Why this money manager owns Couche-Tard and a ‘super app’ stock based in Kazakhstan

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Many investors are cheering the recent market run-up, but for money manager Jason Del Vicario, it has resulted in fewer opportunities to find stocks he considers worth buying.
“Of course, we’re happy our client portfolios are up, but I can count on one hand the type of companies that we like available at attractive prices,” says the portfolio manager with Hillside Wealth Management at iA Private Wealth Inc. in Vancouver, who oversees about $240-million in assets.
Mr. Del Vicario and his team aim to buy high-quality, founder-owned-and-run companies with consistent returns on capital that they find at cheaper valuations and hold long-term.
His team runs a concentrated portfolio, which includes 27 stocks right now, across three different models for clients: growth, which is all equity; balanced growth, which is at least 25 per cent fixed income (including bonds and cash); and conservative growth, which is at least 50 per cent fixed income.
The firm’s balanced growth fund, in which three-quarters of its clients are invested, is up 11 per cent this year. Its three-year annualized return is 8 per cent and its five-year annualized return is 9 per cent. The performance data are as of June 28 and are based on total returns, net of fees.
Here are three of the Hillside team’s top picks – one from Canada, one listed in the U.S. and one international – as well as a recent sell:
What are your top three picks?
Alimentation Couche-Tard Inc. ATD-T is a stock we’ve owned since our firm started investing in September, 2014. We bought it at around $18.50 a share. It’s a strong operator and has done a fabulous job acquiring other convenience stores and chains and delivering strong returns and profits.
We added to the stock again in January, 2021 when the price dropped to $37 a share after the company announced it was exploring acquiring France-based retailer Carrefour Group SA CRERF. [The talks ended after a sharp rejection from the French government]. Couche-Tard’s stock is currently trading at around $80 a share. [All prices adjusted for stock splits.]
A U.S.-listed stock we like, based in Khazakstan, is Kaspi.Kz KSPI-Q. We first bought it in October, 2021 at US$101 a share when it was listed on the London Stock Exchange. The stock dropped in early 2022 due to civil unrest [in Khazakstan] and we added more at US$56 in March and US$45 in May of that year. The stock has had a strong run since, moving from the London Stock Exchange to the Nasdaq in January. We trimmed our position in April, 2024 at US$126 a share. However, that’s no indication of how we feel about it. It just became a larger share of our holdings than initially intended.
The company runs what it calls a ‘super app,’ which is like having the equivalent of companies such as Amazon.com Inc., PayPal Holdings Inc., DoorDash Inc., Save-On-Foods, Expedia Group Inc. and the Canada Revenue Agency all in one app. About 12 million of Kazakhstan’s 18 million people are registered on the app and use it an average of two times daily. It uses artificial intelligence chatbots to reach out to users and find out what they want, which in turn helps them add new features and services. We’re not experts in Kazakhstan, so we’re mindful of how much exposure we have to this company in our portfolios.
The third stock is Swedish company Evolution Gaming Group AB, which trades on Nasdaq Stockholm. (We prefer to own these companies on their direct exchanges. We think having multiple currency exposure is a strength, not a weakness).
The company dominates the global live online casino market. It’s a profitable company with no debt, high margins and a strong return on capital. We also think it’s priced attractively, trading at 19 times earnings, for a company that has historically grown in the 20-per-cent plus range. It also pays a healthy dividend and has a history of share buybacks.
There are risks given that 60 per cent of its operations are in unregulated markets, but there’s a trend toward regulating gambling that should benefit the company long term. We’ve owned the stock since October, 2020 at 660 kronor and have added to it twice since at 990 kronor in March, 2022 and 1,100 kronor in September, 2023. It’s currently trading at about 1,150 kronor.
Name one stock you sold and why.
We sold Japan-based Premier Anti-Aging Ltd. in August last year for 1,400 yen after buying it in April, 2022 for 4,300 yen. Normally, when a stock we own drops by more than 50 per cent we get very excited, re-check our investing thesis and – 90 per cent of the time – add to our position. However, we didn’t feel comfortable doing this with Premier Anti-Aging.
We originally bought the shares due to the company’s flagship product, Duo, a makeup cleansing balm with a dominant market share in Japan. We also liked the subscription model. Unfortunately, we misjudged the moat [ability to maintain a competitive advantage], and the product lost market share. It was a small, 1-per-cent position (which shrunk to 0.25 per cent) but shows that we course-correct by selling when we get things wrong. The shares are now trading at around 900 yen, so we’re not crying ourselves to sleep over this one.
This interview has been edited and condensed.
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