One sale and two additions, all with published quantities and limit prices; Constellation Software appears as Topicus's parent. Research legend: QT Qualtrim · SA Seeking Alpha · STK Stock Analysis. Written post with no timestamps — the At link opens the article.
| Ticker | Name | Research | View | What he said | At |
|---|---|---|---|---|---|
| KPG.AX | Kelly Partners Group Holdings | STK | Positive | BOUGHT — 7,700 shares, limit 4 AUD, half the Judges proceeds. "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." Three reasons: (1) "Plenty of runway — Kelly Partners Group should keep growing at tremendous rates going forward." (2) The forced-selling explanation: "In the past, Brett Kelly received quite some margin calls… I heard from a great source that the margin calls should be over now. The margin calls definitely had a negative impact on the stock price. As a result, the stock is now oversold." (3) Valuation on the accounting-sector metric: "P/NPATA 2027: 14.3x; 2028: 11.5x; 2029: 9.2x. That's cheap for a company that has doubled its revenue on average once every 3 years." Context: the 7 May list had it as the worst YTD performer on the whole watchlist at -48.8%, Strong+ conviction and STRONG BUY on only 2.08% modelled undervaluation. Brett Kelly shared the Omaha stage with the author. | read ↗ |
| TOI.V | Topicus.com | QT · SA · STK | Positive | BOUGHT — 290 shares, limit 102 CAD, the other half of the proceeds. "Topicus is a spin-off from Constellation Software. It's a serial acquirer focusing on Vertical Market Software (VMS) companies in Europe." The metric and the case are one sentence: "The most important metric to track for Topicus? Free Cash Flow Available To Shareholders (FCFA2S)… This means Topicus currently trades at a FCF Yield of 4.2%. It's one of the cheapest valuation levels they have ever traded at." Plus "plenty of runway and will keep growing at very attractive rates". Consistent with the 7 May STRONG BUY at Very Strong conviction and 48.8% undervalued. | read ↗ |
| CSU.TO | Constellation Software | QT · SA · STK · FA | Neutral | Named once, as Topicus's origin — "Topicus is a spin-off from Constellation Software" — which is also the shorthand for why the model is trusted: the same vertical-market-software roll-up playbook, applied in Europe. No separate view is expressed here; the full case was made a week earlier, where FCFA2S was likewise identified as the metric that matters. | read ↗ |
| JDG.L | Judges Scientific plc | STK | Negative | SOLD IN FULL — all 680 shares, limit 42.5 GBP (4,400 pence), bought March 2025. The reason is opportunity cost, not deterioration: "I still like Judges Scientific and I think it will continue to do well… Because I think there are other serial acquirers available at similar prices that have better growth opportunities." The evidence: "The company failed to grow since September 2022", with the next three years' expectations no better, while still at a 17.5x forward PE — "not very cheap for a company that is expected to not grow between 2022 and 2028." Causes: US federal research-funding cuts, Chinese competition on price and product, and dependence on universities and publicly funded labs. Corroborated first-hand: founder David Cicurel said "the challenges Judges Scientific is currently facing are the most severe in its history." Three key learnings published — a large acquisition by a serial acquirer is usually a bad sign (Geotek, May 2022, £80m, "suffering from the lumpiness of irregular coring expeditions"); reconsider when the founder steps down as CEO (Cicurel, February 2026); and limit exposure to government-budget-dependent customers. "We bought the company in March 2025 and didn't have much fun during our period as a shareholder. It's time to cut the weeds and water our flowers." | read ↗ |
Two notes. (1) The switch is within a single category. All three names are serial acquirers, so this is a swap of one roll-up for two others rather than a change in exposure — the stated logic ("other serial acquirers… at similar prices with better growth") is explicitly relative. (2) The margin-call argument rests on an unnamed source. "I heard from a great source that the margin calls should be over now" is doing real work in the Kelly Partners case — it converts a price fall into an oversold condition — and it is not verifiable from public disclosure.
A jargon-free summary of the thesis behind each argued name. (Renders on each name's consolidated page.)
Judges Scientific buys small makers of specialist laboratory instruments and runs them as a group. The entire holding — 680 shares — is being sold at a limit of 42.5 pounds, fourteen months after it was bought.
The reason is not that the company is bad. The write-up says plainly that he still likes it and expects it to do well. The reason is that the money can buy more growth elsewhere for the same price.
The problem is that the business has not grown at all since September 2022, and forecasts show no growth through 2028 either — six flat years. Yet the shares still cost 17.5 times next year's profits, which is a price for a growing company. Three causes: American federal research budgets are being cut and universities are the customers; Chinese competitors are undercutting on price and improving their products; and the customer base is concentrated in publicly funded laboratories. The founder himself said the difficulties are the worst in the company's history.
Three lessons are drawn, and they are worth keeping. When a company that grows by making many small acquisitions suddenly makes one large one, that is usually a warning — here it was Geotek, bought for £80 million in 2022, whose earnings swing with irregular seabed-drilling expeditions. When a founder stops being chief executive, revisit the whole case — Cicurel stepped down in February 2026. And be careful with companies whose customers are funded by a government budget, because that budget is a political decision.
Kelly Partners buys accounting firms in Australia — bookkeeping, tax and business advice — and runs them under a shared structure. Half the money from the Judges sale goes here: 7,700 shares at a limit of 4 Australian dollars.
The reason the shares are cheap is unusual and has nothing to do with the business. Brett Kelly, who runs the company, had borrowed against his own shareholding and received margin calls — demands to put up more money or sell. Forced selling by a founder pushes a share price down regardless of how the company is performing. The information acted on here is that those margin calls are now finished, which means the selling pressure should stop.
On value, the shares are measured against a metric used in the accounting sector — profit after tax but before writing off the cost of the firms acquired, which is the closest thing to real cash earnings for this kind of business. On that basis the shares cost 14.3 times expected 2027 profit, 11.5 times 2028, and 9.2 times 2029. For a company that has roughly doubled its revenue every three years, that is cheap.
The caveat is stated in the article and should be kept: those multiples only hold if the company hits ambitious growth targets.
Topicus was spun out of Constellation Software and does the same thing in Europe: it buys small software companies that serve one specific industry — the systems a dentist, a housing association or a local council runs on — and keeps them forever. The other half of the Judges proceeds goes here: 290 shares at a limit of 102 Canadian dollars.
Judging this kind of company by reported profit is misleading, because accounting rules force it to write off the cost of the software businesses it buys, which makes profits look far smaller than the cash actually generated. So the measure used is the cash genuinely available to shareholders after everything is paid.
On that measure the shares yield 4.2% — meaning you get 4.2 cents of real cash for every dollar of share price, one of the highest levels the company has ever offered, so one of the cheapest it has ever been.
The growth side of the argument is asserted rather than shown here: plenty of small European software companies left to buy, and continued strong growth expected.
Summary derived from the archived Compounding Quality post (text in transcript.txt) for personal study. Not investment advice. © Compounding Quality / Pieter Slegers for source material.