Dixon Mitchell Investment Counsel Buys the Dip: Adds $23 Million of Descartes Systems

Core Insights - Descartes Systems Group is a leading provider of SaaS-based logistics and supply chain management solutions, focusing on operational efficiency and regulatory compliance for logistics-intensive businesses globally [1][6] - The company operates a modular software-as-a-service business model, offering cloud-based solutions for routing, transportation management, customs compliance, and e-commerce warehouse management [2][11] - Descartes has experienced a decline in stock price, down 26% year-over-year, underperforming the S&P 500 by 46 percentage points [2] Company Performance - Dixon Mitchell Investment Counsel increased its stake in Descartes by acquiring 255,154 additional shares, raising its total position to 339,370 shares valued at approximately $31.96 million as of September 30, 2025 [3][4] - The company reported a sales growth of 14% annually over the last decade, with recent quarterly sales and net income up 11% and 20%, respectively [6][7] - Currently trading at a more reasonable valuation of 34 times free cash flow, Descartes is viewed as a top-tier compounder [8] Market Position - Descartes' suite of logistics and supply chain solutions is increasingly essential for various sectors, including retail, parcel delivery, airlines, and freight brokers [6] - The company has a competitive edge due to its scale, recurring revenue model, and comprehensive suite of interoperable applications [1] - Despite recent stock price challenges, the underlying business remains strong, indicating potential for recovery and growth [7]