The stock of Canada’s Constellation Software (TSE:CSU) fell as much as 12% on Sept. 25 after company president Mark Leonard abruptly resigned effective immediately.
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In a news release, Constellation Software said that Leonard made the decision to resign for health reasons, without providing more details. Mark Miller, who is currently the chief operating officer (COO) of Constellation Software, has been appointed the company’s new president by the board of directors.
Constellation Software added that Leonard will remain a director on the board, and that Mr. Miller’s other roles within Constellation, including his position as COO, will remain unchanged. “On behalf of the Board and all of the employees of Constellation, I’d like to wish Mark a full and swift recovery,” said John Billowits, chairman of the board of Constellation Software in the news release.
CSU stock fell as much as 12% on news of Leonard’s resignation. However, the stock quickly recovered a bit and is down about 8% mid-morning and trading at C$3,800 per share on Sept. 25.
Big Shoes
Mark Leonard founded Constellation Software in 1995 and has been the driving force behind the company, turning it into one of Canada’s most successful publicly traded concerns. A holding company that is a serial acquirer of specialty software firms, Constellation Software is often referred to as Canada’s Berkshire Hathaway (BRK.B).
For his part, Leonard is viewed as a visionary and world class capital allocator akin to Warren Buffett. Leonard is also known for heavily reinvesting in Constellation Software, requiring staff to put a portion of their annual bonus into company stock. CSU stock has risen 172% over the past five years but has grown more than 20,000% since the company went public in 2006.
In the news release announcing his resignation, Mark Leonard said: “The Board and I have complete confidence in Mark Miller and our executive team to execute on Constellation’s business plan. Mark Miller has been a trusted adviser and a driving force within Constellation’s executive leadership team for over thirty years and I can think of no one more experienced, knowledgeable and capable to lead the company at this time.”
Is CSU Stock a Buy?
The stock of Constellation Software has a consensus Strong Buy rating among five Wall Street analysts. That rating is based on five Buy recommendations issued in the last three months. The average CSU price target of C$5,680.00 implies 48.50% upside from current levels.
