Year End + QRS! + SYY! + MTDR! and Risk Assesment
Let’s make one last set of portfolio changes at year end. In general, I want to take a little risk out of the portfolio.
In a perfect world I would have a better writeup on the three new stocks, but I will try to finish that work in January.
There has been too much turnover in the last part of the year. The goal for 2025 is no more than 25% turnover.
Let’s add:
Restaurant Brands International - QSR - $65 - I really hate to swap into a $30 billion dollar market cap, but I want to take some risk of the table. The stock is at a 52 week low, and I really believe the story behind expanding Tim Horton’s in the US. This is kind of a placeholder until I decide on Portillo’s - PTLO - $9, or First Watch - FWRG - $19.
Sysco - SYY - $76 - I feel like a lowlife sellout adding this name, but I really understand the story. There are solid growth opportunities in the non-chain business. To me this is the ultimate low risk stock. I am a gutless weasel for not stepping up to Hasbro HAS - $56, Oxford - OXM - $79, or Etsy - ETSY - $52, but this is my placeholder. I almost used Antero Midstream - AM - $15 instead.
Matador Resources - MTDR - $56 - I want a little more energy exposure and this was the best low risk E&P company I could find. Maybe adding this stock is too much top down thinking, but 8% energy (including Halliburton) seems right. The alternative was Atlas Energy - AESI - $22.
Removing: Jack in the Box, Titan International, and Royalty Pharma. (these are still great ideas, just a little on the risky side, their fundamentals are unchanged)
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Let’s divide the portfolio into high, medium, and low risk.
High Risk:
Thor - THO - $96 - maybe the consumer is over-leveraged
Brunswick - BC - $65 - straight down from $85 only five weeks ago
RXO Corp. - RXO - $24 - great strategy, but plenty of economic exposure
Nexstar Media - NXST - $158 - advertising can be cyclical
Teck Resources - TECK - $40 - more China exposure than I prefer
Iridium - IRDM - $29 - do I really understand satellites?
Matador Resources - MTDR - $56 - oil demand is weak
Darling - DAR - $34 - there are regulatory issues in biofuel
AES Corp - AES - $13 - a Harris stock, in a Trump world, but the stock price already reflects that
Medium Risk:
Nutrien - NTR - $45 - fertilizer prices are variable
HF Sinclair - DINO - $35 - refining margins are variable
Middleby - MIDD - $135 - restaurant demand is lumpy
Chart Industries - GTLS - $191 - stock has run some, diversified
Red Rock Resorts - RRR - $46 - not travel dependent
Rayonier - RYN - $26 - some home price exposure
Halliburton - HAL - $27 - oil/gas price exposure
Kinder Morgan - KMI - $27 - stock has run
Low Risk:
Tyson - TSN - $57 - we need to eat
Sysco - SYY - $76 - we need to eat
Corteva - CTVA - $57 - we need to eat
Restaurant Brands - QSR - $65 - primarily franchise fees
FirstCash - FCFS - $104 - pawn shops are counter-cyclical
Royal Gold - RGLD - $132 - gold is a hedge
Revvity - RVTY - $112 - lab equipment is depressed
Alexandria Real Estate - ARE - $98 - 97% leased