Subject: Topicus: Not Constellation
Constellation Software has been discussed here a fair bit.

They run several divisions. One was in charge of European verticals, and it was spun off as its own company, with Constellation owning a chunk and keeping the control.

Topicus is listed in Canada on the Venture exchange as TOI.V (usual venue for "buyer beware" junior miners), and it reports in Euros, so its visibility in the investment world seems pretty close to zero. On rare occasion it also trades in the US as TOITF. (I exaggerate a bit, the average volume is about 30k shares/day despite the sorry bid/ask spread)

I've only started looking at them, so do a bunch of reading before taking anything at all in this post as accurate. I'm interested because they seem to combine the value growth rate and business model of Constellation with a share price that has gone nowhere for ages. In other words, by being overlooked they have become a whole lot cheaper since they listed about five years ago.

Since they are, like their parent, serial acquirers, year to year comparison of financials get a little difficult as you work your way down the statement. EPS bounces around a lot.

But I did a comparison of full year 2025 results to average of 2021 and 2022 results for a few metrics, and annualized that as a 3.5 year rate of growth.

Revenue up 20%/year compounded
Cash flow up 36%/year
[Total assets less debt] up 21%/year
Share count is constant (nice to see) so growth in top line figures matches per share growth.

And yet...average market price in 2021 was C$100.20, current price only C$101.99.

This is probably in part due to an unusually large quirk in their 2025 results. Due to some fairly complicated accounting requirements from a two-stage purchase, it seems they were forced to report a big hit to earnings which didn't really occur. To the extent that I follow, the first part of the acquisition was purchase accounting, then it converted to equity method, which triggered a revaluation, but there were also derivatives on the position in the mean time which booked a profit...blah blah blah, something along those lines. But the cash flow statement makes it clear that it was a large and very accretive investment, in a Polish firm Asseco that does something kind of like what they do: buy small software businesses, across a LOT of countries.

One random write-up at SA https://seekingalpha.com/artic...
I don't pay much attention to his valuation notes based on comps, but it talks about some of the things going on.

One thought: a Europe-focused Constellation alternative might be a good play. What's the EU's competitive advantage? Regulating things. The average vertical software product might have a better-than-typical moat.

I think it's worth looking into. If others want to do some research and post deep insights I wouldn't complain. Hint, hint.
I might open a small position just so I don't forget about them. Tracking positions make no financial sense, but we're all humans, so it's good to be aware of nonsense things that work.

Jim