Speedwell Research's Drew Cohen shares thesis on FinTwit favorite, Constellation Software $CSU.TO

Yet Another Value Podcast

Drew Cohen from Speedwell Research, joins the podcast to discuss his thesis on Constellation Software (TSX: CSU), who acquires, manages and builds vertical market software businesses.

For more information about Speedwell Research, please visit: https://speedwellresearch.com/

Speedwell Research profile on Constellation Software: https://speedwellresearch.com/companies/reports/constellation-software/

Chapters:

[0:00] Introduction + Episode sponsor: Tegus

[1:41] Who is Constellation Software and why are they interesting to Drew

[6:05] How $CSU.TO is scaling their business model / competing with private equity

[13:00] Reverse DCF, deploying capital, competing now with other billion dollar software businesses

[21:02] Mark Leonard - is $CSU.TO a jockey bet / capital allocation / sellers

[28:32] $CSU.TO - what takes this company out

[30:57] AI risk?

[32:52] Price increases / TransDigm comparison / competition risk

[40:08] $CSU.TO vs. parking capital at index fund / likelihood of deploying at least 50% of their cash flow over next 10-ish years

[45:07] Operating synergies with 6 verticals? Why not more spin-offs?

[47:07] Additional worry about $CSU.TO - changing incentive system

[51:58] Aside from Berkshire, what are other examples of Constellation-like culture

[54:57] Speedwell's favorite write-ups he's done recently + quick thoughts on $RH

Today's episode is sponsored by: Tegus

This episode is brought to you by Tegus, the future of investment research.

From the beginning, Tegus has been committed to creating efficiencies in the research process by making it easy to access the content that investors need to get to differentiated insights.

Today, they’re taking it one step further by bundling qualitative content, quantitative data, and better automation and technology together in the same platform. Instead of piecing together data from fragmented sources, just log in to Tegus to get expert research, company- and industry-specific metrics and KPIs, SEC filings, and more, all under the same license cost.

You can even take your work offline with an Excel Add-in that updates almost any model with the latest financial data — keeping all your custom formatting intact.

Tegus is the fastest way to learn about a public or private company and the only platform you’ll need for fundamental research.

To try it free today, visit Tegus.com/value