Title: Portfolio Update: April 2026 — The stocks we own (Part I: Very Strong & Strong+ convictions) Show: Compounding Quality (Substack, compoundingquality.net) Guest: Pieter Slegers (author) Date: 2026-04-16 URL: https://www.compoundingquality.net/p/portfolio-update-april-2026 Length: written post (~100-page portfolio update, split in parts; this is Part I) Note: Written post — no timestamps. Paid-subscriber post captured via logged-in session. Body text verbatim; UI chrome (like/share counts, registration CTAs) removed. Part II ("Strong" and "Medium" convictions) was published separately on the following Sunday. =====
Hi Partner 👋
It's time for another Portfolio Update.
And let me start with a serious warning: this update will be very extensive. It has over 100 (!) pages. That's why it's split up in multiple parts.
Portfolio Update April 2026
Today we'll switch gears a little bit. Over the past few weeks, I've been thinking a lot about our current positioning.
Which companies am I the most sure about? For which companies is the conviction level lower? And which companies are we considering adding to the Portfolio?
Our Portfolio
For full transparency, Partners of Compounding Quality have full transparency to the Portfolio.
We are invested in wonderful companies that continue to generate more shareholder value year after year.
There are four conviction levels in Our Portfolio: - Very Strong (Our favorite companies right now) - Strong+ (Strong convictions we have no single doubt about) - Strong (Proud owners but there are some risks involved) - Medium (Should we consider selling these stocks?)
We currently own 18 companies.
Please note that tonight we are giving an exclusive webinar for Partners going over every single position in the Portfolio.
1. Strongest convictions in the Portfolio
1.1. Very Strong Convictions
Medpace ($MEDP)
How does the company make money? Medpace is a company that helps drug and medical device makers test and develop new treatments by managing clinical trials and research.
Why is the conviction 'Very Strong'? Medpace is an amazing company. On top of that, August Troendle is one of the best capital allocators in the world. The only thing not to like about Medpace? The current valuation level. Today, the company trades at a Forward PE of 30.3x. It's the perfect example of a wonderful company at a fair price.
Games Workshop ($GAW.L)
How does the company make money? Games Workshop is a company that makes and sells tabletop games. Players use miniature figures to play battles in fantasy or science fiction worlds.
Why is the conviction 'Very Strong'? Games Workshop is the perfect example of an amazing compounder. The stock is up +14,300% (143x) since 1994. The company has two things massively working in their favor: the most loyal clients in the world and a lot of pricing power. Every year, they raise the price of their products by 4-5% and players just keep buying more. There also is a lot of optionality in their collaboration with Amazon. Amazon has been granted exclusive rights to adapt Games Workshop's Warhammer 40,000 universe into films and TV series.
Kinsale Capital ($KNSL)
How does the company make money? Kinsale Capital is an established and expanding specialty insurance company focused exclusively on Excess and Surplus lines ("E&S") market in the United States.
Why is the conviction 'Very Strong'? There are 3 main reasons why Kinsale Capital is an amazing business: the company is still led by its founder Mike Kehoe; a market leader that plans to double its market share over the next few years; strong technological advantage with the best operating metrics in the industry. Today you can buy Kinsale Capital at its cheapest valuation level ever.
Ameriprise Financial ($AMP)
How does the company make money? Ameriprise Financial is a leading diversified financial services firm with $1.3 trillion in assets under management and administration.
Why is the conviction 'Very Strong'? Ameriprise Financial is a strong business that just keeps executing. It's the best performing stock within the S&P 500 Financials Index. Since its IPO in 2005, the stock doubled on average every 5 years. Talking about compounding! Management expects to return about 85% of capital to shareholders via dividends and buybacks. As the company currently trades at an earnings yield of 10%, this means you'll receive 8.5% per year via dividends and share buybacks as an investor. Combine this 8.5% with around 3-4% in organic revenue growth and 6-7% in earnings growth and you get an expected return of 14.5%-15.5%.
Visa ($V)
How does the company make money? Visa makes money by processing payments and charging fees for using its card network. They dominate the market together with Mastercard.
Why is the conviction 'Very Strong'? Visa is one of the most boring, high quality companies we own. It's a (Free) Cash Flow machine. It's virtually impossible to take away the oligopoly of Visa and Mastercard. The company still has the tailwind of less and less cash being used in the world. I see no reason to believe the growth will slow down. Visa can now be bought at one of its cheapest valuation levels of the past 10 years.
