On Tuesday the S&P 500 was down 0.3% and Toronto was about unchanged.
Constellation Software was up another 5.2% to $217.73. on the same news that I mentioned yesterday.
I first added Constellation Software to this site back on February 4, 2011 rating it (lower) strong Buy at $51.40. It quickly went up to about $67 but then a strategic review was announced. For a long time it became very hard to value as it was trading based on being sold. I believe I sold at something like 50% gain. The Ontario Municipal Employees Pension Pension Plan was a major owner with Board representation and they wanted to cash out. They finally did so around April 2012 at something close to $90. Now these were insiders and you would think they would have a clue. Constellation was superbly run and making big profits. Yet these experts sold. I bought back in around that time as the company was one again trading on fundamentals rather than on a sale speculation. I paid more to buy back in than I had sold at. That was tough to do but turned out well.
Somewhere along the line I sold half of what I had to take profits. In recent updates it has looked expensive.
But it is a great company and sometimes it seems these great companies just keep steamrolling along. I sold half my position today at $118.50. I now hold 75 shares on which my gain is 148%. In addition there was more gain from the first time I owned it.
The total gain since it was first added to this site is 324%. Apparently someone forgot to tell it that “buy and hold is dead” (which of course, it is not.)
I mentioned that the experts at Ontario Municipal Pension plan sold way too early. Another example of experts being wrong was when Bain Capital got completely out of Dollarama at prices in the 20’s and 30’s. Now it’s in the 80’s. I guess it goes to show that investing is not so easy.
Visa had another good day up 2.6% to $213.25. It’s a powerhouse that in recent updates has looked expensive. But being a largely unregulated (as to price) monopoly has its privileges. (Sorry to say so American Express), I call it a monopoly because almost every business has no choice but to accept its cards. I made modest gains on this company but let far larger gains slip from my grasp. Still, I can’t complain.
Canadian Tire also did well today. One negative though on Canadian Tire, at some point the lower Canadian dollar could hurt earnings. Maybe not a huge factor but it is a negative for Canadian Tire (which imports most of its products).
Stantec was down 2.6% today despite announcing a modest acquisition. It’s another great company that just seemed to get too expensive.
On Wednesday afternoon I believe the FED will speak about quantitative easing and the timing of when it will be scaled back. The market seems to expect soothing words like it will be later and it will be gentle. We shall see.