Why this money manager is thinking long-term with Meta and Alimentation Couche-Tard

Money manager Jason Del Vicario’s approach to investing is to choose stocks he can commit to long-term, then hunker down.

The portfolio manager with Vancouver-based Hillside Wealth Management at iA Private Wealth Inc. has owned some stocks since he created his fund 11 years ago – three of which currently make up about one-third of his equity portfolio.

“It speaks to our concentrated approach,” says Mr. Del Vicario, who oversees about $275-million in assets. “And if we were to part ways with one of those stocks, that decision wouldn’t be made in a week or a month, or as a result of just one or two decisions the company has made. We think and behave long-term.”

Mr. Del Vicario says his firm’s strategy of focusing on high-quality businesses – which he defines as those that are founder-led and owned and have produced consistently high returns on invested capital – has paid off over the long term.

The firm’s all-equity fund has returned 9 per cent so far this year. The one-year return is 18.9 per cent, while the three- and five-year annualized returns are 22.5 per cent and 15.9 per cent, respectively. Since the fund’s inception on Sept. 2, 2014, its annualized return is 10.3 per cent. The performance is as of June 30 and based on total returns, net of fees.

The Globe spoke with Mr. Del Vicario about his top picks – all stocks he’s owned since 2014 – and a stock he sold recently:

Let’s discuss the three stocks that make up a third of your portfolio and why you own them.

Constellation Software Inc. CSU-T is a stock we bought at $250 a share in 2014. It currently makes up about 15 per cent of our equity portfolio. We’ve never added to this name, but we have trimmed it a bit over the years – including in July, 2024, at $4,300 a share and at $4,800 a share in January – when we felt the valuation was a bit stretched.

The business, which acquires and holds software companies used in a wide range of sectors, was founded by its president, Mark Leonard, in 1995. It has done more than 1,200 acquisitions since going public in 2006 and has only ever sold one. It has a wide moat because the companies it acquires are smaller and of less interest to private capital.

The biggest risk with Constellation Software is its high valuation. It’s very expensive. We wouldn’t recommend this as a stock to buy and own today for a short period, given the valuation, but believe it’s still a good buy for longer-term investors.

Meta Platforms Inc. META-Q is a stock we bought in 2014 for US$74 a share and have added to over the years – including in February, 2022, for US$210, June, 2022, for US$150 and October, 2022, at US$98. We also trimmed it by between 2 and 5 per cent in May and July, 2023, February, 2024, and this past February. It currently makes up 15 per cent of our equity portfolio.

It’s another founder-owned-and-run company with a wide moat. Yes, its chief executive officer, Mark Zuckerberg, can be a polarizing figure, but it’s difficult to argue with the impact his business, which includes Facebook and Instagram, has on the world. These platforms have 3.5 billion active daily users. We don’t see the money being poured into other innovations, such as the metaverse, as a major issue as long as the rest of its business continues to grow. We plan to own the stock for a long time unless its user numbers really start to crater.

Alimentation Couche-Tard Inc. ATD-T is a stock we bought in 2014 at about $18 a share and added to in early 2021 at $38 and earlier this year at $68. It makes up about 5 per cent of our equity portfolio.

It’s a strong operator and has done a fabulous job acquiring other convenience stores and chains, and delivering strong returns and profits. We have some concerns about the prolonged takeover offer for Japan’s Seven & i Holdings Co. Ltd. SVNDY over the past year, which has weighed on the stock.

We hope the company isn’t successful so it can just go back to its bread and butter of smaller acquisitions. If the acquisition doesn’t work out, we believe the company will still be fine.

Name a stock you recently sold.

We recently trimmed our holdings in Heico Corp. HEI-A-N, a maker of parts and technology for the aerospace, industrial, defence and electronics sectors. We bought the stock in May, 2020, at US$95 a share and trimmed about 5 per cent of our position at US$220 this past May after a gain of 112 per cent.

Buying is easy, selling is difficult. Most readers will have an experience of selling a stock, only to see it go up. We will, however, trim positions if they become too large or the valuation becomes very stretched. It’s the latter reason we trimmed Heico, which trades at an eye-watering price-to-earnings ratio north of 50. That said, Heico still makes up about 3 per cent of our equity portfolio today.

This interview has been edited and condensed.