BNN - Monday, May 27, 2024 - 12:00 p.m. (ET) - Segment #1

Do you love it? Oh my gosh, I love this. Announcer: The Good Stuff with Mary Berg. Join the fun. Announcer: Weekdays at 10:00, 9:00 Mountain on ctv. [ ] >> Andrew: hi, there. Welcome to "market call." let's get this party started. We are kicking off this week with jason del vicario portfolio manager at hillside wealth management at ia private well. Jason is taking your questions on north american and global growth stocks. You can call us toll free 1-855-326-6266. Or send an email to marketcall@bnnbloomberg.ca. Jason, it's great to see you. It sounds like you are kind of in the warren buffett school here. You don't spend too much time worrying about the economy. >> No, we don't. And there is simple reason for that in that we think and behave long-term. So when your time horizon is five or ten years which we think is a competitive edge and will point to the average holding period for securities fallen from five years in the 1970s to ten months to today. You've separated yourself from many investors out there if you can think long-term. If your time horizon is five, ten, 20 years in those times periods you are going to have levels of -- you will have periods of high inflation, low inflation, high interest rates, low interest rates. Geopolitical situations tense, and relaxed geopolitical situations. When you think that you can't control any of these factors, interest rates, and geopolitics we believe that the long-term focused investor should focus on things within their control and that's security analysis. >> Andrew: so good companies will stay good regardless of what happens to interest rates, for example? >> Yeah. So that's a -- yeah. So, yes. Companies tend to stay good and get better and weak companies tend to stay weak and get weaker. During periods of economic weakness we typically find that the unlevered, founder run founder-owned business rather than being on their back foot and being reactive and having reactionary behaviours in terms of what's going on on the macroeconomic front they can really be on their front foot so they can be gaining market share, maybe they can be doing acquisitions that are more favourable valuations because competition has gone away. So yeah, good point there. >> Andrew: jason, we are looking forward to having you especially because you will be talking about some asian stocks and at least one swedish name that we -- I've never heard of. So that's always great learning new stuff.

>>> Jason del vicario is on "market call" today portfolio manager at hillside wealth management at ia private wealth. North american and global growth stocks are on the menu. 1-855-326-6266. Gold is soaring and copper demand is at all time highs. American Pacific Mining is seizing the moment by partnering with world class miners to unlock America's next big copper gold strike, fully funded with a $14 million exploration blitz this summer and nominated for multiple industry awards, including six by s&p global. American Pacific Mining fueling America's mission for homegrown metals. Mulvihills Canadian Bank Enhanced Yield etf gives investors premium exposure to Canada's big six banks with monthly distributions and a 9.3% yield. Cbnk is the highest yielding Canadian Bank etf. Mulvihill. Take advantage of historically high yields while reducing risk. Td Asset Management offers a large suite of active and passive fixed income investment solutions that can provide income and stability to your portfolio. Td Asset Management. >> Andrew: we have an email from ash. Ash is curious about alphabet. What do you think of alphabet as a long-term hold if there is a recession will the stock suffer? >> So um, you know, we like -- we have looked at alphabet. We don't own them. The two large cap tech stocks that we own are microsoft and meta which we think are just better businesses than google but I mean google is very similar to meta [indiscernible] advertising. >> Andrew: right. Would you -- so is it a stock you would buy? Sorry, go ahead. >> [indiscernible] I am not sure if we are losing -- >> We saw in 2022. Sorry? >> Andrew: carry on, jason, sorry. We missed your last remark. Go on, please. >> Oh, okay. No problem. Yeah, I was just saying that we own microsoft and meta. We do like these businesses that are obviously well moated. Meta -- google distill has the founders sill involved with the business so we like the business. We prefer meta. We prefer microsoft. But you know if you are a long-term holder of google they certainly continue to compound shareholder wealth at elevated rates and we think it would continue to do so in the future. >> Andrew: elliott is in hamilton, ontario. Go ahead, please. >> Caller: hello? >> Andrew: hello, elliott. >> Caller: oh, sorry. Please, your comments and assessment of thompson reuters, tri, please. Thank you. >> Andrew: thank you. >> So on one screen next to me I've got my trusty [indiscernible] focus which is my software that I use to be able to analyse stocks and thompson reuters checks a number of boxes that we look for in that it is founder-run founder-owned. They have nice returns on invested capital, however you you know the growth really hasn't been there for them. They have been in the mid single digits growth rate and at 33 times earnings that's very expensive. So this is a classic example of an excellent business but that the valuation is a bit challenging. >> Andrew: okay. Just a little too expensive for you. Okay.

