2Semana·

Constellation Software: Over 30% correction - time to stock up?

I am currently working with Constellation Software $CSU (+0,78 %) and am wondering whether the market is currently overreacting here. Since the all-time high of over CAD 5,300, we have fallen to around 3,200 CAD down.

Why the sell-off?

Leonard's departure: Mark Leonard has stepped down as CEO for health reasons. He is the legend behind the model.
AI fear: Fears are rife that Gen-AI will disrupt the small niche software builders.

But:

While the share price is crashing, FCF recently rose by a whopping 46 % rise.
The EV-to-FCF ratio is currently approx. 20 - a level that we have not seen for years. By comparison, we usually had to pay a multiple of 30+ for this quality.

(Source: Marketscreener)

To me, this looks like a classic "scissors" situation: The fundamentals (cash!) continue to grow, but the share price collapses due to emotional news. Is the business model really threatened by AI, or is this a rare opportunity?

I am invested with about 2% of my portfolio (currently approx. -20%), but am considering doubling the value.

I am looking forward to your opinions.

13 Comentarios

fund_navigator_elshq@fund_navigator_elshq

2Semana

I assume that everyone is sitting like the rabbit in front of the snake "AI" and is afraid, the same applies to $ADBE. I believe in both companies, they will simply continue to function and adapt. People can never imagine that companies don't stand still - they simply adapt to new technologies like AI. They don't wait to be driven over the edge.

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Snoopy@Snoopy

2Semana

@fund_navigator_elshq I agree. The same was true of Alphabet a year ago.

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fund_navigator_elshq@fund_navigator_elshq

2Semana

@Snoopy Fortunately, I bought them back in 2024 for a P/E ratio of 17, and even then I was shaking my head as to why people put up with it. Today, Google's P/E ratio is >30 - I'd rather not buy now.

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Johannes🦅🔥@Johannes001

1Semana

@fund_navigator_elshq Bro, Constellation Software just buys up the Ki things

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aminemeskni@Aminmeskini

2Semana

That's exactly my thesis, it's now 4% of my portfolio. I prefer csu because the business is much broader than Adobe. I will continue to buy until the market changes its mind. I advise you to watch Canadian videos here.

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TomTurboInvest@TomTurboInvest

2Semana

$CSU has been in a consolidation phase with relatively high trading volumes since the beginning of November. @Tenbagger2024 wrote a detailed analysis a few weeks ago. I shared a few details on the chart - you can find them in the feed from $CSU
I have now started to build up a position, a breakout from this phase would no longer surprise me.

https://www.tradingview.com/x/B07vt5lf/

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Snoopy@Snoopy

2Semana

@TomTurboInvest Thank you for your input. I have already read the information from the feed and it underlined my opinion.
I am curious to see how the stock market will react to the next figures

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Tenbagger2024@Tenbagger2024

2Semana

@TomTurboInvest $UFPT could also be interesting now

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TomTurboInvest@TomTurboInvest

2Semana

@Tenbagger2024 There are currently an incredible number of companies - too many - that could take off in 2026.

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Snoopy@Snoopy

@TomTurboInvest unfortunately broken off at the bottom 🤦🏽‍♂️

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TomTurboInvest@TomTurboInvest

@Snoopy Well, that happens. Now it's time to reassess, where could the next resistance be? Was Friday already the low? And then act according to your strategy. You can continue to wait or take advantage of this and add to your holdings if you believe in the company, for example.

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Faule S.@Faule_Socke

2Semana

I put two of them under the Christmas tree.
Firstly, they now use AI themselves in development and support. And secondly - the moat. They are sitting on decades of industry data and experience with very specific, customized solutions.

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Christoph@ChrisBizz

2Semana

👍🏻

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