Jason Del Vicario, portfolio manager with Hillside Wealth Management at iA Private Wealth Inc. in Vancouver. Illustration by Joel Kimmel.Illustration by Joel kimmel
In a stock market some investors complain is overvalued, money manager Jason Del Vicario is finding bargains at a rate he hasn’t seen since the 2022 downturn.
“It’s fertile hunting grounds for quality-focused investors right now,” says Mr. Del Vicario, portfolio manager with Vancouver-based Hillside Wealth Management at iA Private Wealth Inc., who oversees about $280-million in assets.
It’s not just an AI-driven software sale either. Mr. Del Vicario says he’s been buying or adding to stocks in sectors ranging from financials to industrials.
The increased buying is part of his investment strategy of owning what he considers to be high-quality companies at “favourable prices” and holding them for years, “if not decades.”
Mr. Del Vicario’s definition of high-quality includes, in part, companies with management teams that have a meaningful stake in the business and a history of consistently generating above-average returns on invested capital.
But in a market hyperfocused on AI stocks, he acknowledges his longer-term strategy has made for a tough comparison to soaring indexes such as the S&P 500 and Nasdaq over the past year.
His firm’s all-equity fund has returned 6.8 per cent so far this year, while it has a negative one-year return of 1.5 per cent. The three- and five-year annualized returns are 11.1 per cent and 8.7 per cent, respectively. Since the fund’s inception on Sept. 2, 2014, its annualized return is 9.5 per cent. The performance is as of July 15 and based on total returns, net of fees.
His top five holdings today include Meta Platforms Inc. META-Q, Games Workshop Group PLC (on the London Stock Exchange), Constellation Software Inc. CSU-T, Credit Acceptance Corp. CACC-Q and Alimentation Couche-Tard Inc. ATD-T.
The Globe spoke with Mr. Del Vicario about three stocks he bought recently and a sell:
Name three stocks you’ve been buying recently and why.
Copart Inc. CPRT-Q, a leading global auto salvage company based in Dallas, is a stock we started buying in March and added to in June this year. Our average price is US$32 a share.
Copart is an intermediary between sellers, which include insurance companies, banks, car dealerships and vehicle rental companies and buyers, such as used vehicle dealers and the general public. It has about 200 physical salvage yards and locations across North America, the U.K, Europe, Brazil and the Middle East.
Although the number of collisions is falling, the price at which a car is deemed totalled is rising because car technology is expensive to replace. It means more cars with minimal physical damage are being deemed totalled, which benefits Copart’s margins.
The stock was overvalued in recent years but has dropped in part because of increased competition from the other large player in the industry, IAA [Insurance Auto Auctions], after it was bought by Richie Bros. in 2023.
We think there’s room for both companies to do well in this market and Copart has a competitive advantage because it owns most of its salvage yard real estate, while IAA leases a lot of its land.
Also, Copart has no debt and began actively buying back shares earlier this year for the first time in about a decade.
Kinsale Capital Group Inc. KNSL-N, a Richmond, Va.-based property and casualty insurance company, is a stock we started buying in early June. Our average cost is US$309 a share.
Kinsale is in the excess and surplus lines of insurance in the U.S., a part of the market that’s harder to insure. That includes homes in fire- or hurricane-prone areas and businesses such as construction, commercial transportation and cannabis retailers. It means Kinsale can usually charge higher premiums, especially as standard insurance pulls back from these riskier parts of the market.
One thing we like about the company is that it handles its own claims work using a proprietary technology platform rather than outsourcing it, which makes it more efficient. Also, its founder and chief executive, Michael Kehoe, has a relatively large stake in the business of about 4 per cent. The company also has lower expenses and no debt and has been gaining market share.
Paycom Software Inc. PAYC-N, an Oklahoma City-based human capital management software provider, is a stock we started buying in 2024 for US$138 a share.
The stock then went on a big run-up before pulling back again, alongside other software companies, amid concerns that AI will kill their businesses. We bought more Paycom throughout the spring of this year for between US$114 and US$121 a share.
We think AI is a tailwind, a productivity tool that will help software companies improve their products and existing client relationships. The company did a big buyback earlier this year, which we like. It’s also expanding internationally and gaining market share. We also like that its CEO and founder, Chad Richison, owns around 12.6 per cent of the shares.
Name a stock you’ve sold or trimmed recently.
Kakaku.com Inc., KKKUF, Japan’s leading price comparison and consumer review website, is a stock we sold in mid-June after owning it on the Tokyo Stock Exchange since 2023. We didn’t want to sell it, but it’s being taken over by private equity. We sold it for around 3,300 yen, which is a price/earnings ratio of about 34, quite high for this type of business.
Kakaku.com is a good business. It’s well-moated, but given that its price comparison website has really stagnated over the past few years, it’s a price we were happy to take. It was also a big position for us, at about 7 per cent of the portfolio. Our average cost was 2,125 yen. Although there’s a bidding war for the company, we didn’t want to risk the shares being delisted while we were holding them.
This interview has been edited and condensed.