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We highlight a few stock write-ups from the latest Weekly Inspiration:
Constellation Software (Toronto: CSU) has compounded at roughly 30% a year since its 2006 IPO without issuing a single new share, and after falling more than 55% from its May 2025 peak it trades near 15x operating cash flow for a business generating more than twice the cash it did at the end of 2022. The 2026 software sell-off, in which several software ETFs lost more than 30%, treated every vendor as an AI casualty. Crossroads Capital calls that indiscriminate but admits nobody, itself included, can name the AI winners and losers in advance. Its answer is to own the allocator: a permanent-capital, Berkshire-like holding company of more than 1,100 vertical-market software businesses whose decentralized operators can keep buying the survivors as the evidence arrives, at prices the AI scare has lowered. In the first half of 2026 Constellation committed US$1.7 billion to acquisitions against US$1.08 billion of free cash flow available to shareholders, and the fund’s reconstructed return on all invested capital averaged ~17.6% over 2023-25. The fund built its position in February at an average cost of ~C$2,526, or 14-15x its forward estimate of that free cash flow, against ~50x at the 2025 peak. The watchpoint is recurring organic growth, which slipped to ~2% in constant currency in the second quarter; several quarters below 3% without one-off explanations would signal that AI is eroding the base rather than the narrative. Crossroads is long.