Over The Pond – The 2025 (American) Football Team Line-Up
Written by Julian Wheeler – Partner and US Equity Specialist
Last June, ahead of the ‘Euros’, I created a portfolio set out as a football team, made up of 11 US stocks set out in attacking and defensive positions. This is the team for next year, retaining 3 of the last squad but this time set out as the ‘Offence’ for American Football.
The Offensive Line in American Football is made up of a ‘Centre’, two ‘Guards’ and two ‘Tackles’: so I want 5 large, relatively stable companies that protect the portfolio, create space for my nippy ‘Running Backs’ or ‘Tight End’ to gain performance yards and allow time for my ‘Quarterback’ to throw a touchdown pass to the ‘Wide Receivers’.
The ‘O Line’
Kenvue: This spin-out from healthcare giant Johnson & Johnson owns brands such as Listerine and Band Aid. New management with sole focus on this segment and a consumer staple company not impacted by the rise of weight loss drugs.
Cheniere Energy: leader in LNG exports helped by a rebound in US Gas prices. But I continue to hold as it is a likely beneficiary of the policies of the new Trump administration’s wish to increase domestic energy production.
Chubb: at approximately half the market multiple, the insurance titan offers value and stability. Climate change has arguably altered the dynamics of property forever and while we will all pay more premia, companies such as Chubb should benefit.
Alphabet (Google): arguably the most controversial of the tech giants, their chances of escaping breakup or censure have improved with Trump. Expected poor outcomes are dominating the price and the demise of internet search/advertising thanks to AI has been greatly exaggerated. And autonomous driving? Waymo is ahead after all, they have a product on the road – Tesla does not.
Jefferies Financial: this relatively smaller Wall St investment bank should benefit even more than the giants from two positive trends. Less regulation under Trump should give a boost to M&A activity, while the late bull market cycle produces an increase in the number of IPOs coming to market.
Then 6 more volatile, higher beta, point scorers. I just hope they don’t drop the ball! A ‘Full Back’, who sometimes gets the ball but more often blocks and creates an opening for one of the stars of the team, the ‘Running Back’. The ‘Tight End’ is versatile and can be an eligible receiver of a pass, although the specialists for that are the two ‘Wide Receivers’, who are usually lighter and the fastest players on the team. Finally, the ‘Quarterback’ who, as most people know, drives the team up the field and calls the tune.
The Playmakers
Gap Stores: Apparel (that’s clothes retail to this side of the pond) is all about momentum, inventory management and correct fashion choices. Yes, Gap is back (plus Old Navy and new Lululemon competitor Athleta) and it has all three of those things heading in the right direction.
Volaris. Included because it is US listed; this is Mexico’s leading airline. I love the sector, but after the US carriers have done so well this year, I want a laggard who can take-off in 2025 after recent weakness. Can rebound as panic over the new President’s tariffs proves unfounded and the fact that they had a lot of aircraft out of service now due to return.
Boeing. The worst performer in the Dow Jones in 2024, I take to be one of the best in 2025. I simply do not see how things can get any worse and therefore can only get better. Boeing is one of a global duopoly and that will eventually restore a lot of value, just don’t wait for the good news. Production of the 737 has finally just restarted.
Bluebird Corp. A small cap at just $1.3bn, this company makes those iconic yellow school buses. A replacement cycle underway as municipalities move to EV versions. The stock is down because of Trump, which I see as an opportunity. A school bus uses a short, regular, route back to a depot – perfect and cost effective for electric vehicles. Just like the old UK milk floats!
Keysight Technologies. a stealth AI play? New ‘chips’ into power hungry networks, all in new complex, expensive data centres. What if something doesn’t work? Very, very costly for the operator. Enter Keysight, who test and emulate components first to ensure it all operates correctly.
Cloudflare: my own Patrick Mahomes at Quarterback. Never heard of it? 25% of the internet traffic touches them. Think of this as the ‘Fourth Cloud’; this is the future of secure infrastructure needed for the deployment of AI applications at the edge of the network.
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The information and opinions expressed within this document are the views of (the company) and are based on information we believe to be reliable, but we do not represent that they are accurate or complete, and they should not be relied upon as such. Any information provided is given in good faith but is subject to change without notice.
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Disclaimer:
This document is provided for information purposes only and is intend for confidential and sole use by the recipient. It is not to be reproduced, copied or made available to others. The information set out in this document does not constitute investment advice or a personal recommendation. The views expressed in this document are not intended as an offer or a solicitation, to purchase or sell any security or other financial instrument, credit or lending product or to engage in any investment activity.
Past performance is not a guide to future performance. It is important that you understand that with investments, your capital is at risk. The value of investments, as well as the income derived from them, can go down as well as up and investors may get back less than the original amount invested. It is your responsibility to ensure that you make an informed decision about whether to invest with us, based on your particular objectives. If you are still unsure if investing is right for you, please seek independent advice.
The information and opinions expressed within this document are the views of (the company) and are based on information we believe to be reliable, but we do not represent that they are accurate or complete, and they should not be relied upon as such. Any information provided is given in good faith but is subject to change without notice.
No liability is accepted whatsoever by (the company) or its employees and associated companies for any direct or consequential loss arising from this document.