Latest news with #Topicus
Yahoo
6 days ago
- Business
- Yahoo
TFSA Fortune: How 1 Technology Stock Could Secure Your Financial Future
Written by Brian Paradza, CFA at The Motley Fool Canada Imagine turning a $7,000 investment into a staggering $2.5 million position, entirely within the tax-free haven of your TFSA. That's the remarkable reality for investors in Constellation Software (TSX:CSU) stock over the past two decades – a mind-boggling total return exceeding 36,000%. While replicating that exact feat might be a tall order, a spun-off company following the same powerful blueprint strategy could be poised for significant long-term growth, making it a compelling candidate for your own TFSA. That TSX technology stock is (TSXV:TOI), and it's grabbing serious attention this week as the top performer on the TSX's Top Tech 50 list. isn't just riding a growth wave; it's actively building one. Much like its former parent Constellation Software, Topicus focuses on acquiring, managing, and building specialized vertical market software businesses – essential software solutions tailored for specific industries. While Constellation conquered North America, is methodically applying the same winning strategy across diverse markets in Europe. Canadian investors seeking long-term growth within their TFSA may find Topicus's focused approach appealing. Why stock deserves a place in your TFSA The tech stock's early results are promising. spun off from Constellation in early 2021, and early investors are already sitting on gains nearing 200%. More importantly, the underlying business is firing on all cylinders. first-quarter 2025 results showcased impressive momentum. Revenue surged 16% year-over-year to €355.6 million (about $569 million CAD), driven by strategic acquisitions and a solid 4% organic growth rate. Earnings per share jumped an even more impressive 36.4% to €0.30. But the real story, the fuel powering growth engine, is its free cash flow (FCF). This crucial metric represents the cash a company generates after accounting for operating expenses and capital expenditures — the actual cash-based profit available for reinvestment, dividends, or debt repayment. Topicus generated a staggering €271.4 million in cash flow from operations during the first quarter, leading to free cash flow of €161.7 million ($258.8 million CAD), a 21% year-over-year increase. This torrent of free cash flow is the lifeblood of growth strategy. It allows the TSX tech stock to aggressively pursue acquisitions without constantly needing external financing. For example, during the first quarter, completed acquisitions totaling €39.4 million ($63 million CAD). With quarterly FCF exceeding €161 million, Topicus has the capacity to significantly ramp up its deal-making. It could could have quadrupled its acquisition spend just from the first quarter FCF alone! This self-sustaining model is precisely how Constellation built its empire. Long-term oriented TFSA investors may wish to check stock out before fully deploying their $7,000 contribution room for 2025. TOI stock valuation and the Constellation blueprint To be clear, TOI stock carries a premium valuation. Its forward price-to-earnings ratio (P/E) sits around 69, higher than the industry average of 52. However, looking solely at earnings misses the bigger picture fueled by cash. When you consider its phenomenal cash generation, stock looks far more reasonably priced. Its price-to-free-cash-flow (P/FCF) multiple is 38.6, significantly cheaper than the North American industry average of 66. Similarly, its enterprise value-to-free-cash-flow (EV/FCF) multiple of 25 compares very favourably to the industry average of 56. The big question for TFSA investors is: Can replicate the phenomenal success of Constellation Software stock? ^TSX data by YCharts The potential for stock to widely outperform the TSX is certainly there. Topicus still operates under Constellation's guidance, and it is using the exact same proven playbook. The company's core strategy of acquiring essential, niche software businesses is time-tested. Chances of outright failure seem low. However, tempering expectations is prudent. Europe presents different market dynamics than North America. More crucially, the timing is different. Constellation began its acquisition spree 30 years ago in 1995 and survived the aftermath of the dot-com bust, finding bargains when tech valuations were depressed. Topicus is executing its strategy in the artificial intelligence (AI) era, where software valuations are generally higher. While the strategy is sound, expecting an identical 36,000% return over the next 20 years is potentially unrealistic. TFSA investor takeaway stock represents a fascinating opportunity for TFSA investors seeking long-term, tax-free compound growth. It possesses a powerful engine: the proven Constellation Software acquisition strategy, now focused on the European market, and fueled by rapidly growing, substantial free cash flow. This internally generated cash allows the technology stock to aggressively fund its own growth, creating a potentially powerful compounding effect within your TFSA. The post TFSA Fortune: How 1 Technology Stock Could Secure Your Financial Future appeared first on The Motley Fool Canada. Should you invest $1,000 in Constellation Software right now? Before you buy stock in Constellation Software, consider this: The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Constellation Software wasn't one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years. Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the 'eBay of Latin America' at the time of our recommendation, you'd have $24,927.94!* Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 30 percentage points since 2013*. See the Top Stocks * Returns as of 6/23/25 More reading 10 Stocks Every Canadian Should Own in 2025 3 Canadian Companies Powering the AI Revolution A Commonsense Cash Back Credit Card We Love Fool contributor Brian Paradza has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends The Motley Fool recommends Constellation Software. The Motley Fool has a disclosure policy. 2025 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
21-07-2025
- Business
- Yahoo
Are Strong Financial Prospects The Force That Is Driving The Momentum In Topicus.com Inc.'s CVE:TOI) Stock?
