Constellation Software program (TSX:CSU) is likely one of the most prolific shares in Canadian historical past. For individuals who aren’t aware of this firm, know that it’s a tech conglomerate. Constellation Software program’s enterprise focuses on buying nice vertical market software program (VMS) companies and serving to them flip into distinctive enterprise items.

Constellation Software program’s acquisition course of targets very particular companies, and it’s proven through the years that it’s a really strong acquisition mannequin. The corporate requires potential acquisitions to be distinctive companies which have proven constant profitability and above-average progress. As well as, the enterprise will need to have an excellent supervisor able to persevering with to function the enterprise at a really excessive degree.

Traditionally, Constellation Software program has targeted on small- and medium-sized VMS companies. Nonetheless, over the previous couple of years, the corporate has begun to include the acquisition of enormous VMS companies. For instance, Constellation Software program acquired WideOrbit final yr, ensuing within the spinoff of Lumine Group.

How has the inventory carried out?

As talked about beforehand, Constellation Software program inventory is maybe probably the most prolific inventory within the historical past of the TSX. As of this writing, Constellation Software program inventory has gained greater than 20,000% since its preliminary public providing (IPO) in 2006. Nonetheless, in the event you didn’t get in throughout its IPO, you continue to may have generated excellent returns within the years after.

For those who invested on this firm in late October 2007, you can’ve seen your shares develop by about 18,500%. That represents a mean annual return of almost 38%. To place that into perspective, the TSX has generated a mean annual return of about 2.5% over the identical interval. In different phrases, an funding of $10,000 may have was $1.86 million.

For those who had begun shopping for shares of Constellation Software program inventory in 2012, you’d nonetheless be in an excellent spot right this moment. Since then, Constellation Software program inventory has generated a mean annual return of 39%. As a result of the time interval isn’t so long as the earlier instance, your $10,000 would have solely was about $536,000.

Ought to traders purchase shares of this inventory right this moment?

With that mentioned, many traders could also be questioning if it’s too late to speculate on this firm. I’d say no. The truth is, this is likely one of the largest positions in my private portfolio. The rationale I imagine Constellation Software program may proceed to reward shareholders is as a result of the corporate continues to be dedicated to progress.

As talked about beforehand, the corporate has lastly begun to include the acquisition of enormous VMS companies over the previous couple of years. That was a large change for the corporate, which had beforehand ignored these types of alternatives. As well as, Constellation Software program’s founder, Mark Leonard, continues to steer this excellent firm.

As the ultimate approach to persuade you of its potential, think about that Constellation Software program inventory has gained greater than 57% over the previous yr. I firmly imagine that this inventory nonetheless has numerous room to develop.