Millionaire Maker: This 1 Stock Could Make You Rich

This multi-billion-dollar market cap tech stock could be an ideal addition to your portfolio for long-term wealth growth.

| More on:
financial freedom sign

Image source: Getty Images

Stock market investing has become increasingly popular in recent years. Many new investors are excited by the prospect of striking gold and becoming millionaires by making the right investment decisions. Becoming a millionaire through stock market investing is not something you can accomplish overnight. It requires discipline and making well-informed investment decisions.

It would be a dream to find that one stock that can provide you with the answer to all your problems by giving you a ton of upside. Finding undervalued stocks that have the potential to deliver stellar long-term returns on the TSX is difficult but not impossible. When seasoned investors search for undervalued stocks, tech stocks do not typically come to mind.

However, the downturn in the tech industry has opened up the opportunity for value-seeking Canadians to invest in technology stocks at significantly lower prices. Of course, it is important to remember that investing in tech stocks is still risky amid market volatility. Many top tech stocks trading for discounts are not undervalued. The downturn brought them down to more reasonable valuations.

You must conduct your due diligence to identify high-quality stocks with the potential to deliver long-term returns. Constellation Software (TSX:CSU) is one such stock you can consider. As of this writing, Constellation Software stock trades for $2,079.45 per share, up by over 2,000% in the last decade.

Today, I will discuss this millionaire-maker stock to help you determine whether it can be a stock worth adding to your investment portfolio.

Efficient and stable business

Constellation Software is a $44.07 billion market capitalization diversified Canadian software company. The company is headquartered in Toronto and specializes in acquiring small- and medium-sized vertical market software businesses. Constellation Software has grown substantially over the last decade by acquiring such businesses and helping them grow under its umbrella.

Constellation Software, unlike most tech businesses, acts as an industry finance manager. Its stable and efficient business model has contributed to its stellar growth through the years, setting it apart from most other tech stocks on the TSX. Constellation Software can offer long-term growth potential with plans for a change in tack.

Strong long-term growth potential

Mark Leonard, the former venture capitalist who founded the company and leads Constellation Software, plans to expand its acquisition strategy. Instead of focusing solely on small- and medium-sized vertical market software businesses, it plans on acquiring larger vertical market software businesses soon.

It is too soon to say how changing its acquisition strategy will impact the company’s growth. Successful execution of this strategy can set the company up for stellar long-term growth. The inherent diversity in its business model and its consistent financial growth have driven the stock upward over the decades. The new strategy might boost its growth in the coming decades.

Foolish takeaway

Since it went public, Constellation Software stock has been a millionaire maker for its early investors. It might not be able to repeat the same performance in the next decade. However, successfully executing its strategy to diversify into acquiring larger businesses might still deliver excellent returns on your investment.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Constellation Software.

More on Dividend Stocks

edit Sale sign, value, discount
Dividend Stocks

3 Cheap Dividend Stocks (Down Over 30%) to Buy in January 2023

Given their discounted stock prices and high yields, these three cheap dividend stocks could be attractive for income-seeking investors.

Read more »

A worker drinks out of a mug in an office.
Dividend Stocks

TFSA Investors: Earn Passive Income With 3 Blue-Chip Stocks

TFSA investors can worry less about a recession and earn passive income with three blue-chip stocks as core holdings.

Read more »

Hourglass projecting a dollar sign as shadow
Dividend Stocks

Is Now the Right Time to Buy Consumer Discretionary Stocks?

Investors cannot paint consumer discretionary stocks with a wide brush. Each stock must be investigated individually. Here's why.

Read more »

Golden crown on a red velvet background
Dividend Stocks

2 Ultra-Stable Canadian Stocks Just Crowned as Dividend Aristocrats for 2023

Waste Connections (TSX:WCN) stock and another Dividend Aristocrat could help investors crush the markets in 2023.

Read more »

Golden crown on a red velvet background
Dividend Stocks

Create $200 in Passive Income Every Quarter From 1 Defensive Stock

Risk-averse investors can seek safety in a defensive stock and earn more in passive income in 2023 and beyond.

Read more »

Dividend Stocks

Slow and Steady: Buy this Railroad Stock Now to Win the Race

Investors looking for a solid and growing income should pick up shares in this railroad.

Read more »

retirees and finances
Dividend Stocks

RRSP Investors: Should You be Worried During a Recession?

RRSP savers might feel like gagging as they watch their investments fall, but stay strong! Especially with these TSX stocks.

Read more »

Payday ringed on a calendar
Dividend Stocks

Money for Nothing: 2 High-Yield TSX Stocks That Pay You Dividends Every Month

Two resilient, high-yield TSX stocks in the quick-service restaurant industry are among the select few that pay monthly dividends.

Read more »