There are a bunch of reasons why investors should be owning Canadian software giant Constellation Software (Constellation Software Stock Quote, Charts, News, Analysts, Financials TSX:CSU), including the wide moat of having tonnes of businesses in its stable. But if you don\u2019t already own it, portfolio manager Chris Blumas thinks you may want to wait for a better entry point. \u201cConstellation is a company that I know very, very well. It's a wonderful company,\u201d says Blumas of Raymond James Investment Counsel, speaking on BNN Bloomberg on Tuesday. \u201cIt's a software company and what their focus is is acquiring smaller software companies. In terms of their financial model, they're a very, very disciplined acquirer,\u201d he said. \u201cThey have very high hurdle rate and they've done a lot of acquisitions over time.\u201d \u201cWhat they do is they buy other smaller software companies that aren't growing, and then they integrate them within their platform, and they've done a tremendous job compounding capital over the very long term. They\u2019re one of the best compounders in Canada, and it's a name that I know and I really, really like.\u201d Constellation has been one of the premier Canadian tech stocks to own over the past decade, delivering continuous growth in share price over the years, including this year where the stock is currently up about 26 per cent. That\u2019s compares well with the broader S&P\/TSX Composite which is up about 16 per cent. But those gains this year have made CSU perhaps a bit expensive at the moment, according to Blumas. \u201cI think the only thing you have to watch with Constellation is valuation,\u201d he said. \u201cIn terms of its current valuation, I would just wait for a little bit of a pullback here from time to time.\u201d \u201cSometimes given the acquisitions that are in the pipeline and contract renewals on the software side, they tend to have a lumpy quarter, and when they have these lumpy quarters and they miss expectations I think that's a really, really good time to swoop in and buy it,\u201d Blumas said. \u201cI think it's a great long term hold, so even if you went in at current levels the free cash flow yield is just a bit under three per cent right now, so \u2026 I would wait for a little bit more of a pullback,\u201d he said. Earlier this month, Constellation released its second quarter 2021 financials, showing overall revenue growth of 35 per cent year-over-year (14 per cent organic growth or eight per cent after adjusting for foreign exchange) for a topline of $1,249 million. Net income attributable to shareholders grew by seven per cent to $88 million or $4.16 per diluted share. Meanwhile, cash flows from operations dropped by 28 per cent for the quarter. On the M&A side, CSU completed $292 million worth of deals in the Q2, with the company reporting $122 million in aggregate acquisitions so far since the end of the quarter. Earlier this year, Constellation completed the spin-off of European software business Topicus (topicus.com Stock Quote, Charts, News, Analysts, Financials TSXV:CSU), giving CSU shareholders about 1.86 Topicus shares for every Constellation share. So far, Topicus, which trades on the TSX Venture Exchange, has been a winner, with its share price climbing a whopping 80 per cent since its debut on January 2. Blumas says there\u2019s value in owning both stocks.\u00a0 \u201cTopicus has just released one quarter as a separate public company, and it has a very similar M.O. to Constellation, it's just in a slightly different market \u2014 it\u2019s more focused on Europe,\u201d Blumas said. \u201cIt\u2019s not one that I've been adding to, just because of its size and its listing on the Venture, but I haven't sold it as well,\u201d he said. \u201cWith Topicus, I think it makes a lot of sense to watch and wait. I think in the end you'll do quite well in both of them because they have very similar operating attitudes in terms of capital allocation and I think the incentives and the structures in place for managers are very, very conducive to growth. So I do like both of these companies.\u201d Blumas says Constellation\u2019s strength lies in the diversity and breadth of its holdings, which make for a stability over time that\u2019s attractive for investors. \u201cAnything can happen what allows this one maybe a higher degree of certainty is it's an accumulation or an aggregation of so many smaller companies that no one product dominates the portfolio. So, they could have a problem with a single product and it wouldn't affect the whole ship,\u201d Blumas said. \u201cAnd so I think from a diversification standpoint in the software space, Constellation is absolutely, phenomenally well diversified. It\u2019s more of a private equity firm that focuses on software,\u201d he said. \u201cOver time, if growth in cash flows and earnings were to moderate a little bit, that could impact valuations. I think valuation is your biggest risk with Constellation,\u201d he said.