TIVP060: Constellation Software (CSU): Historic Drawdown, Historic Buying Opportunity w/ Daniel Mahncke & Shawn O’Malley
The Intrinsic Value Podcast - The Investor’s Podcast Network
Vertical Market Software Defined
Daniel defines vertical market software (VMS), examples, and why niche dominance yields high margins and ROIC.
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
- The Investors Podcast Network is excited to debut a new community known as The Intrinsic Value Community for investors to learn, share ideas, network, and join calls with experts: Sign up for the waitlist(!)
- Sign up for The Intrinsic Value Newsletter.
- Learn how to join us in Omaha for the 2026 Berkshire Hathaway shareholder meeting.
- Track The Intrinsic Value Portfolio.
- 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.
- Ad-free episodes on our Premium Feed.
NEW TO THE SHOW?
- Follow our official social media accounts: X (Twitter) | LinkedIn | Facebook.
- Browse through all our episodes (complete with transcripts) here.
- Try Shawn's favorite tool for picking stock winners and managing our portfolios: TIP Finance.
- Enjoy exclusive perks from our favorite Apps and Services.
- Learn how to better start, manage, and grow your business with the best business podcasts.
References to any third-party products, services, or advertisers do not constitute endorsements, and The Investor's Podcast Network is not responsible for any claims made by them.
Learn more about your ad choices. Visit megaphone.fm/adchoices
Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm
The AI-powered Podcast Player