Constellation Software ($CSU)
How does the company make money? Constellation Software is the best serial acquirer in the world. The stock has consistently compounded at 30% per year. Just 15 years after their IPO in 2006, Constellation had already joined the 100-bagger club. It's an amazing business.
Why is the conviction 'Very Strong'? Mr. Market is very depressive about Constellation Software right now. It even caused Mohnish Pabrai, a deep value investor, to buy Constellation Software. The most important metric to look at for Constellation Software (and Topicus) is the Free Cash Flow Available To Shareholders (FCFA2S). This number equaled $1,683 USD million in 2025. If we assume CSU can grow its FCFA2S by 15% this year, the company now trades at a FCF Yield of 4.8%. This is the cheapest valuation level the company has ever traded at.
Topicus ($TOI.V)
How does the company make money? Topicus is a spin-off from Constellation Software. It's a serial acquirer focusing on Vertical Market Software (VMS) companies in Europe.
Why is the conviction 'Very Strong'? Topicus is an amazing serial acquirer with plenty of growth opportunities going forward. The goal? Reinvest all their Free Cash Flow to keep acquiring other Vertical Market Software companies. The interesting thing about Topicus compared to Constellation Software is that Topicus is smaller and is targeting VMS companies in Europe. This gives them more upside potential as the larger you are, the harder it is to grow. The best way to value Topicus is by looking at its Free Cash Flow Attributable to Shareholders (just like Constellation Software). In 2025, this number equaled €218.7 million. If we assume Topicus can grow its FCFA2S by 20% in 2026, the forward FCF Yield equals 5.1%. This is, just like for Constellation Software, one of its cheapest valuation levels ever.
Brookfield Corporation ($BN)
How does the company make money? Brookfield Corporation is a global owner of real assets and a world-class manager of other people's capital. It's one of the world's most sophisticated investors in infrastructure, real estate, renewables, and private equity.
Why is the conviction 'Very Strong'? I want to make Brookfield Corporation (one of) the largest positions in Our Portfolio. Why? Because it could be the ultimate cornerstone for every quality investor. By investing in Brookfield Corporation, we are investing in a structural winner led by one of the best capital allocators in the world. I think the company will continue to thrive over the next few decades. In essence it's very simple: winners tend to keep on winning. Brookfield Corporation estimates its intrinsic value currently equals $68. As the stock trades at $46.5 today, this means you can buy the company at a discount of 30% compared to its NAV. This is a very large discount from a historical perspective. Brookfield Corporation currently has $2.3 in Distributable Earnings. The company expects this number to grow to $6.95 by 2030 (a 25% CAGR). As the current stock price equals $46.5, this means you can buy the company at a P/E of 20.2x (and 6.7x based on expected 2030 numbers). That's cheap!
1.2. Strong Convictions (+)
Now let's dive in the Strong Convictions (+). These are companies we strongly believe in, but not as much as the 'Strongest Convictions'.
Kelly Partners Group ($KPG)
How does the company make money? Kelly Partners Group is a serial acquirer providing services like bookkeeping, tax planning, and advice on how to grow a business or handle money wisely.
Why is the conviction 'Strong+'? The stock got hammered recently. Kelly Partners Group is down 39.8% since the beginning of the year and 60% from its peak. In the meantime, the underlying performance was (very) good. So let's make a short valuation update for Kelly Partners Group. Kelly Partners thinks NPATA (Net Profits After Tax with Amortization) is the best way to measure its profits. Why? Because amortization expenses are required by accounting rules, but they're not a real cash expense. This is very similar to Warren Buffett's idea of 'Owner Earnings'. KPG expects to generate $11 million in NPATA in 2026. This means they currently trade at a forward Price/NPATA of 20.8x. That's not expensive given the long runrate for the company. Here's how much NPATA they want to generate in the future: NPATA 2027: $16 million; NPATA 2028: $20 million; NPATA 2029: $25 million. If KPG would achieve its targets, here's what the valuation levels would look like: NPATA 2027: 14.3x; NPATA 2028: 11.5x; NPATA 2029: 9.2x.
