Jason Del VicarioConstellation Software Inc.CSU.TOTOP PICKSep 18, 2017

Owns in his value momentum strategy. Doubled in the last year or so, has done very well. Mission-critical software. Grows by acquisition, not an easy task, but they've made it work.

Blown through analysts' average price target. He still owns it. Will get visibility once they report. Acquired 260 companies over 10 years, cross-sell, and keep on making money. Vertical market strategy as opposed to MSFT, which integrates horizontally. Buy 1/3 here around $3700, again at $3475, and $3300.

Excellent business with very high margins. Very strong management team with excellent capital allocation skills. Software company roll up strategy has worked out very well. ROE around 30%. Share price not cheap, so would recommend waiting for weakness before buying. 

Have done a great job. The executive team is proving itself, are top managers. The PE is quite high, though lower than Shopify's. CSU is on his radar, despite that. They are consistent. Canadian tech rallied strongly last year, including CSU.

Keeps on doing what it's doing. 2023 probably a record year for acquisitions, and more going forward. New way to increase verticals, buying software "carve-outs" rather than a whole company. See his Top Picks.

Good long term investment, but stock too expensive at current price. Wait for weakness in share price before investing. Excellent management team that is good at capital allocation. 

Share price over the 200 day moving average (not good for investors). Good business, but would wait for weakness before buying. Stock price overvalued. 

Unique business model that you can't easily replicate in the spinoffs. Valuation a bit rich at over 30x cashflow. Eventually, will be some volatility and you'll get your change to buy more. Exceptionally high growth despite its size. One of the best compounders ever created, not just in Canada but globally.

Very good company. Owns shares in portfolio. Currently trading at reasonable price to growth level. Would wait for share price to fall before buying. Excellent management team with strong tech stack. 

CSU still owns 61% of Lumina, so they're still driving the bus. Lumina geared towards media side. LMN is supposed to be the mini-Constellation. 

CSU has gone through its price target. LMN is under its price target. So LMN is probably a little cheaper.

He'd invest in all 3. Say you had $100K. He'd put 60% in CSU, and split the rest between TOI and LMN.

They acquire tech companies, granting those companies freedom to operate. They operate in an tight-lipped, unorthodox manner, like they don't host conference calls. But they compounded earnings at 2% over the past decade. Trades at 20x earnings.

Largest position in portfolio(~14%). Excellent company. One of the best compounders in the world. Roll up strategy of software. Founder led and owned. Only problem is that stock is expensive. Good for long term investors. Very strong management team. Able to re-invest 100% of cash flow into M&A. 

You have the Magnificent 7 south of the border. This is Canada's Magnificent 1. Slow and steady. Acquires at good prices and then grows internally. In clients' TFSAs. Great company. Sold SHOP and deployed to this. Makes sense to hold, if it's not too big a weight in your portfolio.

If you're determined to get in now, buy half a position and then look for weakness down the road.

Very disciplined approach to acquisitions, which they integrate and manage very well. Strong management team. Rights offering raised $280M so they can pay down debt and still have money in their jeans. Tech valuations have come down, so it will be on the hunt for opportunistic acquisitions, which is positive. Yield is 0.19%.

Exceptional compounder. Difficult business model to replicate. Product risk is exceptionally low because it's so diversified. Have to be disciplined on price, don't buy here. Keep your eye on and add on a pullback.