In the period between 2010 and 2019, the S&P/TSX Index climbed by 46.3%. At the start of 2010, the index was at 11,746.11. But a day before Christmas 2019, the TSX closed at 17,180.20, which is also the highest closing for the year.
If you had a good feel of the market within the decade and made excellent investment choices, you should be merry. Your gains should have been higher than the overall market too.
Otherwise, you must have sold some stocks that you should have held on to like Boyd Group Income Fund (TSX:BYD-UN) and Constellation Software (TSX:CSU). Both stocks are among the decade’s best and could be in the next.
Who would have thought that an operator of collision repair centres is number one on the leader board in the past decade? The company’s strategy was to acquire auto collision repair centres, regardless of size, then integrate the purchases into the business.
Boyd had 90 collision repair centres in 2010. That number, however, grew to 670 as I write this piece. Today, the group is the largest operator of non-franchised collision repair centres in North America. More than the consolidation strategy, you can say that the exponential growth was mainly due to bad driving.
Boyd exploded during the decade. In early January 2010, the share price was only $5.75. On December 24, 2019, Boyd’s closing price was $202.74. The increase represents a mind-blowing gain of 3,425.9%.
Had you bought at least $10,000 worth of shares, your windfall is $342,590. The level of return of this auto-body-shop conglomerate during the decade is astonishing but true.
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The strategy of Constellation Software is similar to Boyd’s. This $29.56 billion software application company is also a consolidator, albeit in the tech space. As early as 2010, it acquired 21 companies. The efforts of founder and CEO Mark Leonard are paying off handsomely.
Constellation’s aggressive growth-by-acquisition strategy is driving growth; it targets small tech startups in niche markets. The prospects need to have excellent management teams, consistent profits, and above-average growth.
When you look at the stock performance, the growth is exceedingly way beyond the above-average growth of the tech startups Constellation buys.
On January 4, 2010, CSU was trading at only $37.15. On Christmas Eve 2019, the price was $1,276.02, which represents a mind-boggling increase of 3,334.78%.
A mere $5,000 investment in January 2010 would be worth $166,739 on December 24, 2019. Every year, Constellation Software keeps posting new highs. The company is present in both the private and public sectors.
The TSX is full of surprises. Sometimes you needed to be like the investors of Boyd Group and Constellation Software 10 years ago. You must learn to time the market, limit your trading, and exercise patience to be a big winner.
As of this writing, the price of the collision repair center operator and the software empire is $202 and $1,394.90, respectively. You wonder now if the stocks have growth potentials left after a rousing ascent to the top. Some investors are already branding both as forever-hold stocks.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Constellation Software.