CSU
Capital Senior Living
stock NYSE

Fantastic picks with CSU, MELI, and BN. I've been absolutely backing up the truck on the first two over the past few months, and I feel very good about my chances over the next 5-10 years.

Also, wouldn't the growth via acquisition inevitably slow down as the company size increases? It's like Berkshire, acquiring small companies at bargain price no longer have meaningful impact on shareholder value. So the universe of meaningful opportunity also shrinks as CSU gets bigger

CSU - How to think about its valuation?

CSU has been mentioned. It is my sole buy in the space, and now my biggest holding. Down +50% from highs. I'd wager about 30-40% of that was unjustified, and the remaining haircut made sense but only because the price overshot the business.
If you know how large entities work and the burdens in "switching" VMS in such entities (due in part to cost/benefit, where software costs are minuscule compared to the business), and the specialized niches CSU operates in, it is very hard to see how progress in AI and coding is going to destroy or significantly impair the business model. And there has also been zero evidence of a negative effect yet -- it is still all speculation. This is true even if the SaaS thesis plays out with consumer facing software and similar.
CSU is also falling due to uncertainty from Mark Leonard's exit, but CSU has always been a decentralized, disciplined enterprise.
So you get max uncertainty while the business results have yet to show any real issues, beyond growth slowing due to the size of the business.
That's my play, anyways. Internally diverse, best management you could ask for, operating in a SaaS niche most immune to negative disruption, and being hit hard on price due to other issues that I think will turn out to be ephemeral (Leonard exit and downward momentum).

CSU and ADBE

For what it’s worth, the argument could be made that the rise of AI lowering the barriers to entry to software development is actually a benefit for CSU. A rise of small, niche, AI-led software businesses would increase the opportunities available to CSU. The rationale for the hurdle appropriate multiples that CSU are paying is still the same (low no. of buyers, small TAM for these niche businesses) so I can’t see an issue there either (though they may be paying slightly more for AI -led businesses with higher margins due to the diminished human capital that you mentioned).
The downside to CSU rn is that it’s still very 50/50 on if they will be an AI winner or loser (I believe the former) and the market is sure all software stocks are dead in the water. It’s very much a falling knife so entry could be painful for a while.

You make valid points on the numbers, but the "law of large numbers" was already a known factor when the market was happily paying a massive premium. The structural headwinds haven't changed overnight, but the sentiment definitely has.
The real drag on the multiple right now seems to be the AI narrative, specifically the fear that GenAI will allow clients to build their own bespoke software cheaply and ditch VMS providers. In my opinion, that is a severe overreaction.
Realistically, building internal tools (even with AI) still requires fulltime developers to prompt, audit, maintain, and secure that code. That turns into a permanent OpEx headache that is far more expensive and problematic than just paying the subscription for CSU’s mission-critical SaaS.
If anything, AI will help CSU way more than it bothers them. They manage a massive portfolio of legacy codebases; if AI tools make their maintenance teams 20-30% more efficient, that is a direct lever for margin expansion across hundreds of business units. It lowers the cost of keeping those niche VMS running forever.
On the valuation front, look at the compression. We've gone from trading at 30-35x trailing FCFA2S to hovering in the low 20s. Even assuming the ROIC degradation is permanent and settles in the 25% range, you are getting a ~5% FCF yield right now plus mid-teens growth. That is a very solid IRR floor. The market is pricing this like the growth story is dead, rather than just evolving.
We are effectively getting a "wonderful company at a fair price" (Buffett style) because the market is pricing in a disruption that I just don't see materializing. I’ve started buying at these levels, and not just CSU, also Topicus, because I'd rather own this businesses at a fair value than a mediocre business at a cheap price.

What is an appropriate multiple for CSU?

CSU, TEAM, HUBS, NET.

*list your SaaS bag thread*
Mine is CSU

I'll agree with you on 2, although maybe moreso in the "fairly valued" camp than overvalued per se.
For other SAAS businesses, I own a large stake in CSU and the spinoffs, a medium-ish sized position in ADBE, and am currently deciding which names on my watch list to add in the carnage here. The frontrunners so far are NOW, ZETA, RBRK, CRM, and maybe INTU. TEAM, HUBS, IOT, and TTD are also on the radar, but need more research to have much of an opinion on them.

TOI, CSU, DUOL

Downvotes on Reddit are making you concerned about your holdings? Who cares about CSU getting all the hate? I care about the fundamentals and trajectory the business, not of peoples opinions on Reddit.