(CVE:TOI) stock is up by a considerable 27% over the past three months. Since the market usually pay for a company's long-term fundamentals, we decided to study the company's key performance indicators to see if they could be influencing the market. Specifically, we decided to study ROE in this article. Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. In other words, it is a profitability ratio which measures the rate of return on the capital provided by the company's shareholders. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. How Is ROE Calculated? Return on equity can be calculated by using the formula: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for is: 22% = €160m ÷ €715m (Based on the trailing twelve months to March 2025). The 'return' is the yearly profit. That means that for every CA$1 worth of shareholders' equity, the company generated CA$0.22 in profit. See our latest analysis for What Is The Relationship Between ROE And Earnings Growth? Thus far, we have learned that ROE measures how efficiently a company is generating its profits. Depending on how much of these profits the company reinvests or "retains", and how effectively it does so, we are then able to assess a company's earnings growth potential. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don't share these attributes. A Side By Side comparison of Earnings Growth And 22% ROE To start with, ROE looks acceptable. Especially when compared to the industry average of 12% the company's ROE looks pretty impressive. This certainly adds some context to exceptional 46% net income growth seen over the past five years. However, there could also be other causes behind this growth. For instance, the company has a low payout ratio or is being managed efficiently. We then compared net income growth with the industry and we're pleased to see that the company's growth figure is higher when compared with the industry which has a growth rate of 24% in the same 5-year period. The basis for attaching value to a company is, to a great extent, tied to its earnings growth. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. What is TOI worth today? The intrinsic value infographic in our free research report helps visualize whether TOI is currently mispriced by the market. Is Efficiently Re-investing Its Profits? doesn't pay any regular dividends currently which essentially means that it has been reinvesting all of its profits into the business. This definitely contributes to the high earnings growth number that we discussed above. Summary In total, we are pretty happy with performance. Particularly, we like that the company is reinvesting heavily into its business, and at a high rate of return. Unsurprisingly, this has led to an impressive earnings growth. With that said, the latest industry analyst forecasts reveal that the company's earnings growth is expected to slow down. Are these analysts expectations based on the broad expectations for the industry, or on the company's fundamentals? Click here to be taken to our analyst's forecasts page for the company. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
08-07-2025
- Business
- Yahoo
Why This Tech Stock Could Be the Next Shopify
Written by Amy Legate-Wolfe at The Motley Fool Canada Shopify (TSX:SHOP) is often the gold standard when it comes to Canadian tech success. It went from a little-known e-commerce company to one of the biggest stories on the TSX. So whenever a new name comes up with similar growth potential, it's worth paying attention. That's why (TSXV:TOI) is starting to get noticed. It doesn't have the flash of Shopify, but it has been quietly building something impressive. And for long-term investors, it could be one of the most exciting tech stocks on the market today. Topicus is a software company that focuses on vertical markets. That means it develops and acquires software tailored to specific industries like healthcare, education, and government. It's not trying to be everything to everyone. Instead, it wants to dominate smaller segments by offering exactly what those users need. This model allows it to grow quickly and maintain sticky customer relationships, since these tools are often deeply embedded into a company's day-to-day operations. The tech stock was spun out of Constellation Software in early 2021, and it has inherited some of the same strengths. Like its parent, Topicus is all about acquisition-led growth. It buys up smaller software firms, integrates them into its structure, and uses that foundation to continue growing. This buy-and-build strategy has worked well for Constellation, and Topicus is following