vendredi 6 août 2021

Constellation Software reaches 2000$

One of the most beautiful things I've seen - thanks to the investment world - is Jason Del Vicario shirtless. I've seen him a few times like that and, holy macaroni, it was beautiful. I sometimes wake up at night, completely wet. That guy is the real thing. 

But on a purely capitalist level, the best thing I've seen - thanks to the investment world - is the performance of Constellation Software (CSU.TO). 

When I bought 65 shares of CSU in march 2012 for about 88$ a share, I didn't think that I'd keep my shares for 9 years (actually, I sold some of them, but I've always kept some). I didn't think either that these shares would be sold for more than 2000$ less than 10 years later. 

That's almost a 25 bagger for me. My best investment ever. 

CSU has always been expensive and still is. But, all high-quality stocks are always expensive (except for some short periods during a crisis or after disappointing results). In other words, if you don't have problems paying 40 times next year's earnings for Mastercard, you shouldn't have problems to pay slightly less for CSU. You want a lamborghini? You have to pay the price. 

Here's a few interesting numbers about CSU:

At the end of 2011, CSU's free cash flows were 130M US$

At the end of 2020, CSU's free cash flows were 1161M US$

That's about 9 times more, which is excellent. But the stock price was multiplied by 25 or so. Which means that the PE multiple increased a lot during the same period (the Forward PE went from 10 to 40). Which means that the market now recognize the excellence of CSU. That's how it works: the more you wait to be sure that a stock is good, the less risk you take but you let go some performance. 

I don't think that a share of CSU will be sold for 25 times it's current price in 2030 (46 000$ a share). However, I'm pretty sure that the stock will at least triple before 2030. I may be wrong, but how could a stock among the 1% of best stocks in the whole wide world could go from amazing to bad, or even average in a short period? Yes, it could happen, but chances are pretty low. 

So, my prediction is much more conservative than if I tried to predict the price of some not-so-excellent company.  

Great company 9 years ago, great company today. 

6 commentaires:

  1. I bought topicus at 90.. would u take some of your proceeds from constellation and invest in this spin off ?

    1. If I had to invest in Topicus, it would be from something else than CSU proceeds.

  2. I'm tracking Topicus myself (I love spinoffs) but am waiting for some market weakness before I buy...and yes Constellation is one fabulous company that I unfortunately missed out on...Well done Penetrator...

  3. I like the fact there are no analysts following this company , and I plan on holding for a long term hold . Only one part of a diversified group of stocks I own .. good luck either way .

  4. You and I bought around the same time. I sold some at $200 but still have the rest - 40 shares

  5. t'es fou... first screened it at $70... didn't pile in until $200... NEVER sell a company that compounds FCF at 20%+/year consistently. NEVER. In our Balanced Model we currently have 6% CSU, 6% CSU.db and 2% TOI (Our Focus Model is 10% CSU (max I am allowed) and 2% TOI). And people (well, not our clients!) throw darts at me suggesting I'm too concentrated. Honestly, I feel like we should have more CSU.