitions grow this company. Problem is, to continue growing at this pace, they must accelerate acquisitions, and it's getting harder for them to buy companies at the right valuations. Constellation itself has a high valuation which scares him off. That said, management is good at delivering growth.

DON'T BUY
DON'T BUY
April 16, 2018

They have done exceedingly well at growth by acquisition. It is valued for a continuation of a very high rate of growth. It could be vulnerable to more of a setback. Organic growth has not been as high recently as expected.

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They have done exceedingly well at growth by acquisition. It is valued for a continuation of a very high rate of growth. It could be vulnerable to more of a setback. Organic growth has not been as high recently as expected.

COMMENT
COMMENT
January 23, 2018

This trades outside of the multiples he would normally look at. At 60X, you have to ask yourself what sort of growth rate do you need to justify that kind of multiple. This company has basically existed on the acquisition strategy, and it trades outside of the multiple norms that he would normally look at.

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This trades outside of the multiples he would normally look at. At 60X, you have to ask yourself what sort of growth rate do you need to justify that kind of multiple. This company has basically existed on the acquisition strategy, and it trades outside of the multiple norms that he would normally look at.

COMMENT
COMMENT
December 21, 2017

He thinks the growth from acquisition is going to continue. Doesn’t look like they overpaid too much on their acquisitions. Still generating descent return. Not ridiculously overpriced. Balance sheet is quite good for a company that has done so many acquisitions. Think it’s in pretty good shape.

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He thinks the growth from acquisition is going to continue. Doesn’t look like they overpaid too much on their acquisitions. Still generating descent return. Not ridiculously overpriced. Balance sheet is quite good for a company that has done so many acquisitions. Think it’s in pretty good shape.

Matt Kacur

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Price
$767.230
Owned
Unknown
PAST TOP PICK
PAST TOP PICK
December 4, 2017

(A Top Pick Oct 20/16, Up 26%) one of his largest holdings. The best capital allocator in Canada. They upped their acquisition game, typically smaller companies. As they get bigger they either need to be acquiring larger or more companies to keep up with their growth rate. A tremendously run company. He still likes them.

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(A Top Pick Oct 20/16, Up 26%) one of his largest holdings. The best capital allocator in Canada. They upped their acquisition game, typically smaller companies. As they get bigger they either need to be acquiring larger or more companies to keep up with their growth rate. A tremendously run company. He still likes them.

BUY WEAKNESS
BUY WEAKNESS
December 1, 2017

They started buying some Canadian stocks because of companies like this. Great looking chart, maybe a little bit off the trend line. There could be a little pullback, and this could be an excellent buying opportunity if it does in fact have pull back. The Canadian tech sector is a little bit overlooked, and Canadian tech companies are a little less appreciated than their US counterparts.

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They started buying some Canadian stocks because of companies like this. Great looking chart, maybe a little bit off the trend line. There could be a little pullback, and this could be an excellent buying opportunity if it does in fact have pull back. The Canadian tech sector is a little bit overlooked, and Canadian tech companies are a little less appreciated than their US counterparts.

HOLD
HOLD
November 22, 2017

A great company and very well-managed. A consolidator of software companies, and their strategy continues to work. (See Top Picks.)

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A great company and very well-managed. A consolidator of software companies, and their strategy continues to work. (See Top Picks.)

COMMENT
COMMENT
November 13, 2017

CSU-T vs. FIH.U-T vs. GOOGL-Q. You have several different options here. He likes FIH.U-T’s exposure to India. He thinks India is one of the great overlooked growth stories. GOOGL-Q is one of the death stars. It has run to quite an extent. He thinks it has a good year to run yet. This is one that will be around in one form or another for a long time.

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CSU-T vs. FIH.U-T vs. GOOGL-Q. You have several different options here. He likes FIH.U-T’s exposure to India. He thinks India is one of the great overlooked growth stories. GOOGL-Q is one of the death stars. It has run to quite an extent. He thinks it has a good year to run yet. This is one that will be around in one form or another for a long time.

DON'T BUY
DON'T BUY
October 25, 2017

A very successfully run company. They’ve been very successful with their acquisitions. In term of a technology company they’ve done very well. From a value investor perspective the multiple is a little out of reach. Feels it could be very vulnerable to a significant downturn in the market and wouldn’t recommend buying at this point.

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A very successfully run company. They’ve been very successful with their acquisitions. In term of a technology company they’ve done very well. From a value investor perspective the multiple is a little out of reach. Feels it could be very vulnerable to a significant downturn in the market and wouldn’t recommend buying at this point.

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