Jason Del Vicario, Portfolio Manager, Hillside Wealth Management, iA Private Wealth
Focus: North American & Global stocks
Top picks: Novo Nordisk, Constellation Software, Plover Bay Technologies
MARKET OUTLOOK:
Our thoughts never waver regardless of the macro backdrop. If anything, we favour challenging economic periods as such periods present high quality assets at prices we find favourable.
Our key defining factor of a ‘high quality’ business is one that consistently generates strong returns on invested capital. We run a concentrated portfolio of 25 global businesses that meet our strict quality criteria. Our top 10 positions represent 75 per cent of our equity weighting. We view multiple currency exposure as a strength (no hedging).
We think and behave with a long-term mindset. When one’s investment time frame is decades and not months or weeks, short term factors beyond our control such as interest rates, inflation and geopolitics become irrelevant, as we assume we’ll encounter all sorts of macro regimes over time. We own a collection of businesses that we feel can compound shareholder wealth strongly over decades. We have added four businesses in 2025 and have generally been inactive in terms of buying and selling but very active in terms of research.
It is worth noting that as of late summer, quality investing has been out of favour and our performance for 2025 has been flat after very strong 2024 and 2023 results. Interestingly, high quality stock underperformance is at 1999 extremes.
We have no opinion when this trend will reverse and have taken the opportunity to review our holdings and strategy. We have concluded that focusing on founder run and owned businesses with strong returns on invested capital is the most prudent way for us to deliver long term returns for our clients. In short, we are not changing our strategy.
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TOP PICKS:
Novo Nordisk (NVO NYSE)
Novo Nordisk is our newest holding and currently represents approximately three per cent of our equity. This Danish based pharmaceutical company is the world’s leader in diabetes and weight loss care. The company is over 100 years old and is most well-known, recently, for their blockbuster Ozempic and Wegovy weight loss management drugs.
Just today, it was announced that the FDA has approved the first pill version of these drugs. While not exactly founder run and owned, we note that the world’s largest foundation, the Novo Nordisk foundation, is the company’s largest shareholder and has flexed their muscles indicating to us that they are solid long-term partners. Most recently shares have cratered, and the foundation has stepped in by hiring a new CEO and firing/replacing a number of board members.
The company is encountering fierce competition from Eli Lily and the two of them essentially have a duopoly in the weight loss drug space. We feel Novo Nordisk sell off is way overdone and are confident that the two companies can co-exist and capture the huge amount of white space in front of them. For example, there are over 1 billion obese people worldwide while only a fraction are currently being treated. Novo’s shares are likely to be volatile but at a price-to-earnings ratio of 13 we believe the forward rate of return is attractive at these levels.
Constellation Software (CSU TSX)
We have held Constellation Software since our inception in 2014. During this time, it has generally been our top holding and currently occupies the number three spot with a little over 10 per cent weight.
Constellation Software is an excellent example on following one of the number 1 rules proposed by Charlie Munger: “the #1 rule of compounding is do not interrupt it unnecessarily.”
Constellation’s shares have hit a rare rough patch on the backs of the surprise resignation of its founder Mark Leonard (due to health reasons) and the concern that AI will replace the work of software developers.
Constellation famously decentralized model should help dampen the impacts of Mr. Leonard’s resignation and while the jury is still out whether AI will negatively or positively affect software companies, we’ll note that CSU owns over 2000 VMS businesses and so they are very diversified. Furthermore, these companies represent mission critical functions for their customers; many of whom are in government; not an area known for innovation!
We think the market has overacted to these concerns and are finally able to recommend buying shares; while they aren’t cheap, the valuation re-rating suggests a reasonable forward rate of return from these levels.
Plover Bay Technologies (1523 HK)
Plover Bay Technologies is a company we’ve owned since 2021 and has more than tripled during this time. Plover Bay is the rare company that can grow their earnings without requiring much re-invested capital to do so; in other words, they are an asset light compounder. The company is a world leader in delivering unbreakable connectivity.
Think networks on cruise ships, mining operations, events and even silicone valley shuttle buses. With the world’s insatiable appetite for data and constant connectivity, Plover Bay delivers hardware and software solutions that make this happen.
The company is founder run and owned has no debt and pays out most of their growing cash flows in the form of dividends. Plover Bay is another top 10 position for us representing just over a five per cent weighting.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| NVO NYSE | Y | Y | Y |
| CSU TSX | Y | Y | Y |
| 1523 HK | Y | Y | Y |
PAST PICKS: JUNE 6, 2025
Kaspi.kz (KSPI NASD)
Then: US$85.93
Now: US$78.69
Return: -8%
Total Return: -8%
Calnex Solutions PLC (CLX LON)
Then: £53.50
Now: £46.00
Return: -14%
Total Return: -12%
Curves Holdings (7085 TOKYO)
Then: ¥691.00
Now: ¥795.00
Return: 15%
Total Return: 16%
Total Return Average: -1%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| KSPI NASD | Y | Y | Y |
| CLX LON | Y | Y | Y |
| 7085 TOKYO | Y | Y | Y |
