Is the subsequent Tech software program play in acquisition-driven vertical market software program?
Constellation Software program could lower dividend, plans to pursue greater offers
Constellation Software program (CSU) is a a lot youthful model of Roper Applied sciences (ROP). Assume Berkshire Hathaway plus know-how. Additionally, the scope of the software program choices is broader for the previous than for the latter.
This little-known Canadian play in vertical market software program returned not less than 3600% between mid-2010 and mid-2020. Extra importantly, the inventory went up whilst rates of interest went up in 2016, as a result of all acquisition targets have been already worthwhile and cash-flow-generating companies, and have been additionally purchased at a reduction. In different phrases, all acquisitions have been a company train in worth investing.
In flip, this firm has a bit brother of its personal, additionally Canadian-based: Enghouse Programs (ENGH).
The sooner query is not about any of the aforementioned firms particularly.
Is there potential for a number of “subsequent Constellation Softwares” which might be within the enterprise of acquisitions for constructing vertical market software program empires as profitable because the above, particularly as we come nearer to 2023-2024 and past?
[Such plays could “stonk” even while the rest of the tech bubble pops, so long as their acquisitions are corporate exercises in value investing.]