Portfolio Amendments – International Equities Portfolio

Alphabet (GOOGL US) reported after the close of trade yesterday, delivering a solid result, which we covered here. While the result in itself was a beat, and Google has been the best performing A1 related stock in the mag seven over the past 12 moths up 74%, they too increased capex guidance for the year ahead, doubling their 2025 run rate to $175-185bn. We see a growing inability to forecast financial returns on front loaded capex, and while we continue to like the company and the stock, we are taking a more conservative stance in the short term, locking in a ~100% profit on the position, having bought in September of 2024.

We now view classified type businesses as a fertile opportunity for AI disruption. Overlay that with higher for longer interest rates, and Zillow becomes an easy candidate to scratch in the short term, given our bias towards more economically exposed businesses where we can anchor our analysis to more tangible assets & earnings.

Chubb (CB US) is a global insurance business that has a phenomenal underwriting track record, strong pricing power and a good investment book. While we have not written about Chubb in the past, we should have – and will do tomorrow. This is the type of business that should continue to compound book value at an attractive rate, driving consistent performance in the share price. We are buying the break-out to new highs, however, we don’t view CB as expensive trading around ~1.7x book (IAG 2.5x) and a PE of 12.3x. This is a more defensive play as we dial back the risk of the portfolio.

Ashland (ASH US) has been on the hitlist for many months, however this is a stock that will thrive in a risk off environment, where boring becomes interesting again. We are buying this high quality additives business, having covered it several times on the site in recent months.