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Ruane Cunniff Comments on Constellation Software

- By Holly LaFon

Constellation Software (NYSE:CSU) delivered solid performance again in 2017. Revenue grew in the mid-teens with a low single-digit organic contribution and margins remained strong, leading to mid-teens growth in earnings. The company took an important step last year, expanding the M&A team under CIO Bernie Anzarouth to accelerate its rate of acquisitions. This investment appears to be bearing fruit. In the first nine months of 2017, the company deployed more on acquisitions than it did in the full year 2016. This pace is not enough to soak up all of the company's cash flow, but it is a remarkable achievement against a tough backdrop. Asset prices are up, debt is inexpensive and Constellation's success has attracted copycats.This is one of the most financially disciplined companies we have ever come across, so to see it find investments in this environment bodes well for when markets inevitably turn.

From Ruane Cunniff (Trades, Portfolio)'s Sequoia Fund 4th Quarter 2017 Manager's Commentary.
This article first appeared on GuruFocus.