Money manager's strategy: buying Blue Ant Media, selling Constellation Software

In the complex world of investment, understanding the strategies employed by seasoned money managers can provide valuable insights into market movements and stock selection. One such expert is Jesse Gamble, who manages an impressive portfolio that emphasizes identifying high-potential companies. His approach is rooted in the quest for "compounders," firms that can effectively reinvest capital to generate substantial returns over time. Below, we explore his investment philosophy, recent stock selections, and the rationale behind his decisions.

Investment Philosophy: Seeking Compounders

Jesse Gamble, a senior vice-president and portfolio manager at Donville Kent Asset Management Inc., employs a distinctive strategy that diverges from traditional sector-based investments. Rather than focusing on specific industries like artificial intelligence or categorizing stocks by size, Gamble seeks companies he labels as "compounders."

These compounders are characterized by their ability to reinvest earnings at high rates, fostering growth over extended periods. Gamble explains, “We’re just trying to find the best companies we can based on factors such as return on invested capital, earnings growth, and valuation,” which underlines his analytical approach to investment.

Currently, the portfolio, which encompasses approximately $75 million in assets, shows a preference for small- and mid-cap stocks. According to Gamble, these segments present more appealing valuations compared to many large-cap companies. He states, “We’d rather own something with much higher earnings growth at half or a third of the valuation.”

Portfolio Overview: Key Holdings

As of now, Gamble's portfolio contains 21 companies across North America, demonstrating a diversified investment strategy. Noteworthy holdings include:

• Zedcor Inc.
• VitalHub Corp.
• Propel Holding Inc.
• Enterprise Group Inc.
• Cipher Pharmaceuticals Inc.
• BluMetric Environmental Inc.

While the portfolio experienced a downturn of 16.8% in 2025, following a staggering 103% return in 2024, Gamble remains optimistic. He notes that the recent decline, juxtaposed with the S&P/TSX Composite Index's nearly 30% gain, was primarily due to a drop in Canadian growth stocks. Gamble believes that these companies have been unfairly sold off, presenting a significant opportunity for recovery in 2026.

Over the past three years, the portfolio achieved an annualized return of 26.2%, with an average annualized return of 11.4% since its inception in October 2008.

Recent Additions to the Portfolio

In a recent interview, Gamble discussed three stocks that he has been actively adding to, highlighting his rationale:

Zedcor Inc.

This Calgary-based mobile surveillance and live monitoring security company caught Gamble's attention when he first invested at 63 cents per share in January 2023. After a 30% drop due to competition from Amazon's Ring product, Gamble seized the opportunity to buy more shares. He emphasizes that Zedcor's advanced technology and comprehensive service model set it apart in the security space.

Blue Ant Media Corp.

Another stock Gamble is enthusiastic about is Blue Ant Media, a Toronto-based company involved in streaming, production, and advertising. He initially purchased shares at $6.68 when the company went public in August 2025 and has continued to invest. Gamble points to Blue Ant's growth through strategic acquisitions, including MagellanTV and Thunderbird Entertainment Group, as key drivers for its future potential. He believes the stock is undervalued and underfollowed, creating an attractive entry point for investors.

VitalHub Corp.

Gamble's interest in VitalHub, a health care software provider, began in May 2019 at $1.60 per share. He has been increasing his stake during recent market fluctuations. Despite a general decline in software-as-a-service stocks, Gamble sees significant growth potential in the healthcare sector, viewing VitalHub as a solid investment due to its strong returns on capital and capability for mergers and acquisitions.

Rationale Behind Selling Constellation Software

On the other side of the investment equation, Gamble recently sold shares of Constellation Software Inc., a move he made on September 25, the same day the company announced the resignation of its founder and CEO, Mark Leonard. Gamble noted that their first investment in Constellation occurred on October 21, 2008, when shares traded at $22.99, making it one of Canada’s top-performing stocks.

Gamble highlighted concerns associated with leadership changes, stating, “We’ve seen the change-in-leadership story before, where a founder or CEO retires, and usually the company becomes more conservative.” He believes that Leonard's presence had a "halo effect" that attracted talent and businesses to Constellation. While he acknowledges that shareholders may still profit, he suggests that the days of consistent 20% returns may be behind them, prompting him to seek more lucrative opportunities elsewhere.

The Market Landscape: Opportunities Ahead

As 2026 approaches, Gamble remains optimistic about the market's potential, particularly for the companies in his portfolio that have recently faced significant sell-offs despite strong fundamentals. He emphasizes that the current landscape offers numerous opportunities for savvy investors willing to look beyond short-term market fluctuations.

Investors should keep an eye on factors such as:

• The overall health of the economy and its impact on growth stocks.
• Technological advancements, particularly in sectors like healthcare and security.
• Market reactions to leadership changes within established companies.
• Valuation discrepancies between small/mid-caps and large-cap stocks.
• Emerging trends in streaming and content distribution.

Final Insights from Jesse Gamble

Gamble's insights into stock selection and market dynamics reflect a deep understanding of the intricacies of investment management. His focus on identifying compounders and navigating the challenges of market volatility provides a valuable perspective for both seasoned and novice investors alike. As he continues to refine his strategy, the lessons learned from his recent buys and sells will undoubtedly shape his future decisions.