The Best Canadian Stock U.S. Investors Are Missing

Let’s dive into one Canadian stock global investors should perhaps pay more attention to, at least in my view.

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Among all the growth stocks in the market I’ve looked at, I think investors in the U.S. and other parts of the world are missing out on a few Canadian gems.

These are companies that don’t get the same kind of coverage as their U.S. counterparts. That’s not to say there’s no coverage at all – there is a smaller, but robust analyst community in Canada that often steps in to fill the void.

But with less cachet comes opportunity. Even a stock that may be overlooked on a relative basis and may not climb as fast as others, when it does get noticed, can make some big moves ahead.

Here’s one of the largest and most overlooked companies I’ve got on my radar right now.

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Source: Getty Images

Constellation Software

I’ve covered Constellation Software (TSX:CSU) quite extensively over the years, and part of the reason why is due to what I feel is a relative under-representation in the financial media of this company.

Indeed, Constellation Software is a massive outfit. With a market capitalization of more than $80 billion. But despite its whopping size, Constellation currently only has eight analysts covering the name, with most being of Canadian origin.

That’s my main point. U.S. investors may simply not hear enough about this company to make an informed decision around whether Constellation Software fits in their portfolio. I think that’s a shame.

The company is among the top software aggregators in the market, buying small and mid-sized software firms and rolling them under the company’s diversified umbrella. In doing so, Constellation has found a way to earn above-market returns for investors for a very long time.

The numbers don’t lie

Looking at Constellation’s long-term growth trend, it’s clear to me that the company’s growth-by-acquisition business model is one that’s not only working, but scalable. With thousands of similar targets out there, investors stand to benefit from long-term growth, which I expect to continue.

Over the medium term, Constellation expects to grow its top line by around 30% per year, with operating income compounding at an expected range of 15%–16%. That’s incredible, and worth a look.

Fool contributor Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool recommends Constellation Software. The Motley Fool has a disclosure policy.

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