a similar path. As of its latest report for the first quarter of 2025, Topicus posted revenue of €506 million, which is about $556 million in Canadian dollars. That was up from €451 million the year before. Net income came in at $37.4 million, with earnings per share (EPS) of $0.47. The tech stock continues to reinvest in operations and acquisitions, which can pressure short-term earnings but support long-term value creation. What makes Topicus exciting is its consistency. Over the past five years, it has grown earnings by 46% per year and revenues by 22% annually. Its return on equity sits at a strong 22.4%, and its profit margin is around 7.3%. Those are healthy numbers for a company in growth mode. These show it isn't just burning cash to expand. It's building a sustainable business with real profits and strong cash flow. The tech stock trades at a high valuation at about 93 times trailing earnings. That might scare off some investors, but it reflects the market's belief in Topicus' growth potential. Its market cap has now reached $22.7 billion, which is impressive for a tech stock still listed on the TSX Venture Exchange. There are risks, of course. The tech stock is highly acquisitive, so it depends on finding good businesses to buy at reasonable prices. Integration risk is real. If one of its acquisitions underperforms or doesn't mesh well with the rest of the business, it could drag down results. Macroeconomic issues in Europe, where many of its customers are located, could also impact demand. Still, Topicus has shown it can handle these challenges. Its focus on vertical markets gives it a defensive edge. Even during tough times, many of its customers can't easily switch to another provider. The software is too deeply ingrained in their daily operations. That helps keep revenue steady and allows Topicus to continue scaling over time. It might not become the next Shopify in terms of market cap, but Topicus has a real chance to become a dominant force in its own space. It's already proving that growth and profitability can go hand in hand. For investors looking for a Canadian tech stock with a long runway ahead, Topicus is a name to watch. And maybe, just maybe, it's the next big thing. The post Why This Tech Stock Could Be the Next Shopify appeared first on The Motley Fool Canada. Before you buy stock in Constellation Software, consider this: The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Constellation Software wasn't one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years. Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the 'eBay of Latin America' at the time of our recommendation, you'd have $24,927.94!* Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 30 percentage points since 2013*. See the Top Stocks * Returns as of 6/23/25 More reading Made in Canada: 5 Homegrown Stocks Ready for the 'Buy Local' Revolution [PREMIUM PICKS] Market Volatility Toolkit Best Canadian Stocks to Buy in 2025 Beginner Investors: 4 Top Canadian Stocks to Buy for 2025 5 Years From Now, You'll Probably Wish You Grabbed These Stocks Subscribe to Motley Fool Canada on YouTube Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify and The Motley Fool recommends Constellation Software. The Motley Fool has a disclosure policy. 2025 Effettua l'accesso per consultare il tuo portafoglio
Globe and Mail
02-06-2025
- Business
- Globe and Mail
Joint Press Release of Constellation Software Inc. and Topicus.com Inc. -- Topicus.com Inc. completes acquisition of Cipal Schaubroeck in Belgium
TORONTO, June 02, 2025 (GLOBE NEWSWIRE) -- Constellation Software Inc. (TSX: CSU) and Inc. (TSXV: TOI) today announced that Topicus' subsidiary Total Specific Solutions (TSS) B.V. ('TSS') has completed the sale and transfer of all issued and outstanding shares in the capital of Cipal Schaubroeck NV to TSS. About Inc. is a leading pan-European provider of vertical market software and vertical market platforms to clients in public and private sector markets. Operating and investing in countries and markets across Europe with long-term growth potential, Inc. acquires, builds and manages leading software companies providing specialized, mission-critical and high-impact software solutions that address the particular needs of customers. For further information, contact: Inc. Jamal Baksh, Chief Financial Officer Email: jbaksh@ About Constellation Software Inc. Constellation acquires, manages and builds vertical market software businesses that provide mission-critical software solutions. For further information, contact:
Yahoo
26-05-2025
- Business
- Yahoo
I'd Invest $7,000 in This Single Stock for Generational Wealth
