In short: Named alongside Watsco as a company that grew "sustainably with good returns doing more programmatic smaller acquisitions" — "enormously successful" but "out of the limelight," which is exactly why the average investor's perception of M&A is skewed toward the failures.
Roper is a collection of niche software and engineered-product businesses, assembled over many years by buying companies with high returns and low capital needs, then using their cash to buy the next one. Mayer names it in the same breath as Watsco as an example of the quiet, programmatic acquirer that has compounded "sustainably with good returns."
The reason it belongs in this conversation rather than a stock pitch: it is evidence that the acquirer-underperforms rule of thumb is a rule about a certain kind of acquirer — the big, levered, promotional kind — and not about acquisition as a strategy.
13:57But there's smaller bolt-ons. Lots of companies have been able to grow sustainably with good returns doing more programmatic smaller acquisitions. And you can think of there like Watsco and Roper of the world, and HEICO, however, 100 plus acquisitions in this time. So those companies have been enormously successful.
In short: A held position that delivered — +10%, the most since 2020: adjusted EPS $5.38 vs $5.29, revenue $2.11B vs $2.10B, FY EPS guidance raised to $22.15-22.30 (TD Cowen: "the lack of an issue is a positive in itself right now"). "We own some shares." The Q&A lesson: "Roper was one of the cheaper industrial software companies, and then they crushed — nobody was looking at that name. Being contrarian in this type of market is definitely a really important thing."
Roper is a collection of niche, high-margin software and instrumentation businesses — the unglamorous kind that quietly compounds. It's a position he already owns, and it jumped 10%, its biggest move since 2020, after beating earnings and raising full-year guidance.
The lesson he draws matters more than the stock: in a market obsessed with AI, Roper was one of the cheaper software names and "nobody was looking at that name" — so a merely-good quarter produced a big move. That's his template for where to hunt while everyone stares at the mega-caps: cheap, boring, un-followed quality.
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