Paul Harris, partner and portfolio manager at Toronto-based Harris Douglas Asset Management Inc. Illustration by Jacqueline OakleyThe Globe and Mail
Money manager Paul Harris describes himself as an active manager, but not in the way many investors view the term today.
Instead of trading securities regularly, the partner and portfolio manager at Toronto-based Harris Douglas Asset Management Inc. likes to buy quality stocks and hold them for years through market ups and downs.
“The hard part of our business is trying to do nothing; to separate yourself from the noise that’s out there – to not get caught up in it and do something foolish in your portfolio,” says Mr. Harris, who oversees about $185-million in assets. “When I sell or add a company, it’s more about risk management.”
Mr. Harris also holds about 10 per cent cash at all times.
“I think of cash as a strategic asset class,” he says. “It allows me to have a lot of flexibility, especially in bad times in the stock market when I don’t necessarily want to sell something [to be able to buy another stock].”
The strategy has helped him provide steady returns for his clients in recent years: The Harris Douglas Equity Portfolio, which holds 29 stocks, returned 12.3 per cent over the past year. Its three-year and five-year annualized returns were 11.7 per cent and 8.2 per cent, respectively. The performance is based on total returns, net of fees, as of Aug. 31.
The Globe spoke with Mr. Harris recently about what he’s been buying and selling:
Name three stocks you bought recently.
UnitedHealth Group Inc. UNH-N, the Eden Prairie, Minn.-based multinational health care products and services company, is a stock we bought in August. We think it’s undervalued at current levels.
The company has gone through several issues in recent years, including its chief executive officer being shot and killed in a targeted attack in late 2024. Its new management has improved operational discipline after underestimating some insurance costs. The company is also a massive data processor, in everything from customer service to fraud protection, and will benefit from AI.
UnitedHealth should also benefit from the aging baby boomer population and its growing need for health care products and services.
Palantir Technologies Inc. PLTR-Q, the Denver-based, intelligence-focused software company, is another stock we bought at the beginning of August.
Its proprietary Gotham commercial software platform helps military, intelligence and law enforcement agencies pull together data quickly and act upon it.
One of Palantir’s biggest customers is the U.S. government, but we see an even bigger opportunity as it moves more into the corporate world. Some customers include Airbus, Wendy’s and Cleveland Clinic. We see strong margin and free-cash-flow growth as it expands into the private sector.
Meta Platforms Inc. META-Q, the technology company behind Facebook and Instagram, is a stock we bought in August, 2025 and added to in February.
We saw a huge disconnect in the stock: Meta’s earnings per share grew 22 per cent in fiscal 2025 and are expected to grow 10.6 per cent in 2026. Also, revenue is expected to grow by 26.5 per cent for fiscal 2026. Yet, the stock is down about 12 per cent over the past year. Meta trades at 17 times 2027 earnings, while the S&P 500 is trading at 22 times, so it’s at a substantial discount.
The risk is the lawsuits that may continue to overhang the stock, but I think the company will settle out of court or appeal, which will push out any settlement for years. The bigger risk is the AI buildout: Meta doesn’t have a cloud business, and its costs are higher than other hyperscalers. I think the stock is cheap because of all these issues.
Name a stock you recently sold.
Zoetis Inc. ZTS-N, the Parsippany, N.J.-based animal-focused vaccine and medicine company, is a stock we sold a couple of months ago after owning it for about five years.
The stock did well for a few years, especially during the pandemic, when more people were getting pets. However, I sold it because I’ve been unimpressed with management, which changed a couple of years ago. I don’t think it has responded effectively to some competing, generic drugs launched recently.
The company has also talked about a lot of new drugs coming out, but it hasn’t dropped them as quickly as expected. I think these things will affect margins over the next little while.
I also decided to sell because I got worried that management isn’t doing a good job of expressing its views about the business and how they’re solving problems when things go wrong.
This interview has been edited and condensed.