I am going to make 4 changes to the model portfolio.
Under normal circumstances, this would be too much turnover. When I built the first model portfolio in late June, I was in too much of a hurry. Two of the the bottom names (Neogen and Unifi) are a little too speculative. So I will replace those with two names I know well, Darling - DAR and HF Sinclair - DINO. Another straight forward change is swapping a REIT, Rayonier - RYN, for my utility Northwest Natural - NWN. I had not looked at the REITs before, and that was a mistake.
I was going to swap Halliburton for Helmerich & Payne, but instead I will sell Smith & Nephew. SNN has jumped from $24 to.$31. When one of your least favorite ideas jumps 30%, it is ok to run, if you have a strong idea to replace it with.
I guess to concept here is that sometimes tactics are more important than strategy. 10% oil service is perhaps overdoing it, but I like the HAL story. I am not finished with my work on 6 healthcare names, so eventually I will buy one of those and sell HP
With the four changes the model is rounding into shape. Below is the model in rank order (best idea to worst idea):
Corteva - CTVA -gaining share in seeds, we will still need corn and soybeans in the recession
Nutrien - NTR - near the bottom of the potash, nitrogen, and phosphate cycle
Chart Industries - GTLS - broad exposure to hydrogen, LNG, data centers, SMRs, Harris stock
Brunswick - BC - units already down 5-10%, and $6/share still possible
Red Rock Resorts -RRR - Durango is doing great, Inspirada in Henderson is in the pipeline for 2026, maybe?
Royal Gold - RGLD - exposure to 40+ development projects
Tyson - TSN - nearly a monopoly is some parts of meatpacking
Kinder Morgan - KMI - significant projects added to backlog, Trump stock
Helmerich & Payne - HP - 1/3 of rigs still on the sideline, Trump stock
Treehouse - THS - ugly last five years, but generic snacks and drinks are growing
Jack in the Box - JACK - franchisees exited about Del Taco
Titan International - TWI - restructuring story in agricultural/construction tires
Revvity - RVTY - the Perkin-Elmer assets have been sold, bio/pharma slowly improving
Darling -DAR - near the bottom of the rendering cycle, Harris stock
Halliburton - HAL - still going to make $3/share at the bottom of the cycle
HF Sinclair - DINO - well located refiner, buying back shares like crazy
Rayonier - RYN - steady timber sales for paper/box making, might have the secret sauce in real estate development
First Cash - FCFS - pawn shops are the only financial institution I trust, Harris stock
Middleby - MIDD - dominant food service capital equipment supplier
Cable One - CABO - waiting for the Nexstar’s quarter, shaky