Investment Q&A

Here is what we think about the advantages and disadvantages of an equal weighting for the CSU "group”. One of the key advantages of owning equally three names is diversification in terms of exposure to VMS software across markets including the US, European, etc. as some sectors will do better than others at different times. On the other hand, the equal weighting could potentially make investors underweight names with longer runway for growth, as CSU is quite large while the other two are still in the early days. We are okay with the equal weight strategy here, although CSU’s organic growth is even stronger than LMN’s in recent quarters. In addition, investors do not have to point out exactly which one will do best, owning the three names as a group should do well over the long term. Disadvantages are that TOI and LMN are much smaller and largely unproven (yet). Share prices of these could be more volatile, especially if they do not follow CSU's trend line (as many expect). Single contract/subsidiary problems have more impact to smaller companies. Also, though it is not something we expect (in the short term), CSU could sell some or all its shares in TOI/LMN to raise capital and this would certainly pressure prices.