Jason Del Vicario

He deploys capital into businesses when he thinks he can understand what that business will look like in 5, 10, or even 20 years. So short-term noise isn't something he pays attention to, because it's beyond his control. 

Still, when things get cheaper due to downside volatility, he has prices in mind for securities that he already owns or would like to own. Right now, he owns 28 businesses on behalf of clients. He's been nibbling a bit over the last few months. This year, he's only added one business so far. He remains a patient, long-term investor.

He favours exclusively high-quality businesses, though that's a buzzword that gets thrown around. He defines it primarily as a company's ability to generate above-average, consistent returns on invested capital (ROIC). You're looking at the profit in relation to how much capital needs to be invested to generate that profit.

Beyond that, he favours founder-run, founder-owned businesses. Likes to align with people who have significant skin in the game. Asset light, low debt. A company also has to be within his team's circle of competence and comfort zone, so it has to be a business that they can understand. Some things these days are just beyond his understanding or he can't foresee what they'll look like in 5 years.

They're very much bottom-up investors. They screen for their criteria, and they end up with businesses sort of putting up their hands saying "I'm a high-quality business, or a potential one, that you should look at". So he doesn't wake up in the morning and say he should find an energy, healthcare, or technology stock.

Typically, some sectors have a higher concentration of companies that could meet his criteria. Information technology is one area to which he has a fair amount of exposure. The flipside would be sectors where they don't find high-quality businesses; unfortunately, those tend to be the ones (like financials, energy, materials) that dominate the Canadian marketplace. They may require too much capital, or simply don't have the ROIC he's looking for.

Excellent company that meets his criteria. If you made him choose one or the other today, he'd have to say META based on valuation (with the assumption that the investor would hold a position for the long run). MSFT trading ~37-38x PE, whereas META is in the mid-high 20s.

Excellent company that meets his criteria. If you made him choose one or the other today, he'd have to say META based on valuation (with the assumption that the investor would hold a position for the long run). MSFT trading ~37-38x PE, whereas META is in the mid-high 20s.

As a productivity tool, it's here to stay. It will dramatically change a lot of industries and how people work. What isn't  clear is who's going to win the race from an investment standpoint. Go back to commercial air travel in the 1930s and 1940s, it was obvious that it was going to change the world. Same thing with the internet. 

He likes to use the analogy of a running race. He likes to bet on a runner once the race has already started. He's not looking for AI-specific stocks, but META is really involved with AI. You can see in that case how the application of AI is going to lead to more efficiencies, greater productivity, and hopefully higher returns on advertising spend. META already has an established business, and it's using AI as a tool to drive the business forward.

Otherwise, it's too early in the race to make a call on any AI-specific company to be the winner.

Operates in a cola duopoly with KO, good job creating shareholder value. He likes market leaders like these that have little to no direct competition, so this name fits that bill. That being said, it's a lot harder these days with consumer brands to establish a brand and build a moat. Today he could launch a cola company online, using Instagram and FB, with very little cost and effort, and with luck it could even go viral. Brands will have a tough time. 

Very strong, well-established brand. PEP got into snacks, which are up against healthier lifestyles. He owns FEVR, take a look at that one.

Premium mixer brand. Trend is away from alcohol, but the nice thing is that their mixers can be enjoyed on their own with some ice. Ingredients are more naturally sourced. Focused on its beverage lines, rather than diversifying.

Operates in a cola duopoly with PEP. He likes market leaders like these that have little to no direct competition. That being said, it's a lot harder these days with consumer brands to establish a brand and build a moat. Today he could launch a cola company online, using Instagram and FB, with very little cost and effort, and with luck it could even go viral. Brands will have a tough time. 

Very strong, well-established brand. He owns FEVR, take a look at that one.

Founder-run, founder-owned. Very strong and consistent ROIC. Doesn't require a lot of capital growth. Uses a bit of debt, but it's done very effectively because it's able to generate such strong returns. Decentralized model lets them download capital allocation decisions from head office to the business units. Only drawback now is valuation, but quality does cost.

For long-term-focused investors, there really is no better company on the planet. High-quality, exceptional business.

Considered a growth company. Great job growing FCF per share over the last 50 years. Exceptionally well run. Buffett may be stepping back, but culture he's instilled for capital allocation and ethics will transfer to the next generation of leadership with Greg Abel.

Only concern is valuation, bit rich. Becomes increasingly difficult for large companies to allocate capital at high rates of return. Forward rate of return is probably high single-digit or low double. An 8-10% rate of return is strong in his view. High-quality and predictable business. Many have done poorly betting against it.

When you see the PE ratio of 100x, it's really around 50x (based on proprietary metric of FCF available to shareholders, or "owner earnings"), but still expensive. To get mid-high teens rate of return, you want to pay around 20-25x cash earnings. CSU still owns 50%.

He'd prefer CSU, though you won't go wrong with TOI. If your heart's set on TOI, you want to get it cheaper.

Meets a lot of his criteria but one -- it's not actually a capital-light business. Spends a lot on developing new content. A compounder. Well, and frugally, run. Investors would do well to read about the culture and the CEO. Dominates the space, market leader. Quite a bit of direct competition.

If you got in at favourable prices, stick with it. Strong company. One of the biggest mistakes investors make is that they "interrupt compounding unnecessarily" (paraphrased from Charlie Munger).

Stock chart looks ugly. But it's a predictable business, so that means the forward rate of return is going up. Trades at about 10x PE, buying back shares. Continues to gain market share, currently ~60-70% globally. Very much out of favour, and exactly the type of opportunity he looks for. He added more in February. Size your position accordingly; his is 5%.

About half of earnings are from unregulated markets, but those users were accessing regulated markets. UK represents about only 3% of revenues, but its gaming commission investigated that issue. Cyberattack. Employee unrest in Georgia. He feels these are short-term glitches. Yield is 4%.

Owned since his firm's inception. Great example of a compounder. Huge potential acquisition of 7-Eleven, and he'd prefer it not happen. This will cost much more than previous acquisitions, plus the people in Japan really don't want the deal. An acrimonious dance, and that risk is overhanging the stock. He really does not want them to overpay, wants them to stick to their track record of disciplined capital allocation.

ROC over 20 years is consistently in the 20% range. Wonderful, long-term holding. He added again around $69.