Portfolio Strategy Pt. #3

What I'm Buying & Why

Investors,

Welcome to the third edition of “Portfolio Strategy”, where I share and analyze the investment thesis behind each of the 15 stocks & ETF’s that I’ve been buying in portfolios that I manage! Since issuing the first edition of this series, the stock market has consolidated lower. While many investors are panicking about current market conditions, I continue to view this environment as a dream scenario for young, long-term investors. Multiples have contracted and appear primed to decline even further. In fact, I genuinely hope I have the opportunity to buy more of these stocks at lower prices over the coming months.

Last month, I told premium members that I’d be pausing DCA purchases until the S&P 500 retested the 200-week moving average cloud again. As of last Friday, the S&P 500 perfectly retested the 200-week simple moving average. Regardless of whether or not the index rises or falls from here, I feel comfortable to marginally increase portfolio exposure again this week.

Today’s analysis will focus on two semiconductor companies, one that is very mainstream and another that you likely haven’t heard of before. Together, these stocks cover a wide portion of the semiconductor market, giving investors exposure to the top-performing companies in the industry. They have a proven track-record of operating success, have well-capitalized balance sheets, and have consistently outperformed the stock market indexes. In fact, these two stocks have outperformed the Nasdaq-100 by a factor of 13x and 4x over the past 10 years, respectively.

While I expect this degree of outperformance to normalize over the coming years, I still expect both stocks to significantly outperform the broader market going forward. Both companies have an unblemished record of delivering increased value to shareholders over the long-run, something that I believe will persist over the coming years. Through a combination of share price appreciation, dividend yields, and share buybacks, these companies have macro tailwinds to outperform & generate shareholder value.

Without further delay, I’m excited to share these two stocks with premium members and analyze the qualitative & quantitative factors that make me so keen to own these companies for the long-run.

These reports require multiple hours of dedication to write, diving into historical earnings reports, corporate presentations, Wall Street expectations, and developing a core understanding of business fundamentals. To support my work & benefit from the analysis below, please consider becoming a premium member, like this post, or share it with a colleague!