>>> Costa is in montreal, go ahead, costa, please. >> Caller: hello, gentlemen. Thank you for taking my call. >> Andrew: pleasure. >> Caller: Mr. Jason, I know you love constellation software. Are you still holding 20% in your portfolio? Would you be buying more at this level and a price target? Thank you, my friends v a beautiful day. >> Andrew: thank you. >> Price target. Well, in five years I estimate the value of constellation software will be double where it is today and in 10 years it's probably going to be four times where it is today. That's just the math on a company that can compound wealth at 15%. At 15% your investment doubles every five years. I am joking a little bit because I don't make make any of these types of projections. What we want to look at is the fundamentals of the business and the fundamentals of the benefits constellation software haven't changed. In fact we could argue that they have gotten even stronger. They have been able to deploy increasingly larger amounts of capital and they are disciplined in terms of that deployment meaning that they need to see at least a 20 and sometimes for smaller acquisitions north of a 0% rate of return to be able to pull the trigger. >>> It has never been a 20% weight in our portfolio but it is our largest holding and it is a 15% weight our second largest would be meta. Third we will be talking about later in the show. So founder-run, founder-owned. Not very much debate. High margin. My consistent returns on invested capital. Wonderful incentive programs where their managers have to take 75% of their after-tax bone us and buy shares in the open market. They have never issued a single share. Just a tremendously run company and as the caller noted certainly still our largest holding. We have held it since 2014. And we are very happy shareholders. >> Andrew: okay. Costa, thanks for your question. >>> André in chilliwack, bc. Fire ahead, please, an tre. >> Caller: fire ahead, andrew. Good morning. Jason, I could get your thoughts, please, on the goeasy. What do you think of the company? Small cap but growing quite well and it's got a good moat around it. I would like to know if you would buy it at this current l it was at 190. What do you think of the company and thanks have have a good week. Bye-bye. >> Andrew: thank you. >> So goeasy is a very similar to a company that I will be talking about in our top pick and I don't want to let the cat out of the bag because I know we are all keen for that but they are a subprime lender based here in canada. They are a founder-run founder-owned. Of course they do have some debt because of course debt is part of the business model but they have done a tremendous job of increasing shareholder wealth. So it's a company that we have looked at. There is another company in the states which I've said we will be talking about later which we have chosen to own over goeasy. Our only hiccup with these types of business that is they are not particularly savoury business. They are not really win-win businesses. I know they like to say well, they are helping people improve their credit rating but it's really tough to improve your credit rating when you are paying 30 to 40% there. So we can get into the sort of social challenges with these types of businesses and discussions but frankly at the end of the day if you do have a. [ audio interruption ] for whatever reason the likes -- >> Andrew: might have seen jason freezing up there. >> If you do treat. [ audio interruption ] if you do treat being a customer seriously you are then able to improve your credit rating. Sorry for the poor connection here but I hope we are okay. >> Andrew: okay. Thanks. Thank you very much indeed. So goeasy not calling out to you right now, jason. >> It's a very good business. Like I said there is one that we own in the states that we like better but it is a good business and I believe they can continue to compound shareholder wealth at elevated rates. >> Andrew: okay. An dress, thanks for the question.

>>> We will be back with jason del vicario portfolio manager hillside wealth management ia private wealth taking your questions on north american and global growth stocks. [ ] this summer on ctv champions will rise dreams will come true for these canadians it's a once in a lifetime event it's The Amazing Race Canada What else? Coming this summer to ctv In an ever changing market, invest in the essentials because there was always a need for multi residential, warehousing and logistics, essential retail, and renewable infrastructure assets. Build your client's portfolio with an investment strategy grounded in the needs of Canadians. Access tax efficient, institutional quality hard assets backed by a track record of steady performance and consistent distributions. Contact a Skyline Advisor today. The world of investments is growing, offering more alternatives than ever. ( ) Choose an alternative that invests, in what's here to stay. ( ) Things you can see and touch. ( ) Things that are part of our everyday lives. ( ) Avenue Living brings a different approach. ( ) One that's steeped in history, experience, and trust. ( ) Choose a proven alternative. Talk to your advisor about Avenue Living today. ( ) Closed captioning of this bnn Bloomberg program is brought to you by Goodreid Investment Counsel. Invest with confidence. >> Andrew: jason del vicario is our guest today on "market call" taking your questions on north american and global growth stocks. Jason, before we move on what about the big canadian banks? What about, say, scotiabank which has been out of favour? I am just curious what your take is because they report tomorrow and their stock is still lagging the bank group. >> Yeah, I mean so we don't own any of the banks. The primary reason is that they are not founder-run founder-owned so they are professionally managed. That doesn't necessarily mean that they can't be managed well but for us that's a hard no. We will also point to their returns on invested capital which have been in and around the low to mid -- or double digits so 10 to 15% which is not bad but it's difficult for a company to grow at greater than their return on invested capital. So it is simply just not an area that we are involved with so I am sorry but I can't necessarily comment on you know the individual banks or the banking group in general because they simply don't meet the criteria as I just outlined. >> Andrew: mm-hmm.

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