Written by Amy Legate-Wolfe at The Motley Fool Canada When it comes to building wealth that lasts, some stocks simply stand out — not because they're flashy or all over the headlines but because they deliver quiet, consistent performance year after year. If I had $7,000 to invest today and wanted to set it aside for decades, maybe even for future generations, there's one Canadian stock I'd pick: (TSXV:TOI). Topicus isn't your typical growth company. Based in the Netherlands but listed on the TSX Venture Exchange, it specializes in acquiring and growing vertical market software businesses. That means it focuses on software companies that serve very specific industries. Think education, healthcare, public administration, and finance. These are areas where software becomes deeply embedded in operations, leading to high customer retention and recurring revenue. It's the kind of model that quietly compounds wealth over time. Topicus was spun out of Constellation Software in early 2021, and it follows a similar acquisition-focused playbook. But it has a more regional focus, with a growing presence across Europe. Since the spinout, it has been steadily snapping up niche software companies, integrating them into its decentralized structure, and encouraging them to keep growing. That strategy has worked incredibly well for Constellation, and Topicus appears to be on a similar path. Let's look at the numbers. In its most recent earnings report, Topicus posted revenue of €364.9 million for the fourth quarter (Q4) of 2024. That's up 18% from the same quarter a year ago. Net income came in at €56.2 million, a 32% increase from Q4 2023. For the full year, revenue rose 15% to €1.29 billion, and net income jumped 30% to €149.5 million. These numbers show a business that's growing both organically and through acquisitions, with solid control over costs. It's also worth noting that Topicus is very good at converting revenue into cash. In 2024, it generated €347.6 million in cash from operations, up 41% year over year. Free cash flow available to shareholders came in at €177.4 million, up 44% from 2023. That kind of cash generation gives it the flexibility to keep buying great businesses without relying on debt or issuing more shares. What makes Topicus so compelling for long-term investors is how boring and beautiful the business really is. Most of the software companies it owns serve very specific, regulated industries. Their customers rely on them every single day, and switching software providers would be a hassle. That means revenue is sticky, margins are high, and churn is low. It also means that once Topicus buys a company, that company tends to keep paying off for years or often decades. Now, the stock isn't exactly cheap. As of writing, Topicus trades at about $172 per share, giving it a market cap of roughly $13.4 billion. But paying a premium for quality is often worth it when the business compounds value over time. And Topicus has proven it knows how to do that. Its return on invested capital is consistently high, and it's reinvesting that capital in more businesses that meet its strict acquisition criteria. So, why would I put $7,000 into Topicus today? Because it offers the kind of compounding machine that few companies can match. It has a stable cash flow, sticky customers, and a clear path for long-term expansion. It's not trying to reinvent the wheel; it's just steadily adding more spokes to it. And that's exactly the kind of business you want when thinking about building wealth that lasts a generation or more. The post I'd Invest $7,000 in This Single Stock for Generational Wealth appeared first on The Motley Fool Canada. Before you buy stock in Inc., consider this: The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Inc. wasn't one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years. Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the 'eBay of Latin America' at the time of our recommendation, you'd have $21,345.77!* Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 24 percentage points since 2013*. See the Top Stocks * Returns as of 4/21/25 More reading Made in Canada: 5 Homegrown Stocks Ready for the 'Buy Local' Revolution [PREMIUM PICKS] Market Volatility Toolkit Best Canadian Stocks to Buy in 2025 Beginner Investors: 4 Top Canadian Stocks to Buy for 2025 5 Years From Now, You'll Probably Wish You Grabbed These Stocks Subscribe to Motley Fool Canada on YouTube Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends The Motley Fool recommends Constellation Software. The Motley Fool has a disclosure policy. 2025
