1 Tech Stock Has Created Millionaires and Will Continue to Make More

Are you interested in a tech stock that has created millionaires? Find out which stock that is!

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When investors get started in the stock market, many of them dream of finding that one company that could turn them into a millionaire. Unfortunately, finding those stocks is a very tough task. What’s even tougher is holding shares long enough to turn you into a millionaire.

In fact, in the grand scheme of things, finding the millionaire-making stock is actually the easy part. What many people don’t realize is that after you find those companies, it’s important to continue adding to that position and continue holding shares even when times get rough.

Take Constellation Software (TSX:CSU), for example. It’s a stock that has turned many everyday Canadians into millionaires. However, even this stock has fallen by 20% or more on a number of occasions. However, if you had held onto your shares for a decade and even added more to that position, then you would be much richer than you would’ve been when you first bought those shares. In this article, I’ll discuss Constellation Software, a stock that has created millionaires and will continue to make more.

What is this company?

Constellation Software is a tech conglomerate. It acquires vertical market software (VMS) companies and then provides those businesses with the resources necessary to turn them into exceptional business units.

What I find interesting about Constellation Software is that it flat-out publishes what qualities it looks for in prospective acquisitions. In other words, Constellation Software tells everyone exactly what its strategy is. For those that aren’t familiar, Constellation Software requires that a business have an outstanding manager, consistent profitability, and above-average growth.

Using this playbook, Constellation Software has managed to grow at a very impressive rate. Looking at its stock performance since its initial public offering, we can see that investors have rewarded the stock accordingly.

In 2021, Constellation Software’s founder and president, Mark Leonard, announced that the company would begin targeting large VMS businesses for acquisition. This is a massive change in the company’s operations since it had been focusing on small- and medium-sized VMS businesses for much of its history.

Looking at its stock price since then, and considering that 2022 was a write-off for many tech stocks considering the global economy, we can safely say that the decision to target large VMS businesses has been a good one. Over the past year alone, Constellation Software stock has gained 57%. Compare that to the about 6% gain by the TSX over the same period.

Should you buy Constellation Software stock?

I think Constellation Software stock is a solid buy today, despite all of the gains that it has already generated. Constellation Software is a proven winner in the stock market. It continues to be led by its founder, Mark Leonard, which is a major selling point for me. I strongly believe that founder-led companies are much more intriguing to invest in since investors share in the success of the individual(s) that created the company. Don’t miss out on this extraordinary opportunity today.

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 Jed Lloren has positions in Constellation Software. The Motley Fool recommends Constellation Software. The Motley Fool has a disclosure policy.

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