Title: Position Switch (sell Judges Scientific; add to Topicus and Kelly Partners) Show: Compounding Quality (Substack, paid post — compoundingquality.net) Guest: Pieter Slegers (signed "Pieter"; byline "Compounding Quality") Date: 2026-05-31 URL: https://www.compoundingquality.net/p/position-switch-7f8 Length: written post — no timestamps Note: Paid-subscriber post captured via Stephen's logged-in session. Body text verbatim; UI chrome removed. Fiscal.ai chart panels noted inline as [Image — ...]. A transaction post: all three orders (quantities and limit prices) are quoted exactly as published.
Investing is a game of opportunity costs.
The goal?
Generate the most returns while taking risks you feel comfortable with.
Today it's time to make a change in Our Portfolio.
We will sell one company and use the proceeds to buy more of two companies we currently own.
I should apologize
Every time I sell a stock, I should apologize.
You are an invaluable reader and there is only one reason why we decide to sell a stock...
... When I notice I made a mistake.
As Charlie Munger said:
"The best time to sell a great stock is almost never."
The only valid reason to sell a quality stock? One of the most wonderful companies in the world?
When you notice you were wrong.
The investment thesis is no longer intact and the company is losing (some of) its moat.
Today it's time to sell a stock in Our Portfolio as I think there are better opportunities elsewhere.
And that's why I want to apologize to you.
I made a mistake here and I'm taking full responsibility for it.
Unfortunately, making mistakes is part of the game.
We should always keep the rule of three from Francois Rochon in mind:
One year out of three, the stock market will go down at least 10%
One stock out of three that we buy will be a disappointment
One year out of three, we will underperform the index
However, this doesn't mean I don't feel bad about this.
I feel personally responsible.
That's why I will try to share the key learnings with you.
Here's what we'll do:
We are selling one company
We are using the proceeds to add to 2 companies with more upside potential
Let's dive into the company names.
Transactions
Selling Judges Scientific
Buying more of Topicus
Buying more of Kelly Partners Group
Judges Scientific ($JDG)
How does the company make money?
Judges Scientific acquires and operates niche scientific instrument makers, making money by selling highly specialized lab equipment.
Why we are selling Judges Scientific
Judges Scientific is a serial acquirer in the scientific instrument industry.
First of all, don't get me wrong on this one.
I still like Judges Scientific and I think it will continue to do well in the years ahead.
Why would you decide selling the company in that case?
Because I think there are other serial acquirers available at similar prices that have better growth opportunities.
The entire life sciences industry has been struggling recently. This hasn't been different for Judges Scientific.
Why?
US research funding slowdown: Federal budget cuts are reducing research spending
Increasing Chinese competition: Competitive pricing and better offerings could pressure Judges' market share
Customer concentration risk: Heavy dependence on universities and publicly funded labs.
As a result of this, JDG's growth has stagnated.
The company failed to grow since September 2022.
[Image — Source: Fiscal.ai]
If we look at the expectations for the next 3 years, the outlook doesn't look better.
[Image — Source: Fiscal.ai]
When I last talked to David Cicurel, the founder of Judges Scientific, he mentioned the challenges Judges Scientific is currently facing are the most severe in its history.
While the growth is stagnating, the company still trades at a Forward PE of 17.5x.
It's not very cheap for a company that is expected to not grow between 2022 and 2028.
Doesn't it make sense it would be better to invest in other serial acquirers that:
Are trading at more or less the same valuation level
Where the evolution of its revenue look as follows:
[Image — Source: Fiscal.ai]
For me it does, that's why we decide to say goodbye to Judges Scientific.
Key learnings
Here are some key learnings from the investment:
When a serial acquirer executes a large acquisitions, it's usually a bad sign
JDG acquired Geotek in May 2022 for GBP 80m
They are suffering from the lumpiness of irregular coring expeditions
When the Founder steps down as a CEO, it's time to reconsider the investment case
David Cicurel stepped down in February 2026
Limit your exposure to companies that could heavily be influenced by geopolitical decisions
JDG's end customers are universities and research institutions
Their budgets are directly dependent on US federal funding
The Trump administration is currently cutting aggressively
Transaction JDG
We sell our entire stake of Q 680 with a limit price of 42.5 GBP (4.400 pence).
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 (bad companies) and water our flowers (great companies).
Using the proceeds
The money that is freed from selling Judges Scientific will be used to buy more to two companies in Our Portfolio.
Kelly Partners Group
Topicus
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 are we adding more?
I was on stage with Brett Kelly in Omaha recently.
There are a few reasons why I think Kelly Partners Group is interesting today.
1. Plenty of runway
Kelly Partners Group should keep growing at tremendous rates going forward.
2. Margin calls
In the past, Brett Kelly received quite some margin calls.
We wrote extensively about this in the Community and in this update.
The good news?
I heard from a great source that the margins 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.
This provides potential opportunities for us.
3. KPG looks cheap right now
If KPG can achieve their ambitious growth targets, here's what the valuation looks like:
P/NPATA 2027: 14.3x
P/NPATA 2028: 11.5x
P/NPATA 2029: 9.2x
That's cheap for a company that has doubled its revenue on average once every 3 years.
Transaction KPG
We buy Q 7.700 with a limit price of 4 AUD.
This equals half of the proceeds from Judges Scientific.
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 are we adding more?
The most important metric to track for Topicus?
Free Cash Flow Available To Shareholders (FCFA2S).
[Image — Source: Fiscal.ai]
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.
In the meantime, Topicus has plenty of runway and will keep growing at very attractive rates.
Here's how the revenue is expected to evolve going forward.
[Image — Source: Fiscal.ai]
Transaction TOI.V
We buy Q 290 with a limit price of 102 CAD.
This equals half of the proceeds from Judges Scientific.
Conclusion
General Rules: Only sell when the investment thesis is broken, as mistakes are inevitable and 1 in 3 stocks will disappoint.
Selling Judges Scientific (JDG):
Selling all 680 shares at a limit price of 42.5 GBP
Growth has stagnated since 2022 with no recovery expected through 2028, yet the stock remains expensive at 17.5x forward PE
Buying Kelly Partners Group (KPG):
Buying 7,700 shares at a limit price of 4 AUD limit
A cheap, oversold serial acquirer of accounting firms trading at just 9.2x P/NPATA by 2029
Buying Topicus (TOI.V):
Buying 290 shares at a limit price of 102 CAD
A Constellation Software spin-off trading at a historically low 4.2% FCF yield with continued strong European VMS growth expected
Happy Compounding!
Everything In Life Compounds Pieter