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Constellation Software Inc. (CSU)
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Descartes Systems Group Inc. (The) (DSG)
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TerraVest Industries Inc. (TVK)
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Lumine Group Inc. (LMN)
Q: Could you share 2-3 ideas that have the potential to replicate the historical performance of CSU and why you believe in them, CDN or US, or both. Thanks
5i Research Answer:
CSU is in a class of its own. The company has become the case study of the serial acquirer model. Over a lifetime of investing, investors just need to spot a 'CSU' early once and just let the winners run. This could be a life-changing investment for most people. That being said, it is really hard to spot these investments early. We think some names could potentially replicate the performance of CSU such as LMN, TVK, DSG.
These are largely serial acquirers whose management teams have studied CSU’s business model. These companies already possess some track records for investors to evaluate. (not so much in the case of LMN yet). As a basket, these companies may not do as well as CSU, but we think it would do just fine for investors over time.