As far as Canadian technology companies go, Constellation Software (TSX:CSU) continues to be one of my top picks I think investors should consider right now.
This company has an impressive growth via acquisition model historically. Constellation has done an excellent job of consolidating a relatively fragmented software sector. There happens to be thousands of small-cap companies just ripe to be acquired, and Constellation is the company that, often, steps up to the plate and takes a swing.
The thing is, Constellation has done an amazing job of hitting home runs. This is a company that has produced absolutely stellar returns on invested capital for investors over a very long time. These sorts of returns are reflected in the company’s parabolic stock chart. The thing is, this stock hasn’t been one that has run up recently and might correct. Rather, it’s one that has held a parabolic shape for over a decade.
The historical outperformance Constellation has shown, in addition to an absolutely enormous potential market for additional acquisitions, makes this company a "must" own for long-term growth investors. I personally haven’t seen a management team so adept at making acquisitions in my investing career.
This company’s ability to generate outstanding cash flow growth and earnings (that’s right, it actually makes a ton of profit) make Constellation a standout among its peers, many of whom are struggling to make a strong profit despite similar (or even higher) valuation increases in recent years.
Invest wisely, my friends.
