Constellation Software (TSX:CSU) is one of the best-performing stocks in Canadian history. Since 2006, shares have exploded higher by more than 6,000%. The S&P/TSX Composite Index, meanwhile, gained just 45%.
At any time over the last 14 years, this stock would have been a major buy. But that hasn’t stopped it from going on sale every now and then. These corrections are incredibly rare. In 2016, shares fell 20%, only to recover in a matter of weeks. The stock dipped by 20% again in late 2018, only to surge more than 50% throughout 2019.
This stock is simply special. Don’t miss your opportunity if it presents itself in 2020.
This is what’s so special
Constellation is a boring company. Just take a look at how it describes itself.
“Constellation Software is a leading provider of software and services to a select group of public and private sector markets,” its website states. “We acquire, manage and build industry specific software businesses which provide specialized, mission-critical software solutions that address the particular needs of our customers.”
Boring, right? Not exactly. By digging into those sentences, we can get a glimpse of what makes this stock so special.
As it describes, Constellation is a software company. Notice it doesn’t stress that it develops software but instead acquires it. This is core to its strategy.
Founded by a former venture capitalist, Constellation is essentially a vehicle that buys out niche software companies. You’ve likely never heard of any of these companies. They’re often incredibly small, serving narrow purposes. Constellation is usually one of the only interested buyers, providing them with attractive deal prices. It then plugs the acquired software into its larger portfolio, lowering maintenance and customer-acquisition costs.
Apart from specialization, Constellation also provides mission-critical solutions. Again, this is core to its strategy. Specialization means that there often aren’t any competing products to turn to, but the fact that this software is also mission-critical means customers can’t switch, even if they wanted to. Trying to cut costs by eliminating a critical part of your business isn’t a great long-term solution.
In combination, these factors provide Constellation with a stable and expanding high-margin, recurring sales base. It’s simply rinse and repeat year after year.
When to buy
By now, the market has caught onto Constellation’s valuable business model. Management recently suspended quarterly conference calls so that they don’t tip off competitors to potential deals. But even great stocks show volatility.
Constellation stock currently trades at 6.4 times sales, close to its five-year high of 6.8 times sales. In 2019, when shares last when on sale, it briefly traded close to four times sales. During the 2016 pullback, shares also bottomed around four times sales.
Don’t be surprised to see this stock never go on sale again, but like any investment, anything’s impossible. If shares move under five times sales in 2020, strongly consider picking up shares.
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The Motley Fool owns shares of and recommends Constellation Software. Fool contributor Ryan Vanzo has no position in any stocks mentioned.
COVID-19 pandemic taking toll on mental health, Alberta survey says – CBC.ca
An online survey of Albertans who reached out for help over COVID-19 suggests the pandemic is taking a toll on mental health, with increased signs of obsessive behaviour, stress and depression.
Vincent Agyapong, a professor of psychiatry at the University of Alberta, has just published results of a survey he took of people who subscribed to Text-4-Hope, a government service that provides a daily reassuring text message.
He found abut 60 per cent of respondents had become worried about dirt, germs and viruses since the COVID outbreak.
About 54 per cent had begun washing their hands “very often or in a special way,” which could be considered a symptom of obsessive compulsive disorder.
Nearly 50 per cent were considered likely candidates for anxiety disorders, and more than 40 per cent were likely clinically depressed.
And almost 85 per cent of respondents reported moderate to high stress.
Agyapong cautions the sample isn’t representative and that some level of stress and unusual behaviour is understandable in the current situation.
But he says his findings suggest the pandemic is affecting the public’s mental health.
WATCH: 'Virtual' Rotaryfest 2020 at 7 pm – SooToday
Despite an unprecedented year of obstacles, one of Sault Ste. Marie’s longest-running traditions returns in a brand new format. The Rotary Club of Sault Ste. Marie is present Virtual Rotaryfest, streaming on SooToday.
“Our Rotary Club has been celebrating Rotaryfest for almost 100 years – so when it became clear it couldn’t happen in the way it always has, we knew we had to find a creative way to still bring some of the fun of the festival to Sault Ste. Marie,” shared Rotary Club of Sault Ste. Marie President, Megan Wigmore. “With the virtual format this year, not only do we get to see some of our favourite local bands and performers that have become festival fixtures; we get to bring in some former Saultites to join the party as well!”
One of those former Saultites is Crystal Shawanda. The JUNO Award winning Canadian songstress will headline the virtual event with a Rotaryfest-exclusive performance. The online celebration of music will also include performances from crowd favourites Jay Case and Frank Deresti, Jackson Reed, Mustang Heart, Kelly MacGillivray, Kt Antler & Kyle McKey, Bone Yard, and Tyson Hanes.
This year’s Virtual Rotaryfest has been made possible through the generous support of OLG, SooToday, and Canadian Heritage.
Fourth patient dies as Foothills hospital outbreaks continue to grow – Calgary Herald
A fourth patient has died as a result of COVID-19 outbreaks in three units of Foothills Medical Centre.
Alberta Health Services confirmed the death of the patient at the northwest Calgary hospital Saturday, the latest development in Alberta’s largest active outbreak.
The outbreaks continued to grow Saturday, as two more patients and one more health-care worker tested positive for the novel coronavirus. In total, 20 patients and 18 hospital staff have been infected amid the outbreaks.
COVID-19 cases have been confirmed at three units of Foothills: one in the general medicine ward as well as two cardiac units.
As well, AHS confirmed to Postmedia Friday three additional units had been placed on “outbreak watch,” meaning they were being monitored for potential COVID-19 cases. Those units on watch include one cardiac unit and two in the general medicine ward.
AHS did not provide an update Saturday on the number of staff members forced to isolate as a result of the outbreaks. On Friday, they said 136 staff members had been asked to quarantine.
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