The reason KPG is a 'Strong' Conviction and not 'Strongest' conviction? Brett Kelly. He's both an asset and a liability. Sometimes I ask myself whether he's a great Owner-Operator, or whether he's a 'marketeer' for investors like us. The thing I didn't like to see this week (AFR, 2026-04-13: "Kelly Partners CEO hit with margin call on $64m in pledged shares"): Brett Kelly took out personal loans using his own company shares as collateral. When the stock price dropped sharply, lenders issued margin calls, demanding more money or assets to cover their risk. Brett Kelly had transferred over 7 million shares (representing 34% of his stake) into holding accounts prior to the decline. The share price drop ultimately forced him to hand over that entire holding to an undisclosed lender. This put a lot of pressure on the stock price. This is not good governance if you ask me. It's something Warren Buffett would never ever do. I'm having a call with Brett Kelly (the CEO) next Monday and will see him in Omaha again later this month. I will update Partners shortly about the key findings.
Brown & Brown ($BRO)
How does the company make money? Brown & Brown is an American insurance company. They act as a middleman to find the right coverage for things like cars, homes, health, or businesses.
Why is the conviction 'Strong+'? Brown & Brown is an amazing company with incredible track record. The company enjoys recurring revenue, strong free cash flow, and very low capital needs. Since 2001, Brown & Brown increased by +1,550% (CAGR: +12.1%). I think Brown & Brown will continue to thrive in the years ahead.
The reason it's a 'Strong+' and not 'Strongest Conviction'? The large acquisition of Accession Risk Management last year. Brown & Brown is a serial acquirer. This means it's normal that the company regularly does acquisitions. The 'problem' with the Accession acquisition is that it was a very large one. We prefer Serial Acquirers to execute a lot of small acquisitions.
What is Accession Risk Management? Accession Risk Management is a significant player in the insurance industry, with over 5,000 professionals operating across the U.S. and Canada. The company primarily focuses on the middle-market segment and has a strong track record of growth, having completed more than 190 acquisitions to date. In 2024, Accession reported pro forma revenue of $1.7 billion and placed $15.7 billion in premiums. Its revenue has grown rapidly over the past few years, rising from $663 million in 2020 to $1.7 billion today.
The deal in bullet points: $9.83 billion cash-and-stock acquisition. $4 billion to be raised, leading to 13.3% shareholder dilution. BRO paying 5.7x revenue (compared to BRO's 6.2x earnings multiple). Appears expensive, but Accession's revenue is predictable and growing fast. Dilution of 13.3% offset by expected net income contribution. Accession could add ~$148 million in net income (assuming BRO margins), roughly +13.6% to BRO's net income.
Brown & Brown now trades at the cheapest valuation level of the past 10 years… And it's not even close!
HG Capital Trust ($HGT)
How does the company make money? HG Capital Trust is the Private Equity company in Our Portfolio. They invest in and grow unlisted software and technology services companies, making money from capital appreciation and dividends.
Why is the conviction 'Strong+'? Most Private Equity firms have a very strong track record in creating shareholder value. They tend to outperform the market in general. Via HG Capital Trust, we have exposure to this interesting asset class. HG Capital Trust is a Private Equity leader regarding software companies in Europe. They focus on mission critical software companies. These companies are growing very strongly. Here are the results from last year: Sales growth: +17%; EBITDA growth: +19%; EBITDA margin: 33%. HG Capital Trust currently has an NAV of £5.62. This means the company is trading at a discount of almost 30% currently. This is very high from an historical perspective.
Zoetis ($ZTS)
How does the company make money? Zoetis makes money by selling medicines, vaccines, diagnostics, and other health products for livestock and pets to veterinarians, farmers, and distributors worldwide.
Why is the conviction 'Strong+'? Loneliness is becoming a serious problem in our society. More and more people are spending time alone. As a result, people are treating their pets as a full family member nowadays. Zoetis fully benefits from this as they provide animal health medicines. On top of that, Zoetis is cheap. The company currently trades at a Forward PE of just 17.2x. This is the cheapest valuation level of the past 10 years (do you start noticing a trend here? A lot of our companies are trading at very cheap valuation levels).
Conclusion
That's it for today. We covered the 'Very Strong' and 'Strong+' convictions today. On Sunday, we'll cover the 'Strong' and 'Medium' convictions.
Everything in life compounds Team Compounding Quality
Used sources: Interactive Brokers (portfolio data and executing all transactions); Fiscal.ai (financial data).