In the event you’re going to belief one inventory for the following 10 years, decide the one you gained’t really feel tempted to commerce on a random Tuesday. A decade-long maintain wins when the enterprise retains compounding by boring months, ugly headlinesand the occasional stomach-dropping sell-off. The aim is just not perfection. It’s sturdiness. You need recurring income, a tradition that protects capital, and a mannequin that improves because it scales. Discover that blend and time does the heavy lifting.
Contemplate TOI
Topicus.com (TSXV: TOI) presents that sort of quiet compounding from an sudden place. The TSX inventory acquires, manages, and builds vertical market software program companies, primarily in Europe. It owns area of interest software program that runs important duties for particular industries, like billing, compliance, scheduling, and different back-office work. Prospects stick round as a result of switching techniques prices cash and creates threat. That stickiness can translate into regular money stream, which it goals to reinvest into extra acquisitions and inside enhancements.
Over the past yr, Topicus caught to its playbook. Plenty of small, wise offers and little or no drama. In its third-quarter 2025 replace, the TSX inventory stated it accomplished acquisitions for mixture money consideration of €11.4 million, with deferred funds valued at €7.8 million for whole consideration of €19.2 million. It’s not making an attempt to swing for one large guess, however making an attempt to stack many good, boring selections till the mathematics turns into irresistible.
The louder storyline has been Asseco Poland. Topicus constructed a place by its subsidiary and, in October 2025, it accomplished an settlement to accumulate 14.8% of Asseco’s treasury shares after receiving required approvals. That transfer reveals Topicus can deploy capital past tiny tuck-ins. It additionally provides complexity, and complexity can spook traders who simply need a clear, repeatable compounding machine. Nonetheless, the TSX inventory hints at an extended runway in a bigger European software program ecosystem.
Into earnings
Now for the earnings. Within the third quarter ended Sept. 30, 2025, income elevated 24% to €387.9 million, and it reported 3% natural development. Money flows from operations rose 53% to €48.4 million. Free money stream obtainable to shareholders greater than doubled to €22.3 million. These money metrics matter for a serial acquirer, as money funds the following deal with out relying available on the market’s temper.
The headline revenue line confirmed a web lack of €120.9 million, or €0.94 per diluted share, in contrast with web earnings of €38 million a yr earlier. Administration tied that loss primarily to a €221.7 million expense linked to the way it recorded its Q1 2025 Asseco funding underneath the fairness methodology, which it stated offsets features recorded earlier in 2025. The TSX inventory additionally recorded €60.7 million of earnings from mark-to-market changes on derivatives tied to its binding settlement to accumulate extra of Asseco. So whereas the money engine improvedaccounting round Asseco made the earnings line look ugly.
Trying to 2026, the trail stays easy. The TSX inventory must hold shopping for the precise companies on the proper value, then hold reinvesting money into extra offers. Vertical market software program can maintain up effectively in slowdowns as a result of clients nonetheless want techniques that hold the lights on. The primary threat is distraction or overreach round larger investments, as a result of traders purchase this identify for repeatability. If administration stays disciplined, compounding can hold working even with out a booming economic system.
Backside line
Valuation is the trade-off for that belief. Current market information places it round a $7.2 billion market cap, and it trades at a really excessive 171.8 instances earnings, which displays each a premium for high quality and distorted earnings from one-off gadgets. Meaning you shouldn’t purchase it anticipating a fast pop. You purchase it since you imagine the acquisition tradition can hold turning regular money into long-term development. So, the TSX inventory could possibly be a purchase for affected person traders who can ignore quarterly noise, and it could possibly be a foul purchase for anybody who wants quick outcomes or hates drawdowns.