CSU Growth Outlook Not Reflected In Stock Price

admin — Mon, 23 Nov 2009 17:28:02 +0000

We recently had the opportunity to attend meetings between CSU
management (President and Chairman Mark Leonard and CFO John
Billowits) and institutional investors. The meetings reinforced our view that the company’s growth strategy is intact and the stock remains undervalued.
Management believes that the company’s growth outlook remains
undiminished, tracking 5,000+ acquisition prospects and continuing to
invest for organic growth. The organizational structure is in place to support revenues over $1 billion.
Management will discontinue official guidance for long-term growth of
20%+ beyond 2010, but believes that mid-teens growth remains achievable (5% internal + 10% acquired) without external capital, and higher growth if the company accesses external debt.

CSU’s outlook: solid base business with accretive uses of cash. Recent major acquisitions will drive ST top line although margins may be impacted; LT, acquisition prospects are solid.

Recent share weakness appears unwarranted.

TSX Commentary » Constellation Software Inc.

CSU Growth Outlook Not Reflected In Stock Price