It’s over the long haul where you’ll often generate the best returns from investing in the stock market. Even investing a modest amount of money in a top stock can result in life-changing profits in the future, provided you stay the course and remain invested.
Targeting growth stocks is a fantastic way to do that. And one of the best ones on the TSX over the past decade has been tech company Constellation Software (TSX:CSU). A $10,000 investment in the stock 10 years ago would now be worth around $130,000.
The diversified software company provides businesses in various industries with customized solutions. It has more than 125,000 customers around the world, spanning over 100 countries. Through acquisitions, it has been able to aggressively grow its operations. And for shareholders, that has resulted in some mammoth returns.
In the trailing 12 months, Constellation has generated $9.7 billion in revenue. That’s a significant acceleration since 2020, when for the full year its revenue came in at less than $4 billion.
The one drawback right now is that with Constellation’s market cap hovering around $100 billion, investors are paying a hefty multiple for the business; its price-to-earnings (P/E) multiple is more than 110. But based on analyst estimates, its forward P/E multiple is much more modest at 33.
Given the varied industries it operates in and aggressive growth strategy, Constellation may still be a good buy, especially as more companies look to advance their tech capabilities amid the rising popularity of artificial intelligence and the new opportunities that may open up for their operations down the road.
