Jason Del Vicario, Portfolio Manager, Hillside Wealth Management, iA Private Wealth
Focus: North American and global stocks
Top Picks: Meta Platforms, Christian Dior, Oddity Tech
MARKET OUTLOOK:
Our thoughts never waver regardless of the macro backdrop; if anything, we favour challenging economic periods as these are the times when high-quality businesses are available at favourable prices.
In our opinion, the primary two factors that determine the quality of a company are: operators have strong shareholdings in the company and the company has a demonstrated history of consistently generating strong returns on invested capital. We run a concentrated portfolio of 28 global businesses that meet our strict quality criteria.
Our top 10 positions represent 70 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 also wish to note that we will only ever feature companies that we own.
In addition, our top picks will always be those that we own that we feel offer the most compelling value at the time.
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TOP PICKS:
Meta Platforms (META NASDAQ)
We have owned Meta since our inception in 2014 and most recently added to the position in 2022.
We have since trimmed it a few times as the stock rebounded sharply and the weighting became larger than our internal position weight rules allow.
Meta remains our largest position at a little over 10 per cent equity. It is founder run/owned and has a history of achieving strong and consistent returns and the current valuation is attractive in our opinion.
With any company there are risks such as legal/regulatory and questions about the return on the massive ramp up in artificial intelligence (AI) related capital expenditure (CAPEX).
However, with nearly half the world’s population on one of their platforms daily, we feel the network effect ‘moat’ is as strong as ever.
Christian Dior (CDI EPA)
Christian Dior is Bernard Arnault’s family holding company. The company owns some real estate but the bulk of the assets are shares in MC (Paris) which is the 75-brand conglomerate that owns market leading brands such as Louis Vuitton, Dom Perignon, Tiffany’s, Dior, Sephora and others.
Recently, their growth has been stalled due to consumer retrenchment especially in China which is a large market for them. CDI trades at a approximately 20 per cent discount to the value of the MC shares and is valued at 16 times earnings which we believe is excellent value for these well moated brands.
We recently added to our position (Aug 2026) at 415 Euros. They represent a three per cent weight.
Oddity Tech (ODD NASDAQ)
Oddity Tech is more on the speculative end of the investment quality spectrum. While its founder run/owned, has no debt and up until recently was growing rapidly and taking share in a competitive market, they are still relatively new, newly listed and recently went from profit making to loss making in short order.
Oddity is trying to disrupt the beauty/cosmetics market by employing a DTC model. The challenge is that beauty consumers like to try product before buying… which of course you can’t do online. To get around this they used a ‘try before you buy’ model which is well received by consumers but left them open to impact if/when a social media advertising partner changes their algorithms.
Their largest partner (Meta) changed and punished companies with products that are frequently returned; which of course is the point of the ‘try before you buy’ model. In short, this algorithm change severely affected the lifetime value (LTV) to cost of acquisition (CAC) math of their business and they are trying to make necessary changes to bring things back in line.
The company notes this isn’t the first time they’ve encountered such as issue (Apple’s 2020 iOS 14) and is confident they can get back on track. Given the somewhat binary outcome here we have sized the position very modestly at one per cent with an average cost of approximately US$12.50.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| META NASD | Y | Y | Y |
| CDI EPA | Y | Y | Y |
| ODD NASD | Y | Y | Y |
PAST PICKS:
Novo Nordisk (NVO NYSE)
Then: US$51.61
Now: US$47.68
Return: -8%
Total Return: -4%
Constellation Software (CSU TSX)
Then: $3331.32
Now: $3093.60
Return: -7%
Total Return: -7%
Plover Bay Technologies (1523 HK)
Then: HK$5.80
Now: HK$7.35
Return: 27%
Total Return: 33%
Total Return Average: 7%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| NVO NYSE | Y | Y | Y |
| CSU TSX | Y | Y | Y |
| 1523 HK | Y | Y | Y |
