Investment Q&A

Q: On your great advice I picked up Constellation Software last year. I made it a full position, and it has now reached 6% including all my portfolios. I am not risk adverse and I don't mind holding winners, but at what total % level should I start to take some profits.

Do you think letting it move up to 10% is ok, or way to risky.

Cheers, Colin.

Q: In your latest Summary Report containing CSU, it states the
INDUSTRY--Retail & SUB_INDUSTRY--Computer & Software Stores.
Is this correct?

Q: Hi Team,

The numbers I saw looked good in today's quarterly report. Do you agree?

Thank you.

Michael

Q: Hi, can you please comment on CSU earnings release and impact on stock ? Also, could you also share your thoughts on rapid rise in stock price over past few days, specially on 29th July ( +$18 on a nominal volume of 63k shares).Thanks

Q: Last week 10% of the float traded, the most in years. Can we know who might have bought in or sold out? Any speculation if there's no definitive way of knowing? Thanks, J.

Q: Would you comment on the the acquisition of Datamine? Thank you.

Q: Hi, What would be the impact of CSU being added to S&P/TSX 60 indices, effective July 24, 2015?
"S&P Dow Jones Indices Announces Changes to the S&P/TSX Canadian Indices
17:15 EDT Tuesday, July 21, 2015
Constellation Software Inc. (TSX:CSU) will be removed from the S&P/TSX Completion Index and added to the S&P/TSX 60, 60 Capped and the 60 Equal Weight Indices. Constellation Software will not be added to the S&P/TSX 60 ESG Index at this time. Also, Constellation Software will be added to the S&P/TSX 60 Equal Weight Index at a relative weight equal to the relative weight of Catamaran at the close on July 24, 2015."

Q: Hi Peter and Gang,
I bought CSU which I still own at $170 and its currently trading at the $540 range. I would appreciate your comment regarding an exit strategy for this stock.
Regards,
H.S.

Q: Hi guys,

I'm looking at adding a growth stock with a modest yield to my RRSP over the next few months before October. Why would you recommend at today's prices from the following: Constellation Software, CCL Industries, Brookfield Asset Management or Magna. I know the companies and sectors are all a bit diverse, but I have room to add to all of these sectors without being overweight. I'm leaning towards Magna, but I wanted your opinion.

Thanks,
Jason

Q: Hi Team,

What is the current P/E ratio of the these companies?
ESL
PHM
CRH
ATD-B
BYD-UN
XTC
DRT
CSU
Thank you, Shane

Q: RBC came out with a research note on CSU this morning and a $475 target price (well below market price).

Do you agree, and can you comment on their observations I'm quoting below plse:

"In light of the divergence between Constellation’s current pace of acquisitions and valuation, RBC CM wanted to outline the conditions necessary and scenario for re-acceleration in acquisitions. The analyst believes a reduction in Constellation’s hurdle rate is needed to counter the elevated pricing environment and drive material re-acceleration in acquisitions. In the meantime, RBC CM sees acquisitions below FCF and Constellation deleveraging. RBC CM believes Constellation’s long-term fundamentals remain attractive. However, valuation multiples near the high end of Constellation’s historical range have diverged from its slower pace of M&A. RBC CM’s C$475 target equates to 16x CY16E EV/EBITDA on $519MM CY16E adj. EBITDA."

Thanks

Q: Constellation continues to defy the analysts and has now more than doubled in the last year - a great company. Is it ever considered a potential take-over target? Thanks, Peter

Q: Hi Peter and the gang,

I bought CSU at just under $170 and its trading at over $500 right now with a multiple in the high 60s. Just wondering what your thoughts are going forward and should I take some money off the table.

Regards,
H.S.

Q: Mr. Hodson, this stock gets a rather low rating from analysts.
For example, at TD WebBroker, the ratings are Under Perform (2), Hold (5), Buy (1) and Strong Buy (0).
At RBC Direct Investing, the Consensus Recommendation provided by Thomson Reuters is 3.13 (on a scale of 5 to 1, 5 being a Strong Sell). How could analysts have it so wrong, when the stock is clearly a strong performer for quite some time ?

The matter is entirely different when it comes to AYA (Amaya), and presumably rightly so. Amaya is much appreciated by analysts. Why the difference of treatment ?

CSU is a good stock, but is not much appreciated by analysts, while AYA is the darling of analysts. Is this a game for analysts ? Of course AYA has been a star recently, but CSU is clearly a good value stock. Maybe AYA is reaching for the stars, while CSU is only an outstanding performer...

Q: CSU is taking over Picis. 700 hospitals worldwide sounds big but just how big a deal is this? Market seemed to like it initially but is calmer about it now. Thanks, J.

Q: A slight correction to your response to Noel re the CSU RTS. The exercise price will be $115 per 100 of principal as indicated below. Perhaps you can expand your response to include something on the merits of the offering at the published price of $115.

"The Rights will be exercisable until 4:30 p.m. (Toronto time) (the "Expiry Time") on September 15, 2015 (the "Expiry Date") at a price of C$115 per C$100 principal amount of Debentures purchased."

Many thanks. Bob

Q: Hi. I own 50 shares of CSU. On my latest statement there are also 50 shares of CSU.RT.A, now worth about $8.00
What action if any, should or could be taken with respect to the new (rights) shares? Thanks, Mike

Q: Hi, Can you please comment on the earning announced after market, today. Looks like a nice beat on Adjusted EPS as well as Adjusted EBITDA numbers, despite revenue slightly below consensus? Also how is weak euro and strong US$ impacting the company, in your view? Thanks

Q: Can you please explain the recently announced "Rights Dividend"

Thanks
Craig

Q: Do you feel that CSU is overvalued at these levels? If not what would be the potential upside or downside risks going forward for the next 12-18 months?
Thanks for your opinion.
Frank