TIVP060: Constellation Software (CSU): Historic Drawdown, Historic Buying Opportunity w/ Daniel Mahncke & Shawn O’Malley
The Intrinsic Value Podcast - The Investor’s Podcast Network
Can VMS Be Vibe-Coded?
Shawn and Daniel debate whether AI can replicate CSI's niche solutions or if customer workflows and integrations preserve stickiness.
Daniel Mahncke and Shawn O’Malley take a deep dive into Constellation Software — the popular Canadian compounder that has turned buying “boring” vertical market software into one of the most effective capital-allocation machines in public markets.
IN THIS EPISODE, YOU’LL LEARN:
00:00:00 - Intro 00:03:33 - How Mark Leonard founded Constellation 00:08:43 - What principles drive Mark Leonard 00:15:23 - What Constellation looks for in acquisition targets 00:19:20 - About the metrics that matter to Constellation 00:21:15 - How Constellation is structured and incentivized 00:46:26 - Whether AI is a threat or chance 01:04:50 - Why Constellation considers investing outside of VMS 01:08:50 - Whether Shawn and Daniel add Constellation to the portfolio
*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.
BOOKS AND RESOURCES
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- Shawn & Daniel use Fiscal.ai for every company they research — use their referral link to get started with a 15% discount!
- WSB episode on Constellation Software.
- Synopsis Podcast on Constellation Software.
- Business Breakdown Podcast on Constellation Software.
- Mark Leonard Shareholder Letters.
- Saber Capital: How to Think about ROIC.
- Check out our previous Intrinsic Value breakdowns: Transdigm, Salesforce, Berkshire Hathaway, FICO, PayPal, Uber, Nike, Amazon, Airbnb, Alphabet.
- Related books mentioned in the podcast.
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