You are getting downvotes lately. This makes me concerned about my holdings. CSU is getting all the hate lately

Constellation Software (CSU)
Adobe (ADBE)
Novo Nordisk (NVO)

As a swing trader, everything I’m interested in buying is either endlessly dipping (RBRK, CSU, PGY) or hasn’t dipped enough yet after I sold the peak (ASTS, RKLB, BKSY).
Fine holding my cash right now until the opportunities look better.

CSU.TO gang

Solid takes. I’m with you on most of these, especially the P/E point: historical charts don't really account for the superior capital efficiency of modern index components.
I want to push back a bit on the "hated stocks" though. I actually hold PYPL and FI, but the opportunity cost worries me. The market can stay irrational long enough to make these investments dead money. Even if the downside is capped (asymmetric risk), holding these while the rest of the market rallies requires massive patience. I see UNH (I’m a bagholder too) the same way: it feels like it’ll be stuck in the mud, possibly until the next political cycle, so the returns over the next 2 years might not be worth the headache compared to other narratives.
Funny how much overlap we have. I’m also holding NVO, GAMB (speculative size) and I'm betting big on ADBE, CSU, and Topicus. Regarding FOUR: I'm actually huge on this one too. Aside from the valuation, I love that management is fully aligned and they consistently guide above consensus and still beat the numbers. High conviction hold for me. I hope there will be a turnaround on the financial/payments narratives sooner than later. They have great multiples and keep generating FCF, it’s matter of time IMO.

Not everyone in this sub is a sensible investor, but it's safe to say the average joe on here is more interested/knowledgeable than some other circles of completely unresearched opinions on the internet.
I'd like your collective takes on what stands out as my most on-the-nose opinion, as well as my least convincing one. I chose topics/stocks that
A) get a lot of mentions on this sub and
B) are at least somewhat within my circle of understanding.
I'm going to condense down each take to a sentence or two in rapid fire format, I'm happy to explain my thoughts more fully if anyone would like. Here goes:
1) The headline PE ratio of the major US indices seems alarming when shown on a historical chart, but is very much warranted because of better fundamentals and index composition.
2) Most of the mag 7 (minus TSLA) are still an excellent source of alpha when bought on large pullbacks *even though they are widely researched*, because dumb narratives can cause disproportionate sell offs in great businesses.
3) Global Ecommerce titans (AMZN, MELI, SE, CPNG, possibly KSPI) are great buys at today's prices, although I would avoid the Chinese players for a variety of reasons.
4) SAAS is like shooting fish in a barrel right now. Unit economics are wonderful, prices are finally reasonable, and people vastly underestimate the staying power of "dead" or "commoditized" software businesses (see the financials of WIX, ZM, DOCU, etc. and their lack of shrinking revenues/their growing FCF)
5) Payment providers in many niches are undervalued right now. The titans like V, MA, ADYEY, etc. are trading at reasonable prices (for wonderful companies), and plenty of riskier companies with fantastic fundamental performance have priced in too much risk (FOUR, PGY, RELY, SEZL, DLO, etc.).
6) Hated companies like PYPL, FI, LULU, CMCSA, and a few others are set up to perform surprisingly well from current prices. When you're trading at 10x earnings or less, you don't need anything beyond mediocre performance to get a good return.
7) Plenty of consumer staples like PG, WMT, KO, COST, and other stalwarts provide terrible risk/reward ratios right now. Growth is slow, they are fairly capital intensive, balance sheets usually carry lots of debt, and P/E's rival tech behemoths.
8) UNH will do okay in the long run, but it's probably gonna be like watching paint dry.
9) ADBE will likely do well from here through mid single digit revenue growth and heaps of buybacks. The software is sticky for large enterprises.
10) GAMB is a super divisive stock with complicated financials that comes up on here a lot, and I think it's a very asymmetric bet that could go to zero and could 10x in under 5 years (I hold shares, probably not wise to own a large position)
11) DUOL is compelling at today's prices. Adjusting for SBC, EV/FCF is about 24x, and growth will likely slow going forward but probably won't completely fall off a cliff. The moat has some question marks, but app addiction can be a really good business.
12) CSU and spinoffs are phenomenal buying opportunities at current prices. Mark Leonard stepping down doesn't change much, the machine mostly runs itself at this point.
13) I don't know enough about NVO to have a firm opinion, but I think your downside protection is likely pretty solid from low valuations and the other products outside of just GLP-1's.
14) The current administration is bad for freedom and democracy, but their dumb ideas aren't enough to outweigh the global footprint/dominance of the best American businesses.
Those are just some things that come to mind as a frequenter of this sub, tell me what you guys think! More than happy to elaborate if needed 🙂

CSU