Jason Donville’s Top Growth Stock Picks for June 2024

Editorial Team (ET)April 25, 2025

Welcome to the insightful world of Canadian growth stocks, led by none other than Jason Donville, the president and CEO of Donville Kent Asset Management. As of June 5, 2024, Donville shares his top picks and market outlook, offering invaluable perspectives for investors navigating the current financial landscape.

Market Outlook

The market is buzzing with excitement as the small and mid cap rebound, which started in November 2023, continues strong into June 2024. This momentum signals the onset of the next bull cycle for small and mid cap growth stocks, expected to last the typical five-to-seven-year timeframe. It’s like watching a well-trained athlete hit their stride after months of preparation.

From the real-time data we monitor, inflation appears to be under control. The Federal Reserve, often slow to react due to outdated metrics, is expected to recognize this shift in the coming months. As both Canada and England seem poised to cut rates, following the lead of countries like Switzerland and Mexico, the Fed’s focus is likely to shift from battling inflation to protecting employment. Imagine the Fed as a tightrope walker, balancing the dual mandate of inflation control and employment protection.

The direction of interest rates—whether they are moving higher, sideways, or lower—holds more significance than the specific details. Small cap stocks, having suffered the most during rising interest rates, now show signs of recovery as rates stabilize or decrease. It’s akin to a storm passing, allowing the sun to shine on previously overshadowed investments.

With historically low small cap valuations and a record amount of cash waiting to be invested, the stage is set for the next cycle in growth stocks. Each cycle has its winners and losers, and this time, the focus should be on companies operating in attractive industries while demonstrating reliable profitability.

VerticalScope (FORA TSX)

VerticalScope owns and operates a diverse portfolio of online forums with over 113 million active users. This digital powerhouse thrives on user engagement and the vast amount of data generated by its platforms.

VerticalScope is highly profitable, consistently reinvesting its earnings by acquiring less efficient forums, integrating them into its tech stack, and optimizing their revenue. This strategy is akin to a gardener nurturing different plants, ensuring each one thrives under optimal conditions.

With the rise of AI, VerticalScope’s most valuable asset is its data, comprising over 2 billion user-created posts. This treasure trove of information positions VerticalScope to secure data licensing agreements with leading Language Learning Models (LLMs), similar to Reddit’s approach.

Propel Holdings (PRL TSX)

Propel Holdings operates a consumer fintech lending platform that serves both the U.S. and Canada. Their innovative backend technology is the backbone of their rapid growth and operational efficiency.

Propel’s technology can process over 60,000 unique applications per day, enabling rapid scaling with minimal additional cost. It’s like having a highly efficient assembly line that can adapt to various demands without missing a beat.

For over a decade, Propel has demonstrated its ability to grow profitably, attracting banks to white label their platform or sign licensing deals. Their in-house software development team, comprising 87 experts, including several PhDs, ensures continual innovation and improvement.

Zedcor (ZDC CVE)

Zedcor is not just in the business of leasing mobile security towers; it is a technology-driven security solutions provider. Their advanced systems redefine traditional security measures.

Zedcor’s security towers are equipped with cutting-edge technology for 24/7 Live Verified Monitoring, including radar and AI capabilities. This allows for precise monitoring and response to various scenarios, making it far more efficient than traditional in-person security.

Supported by an in-house monitoring team in Calgary, Zedcor’s operations are highly profitable. Investors should view Zedcor as a technology company providing a valuable monthly service, rather than merely an equipment rental business.

Conclusion

In summary, the market outlook appears promising for small and mid cap growth stocks, with Jason Donville’s top picks—VerticalScope, Propel Holdings, and Zedcor—positioned to capitalize on the current trends. Investors should focus on companies with strong profitability and innovative solutions in attractive industries.

Bloomberg

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