We're Putting Our EPS Diplomats Model to Work
This basket we're enacting today provides a diversified complement to our current positions and exposures. Plus, Buffett’s Google move may trigger some prudent action on our part.
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| Symbol | Transaction Type | # Shares Traded | Recent Price $ | Shares Owned After Trade | % Portfolio |
|---|---|---|---|---|---|
B | Buy | 368 | 37 | 368 | 0.25 |
CLS | Buy | 44 | 310 | 44 | 0.25 |
CRDO | Buy | 94 | 145.0 | 94 | 0.25 |
FIX | Buy | 15 | 914 | 15 | 0.25 |
KGC | Buy | 535 | 25.50 | 535 | 0.25 |
PGR | Buy | 60 | 225.20 | 60 | 0.25 |
STX | Buy | 53 | 258.25 | 53 | 0.25 |
VRT | Buy | 79 | 173 | 79 | 0.25 |
After you receive this Alert and when the stock market opens, the Pro Portfolio will make the following trades:
-- Buy 368 shares of Barrick Mining Corp. (B) at or near $37. Following the trade, B shares will account for roughly 0.25% of the Pro Portfolio’s assets.
-- Buy 44 shares of Celestica (CLS) at or near $310. Following the trade, CLS shares will account for roughly 0.25% of the Pro Portfolio’s assets.
-- Buy 94 shares of Credo Technology (CRDO) at or near $145.50. Following the trade, CRDO shares will account for roughly 0.25% of the Pro Portfolio’s assets.
-- Buy 15 shares of Comfort Systems (FIX) at or near $914. Following the trade, FIX shares will account for roughly 0.25% of the Pro Portfolio’s assets.
-- Buy 535 Kinross Gold Corp. (KGC) shares at or near $25.50. Following the trade, 535 KGC shares will account for roughly 0.25% of the Pro Portfolio’s assets.
-- Buy 60 shares of The Progressive Corp. (PGR) at or near $225.20. Following the trade, 60 PGR shares will account for roughly 0.25% of the Pro Portfolio’s assets.
-- Buy 53 shares of Seagate Technology (STX) at or near $258.25. Following the trade, STX shares will account for roughly 0.25% of the Pro Portfolio’s assets.
-- Buy 79 shares of Vertiv Holdings (VRT) at or near $173. Following the trade, VRT shares will account for roughly 0.25% of the Pro Portfolio’s assets.
Last Thursday, we discussed how small, select baskets of stocks are a useful tool to capture targeted exposures to an investment portfolio. We also described the EPS Diplomats model, which is a basket of eight large-cap stocks curated based on their multi-year EPS growth prospects. What we have captured in this basket is a track record of EPS growth outperformance in 2024 and expected continued growth in 2025 and 2026 based on reported EPS and consensus estimates.
We are enacting this basket today, with each position accounting for 0.25% of the Pro Portfolio’s assets, leading the basket to start off at 2.0% of the overall Pro Portfolio. On December 31, we will exit the model’s holdings, book expected gains, and reconstitute the model’s strategy based on updated consensus EPS figures for 2025 and 2026, effective January 2. At that time, the total basket will be reset to 2.0% of the Pro Portfolio’s assets.
That same process will be repeated quarterly, which means housekeeping for the model should be minimal. It also means you can expect that minimal activity to occur at quarter-end and the start of the new quarter. As such, after today’s start, the next set of active dates for the model will be 12/31/25, 1/02/26, 3/31/26, 4/01/26, and so on.
Some of the initial holdings in the basket will likely change, but there could be one or two that remain. In that case, we will reset the corresponding position size back to 0.25% of the Pro Portfolio so the new basket will begin the quarter at 2.0%.
The only time we may adjust the model’s composition during the quarter is if a company is acquired. Otherwise, the model is set until the next reconstitution. That also means there are no price targets or ratings for each of the positions that make up the basket.
What we are aiming to do is capture the cream of the crop in terms of EPS growth, with the reason being that premium EPS growth garners multiple expansion, and that combination is a nice tailwind for stock prices.
We will share that in down-selecting the initial candidates for this model, Nvidia (NVDA) and Palantir (PLTR) were in the initial basket. However, given our existing positions in both those stocks, we put them to the side to avoid position-size issues. In doing so, the “slowest” rate of EPS growth expected over the 2024-2026 period is 83%. That is with Vertiv.
We will also share that the smallest market cap company in the initial basket is Credo Technology at ~$25 billion, and the lowest average trading volume is with shares of Comfort Systems. Outside of that stock, the next lowest average trading volume is with Celestica shares at 3.1 million shares per day. Volume considerations are one of the key reasons why the starting set of stocks for the model is large-cap stocks, and for that, we are defining large-cap as stocks with a market cap over $10 billion.
We see this as a very nice and diversified complement to the fundamentally and thematically targeted exposures we have in Pro Portfolio.
Buffett’s Google Move May Trigger Some Prudent Portfolio Action
Following the trade, the Pro Portfolio’s cash position will be roughly 6.9% of its assets. With what looks to be a positive start to the week, with at least some of that due to the pre-market pop we are seeing in Alphabet (GOOGL) shares, we will remind you that while we are inclined to let our winners run, past a certain point, we will bow to our discipline.
What’s powering GOOGL shares higher this morning is the revelation that Warren Buffett and Berkshire Hathaway (BRK.A) (BRK.B) acquired 17.9 million shares during Q3 2025. In recent weeks, similar headlines have led to pops in shares of Qualcomm (QCOM) and Marvell (MRVL) , and the prudent move was to capitalize on that movement before the shares eventually faded. For Qualcomm, it was news that the company would enter the data-center chip market in a meaningful way next year, while for Marvell, it was that SoftBank had contemplated buying the company earlier this year.
This means we may look to take advantage of today’s move in GOOGL by locking in another slice of gains after the market open and as the herd mentality pushes the shares higher. Much like the moves we made in QCOM and MRVL shares, this is would be opportunistic action and does not signal a change in our outlook for GOOGL shares. As we move through the balance of the current quarter, we’ll revisit our current GOOGL price target as new data on digital advertising and market share for search engines and AI models are had.
Coming Up Later Today
We will have an updated Pro Portfolio table of each position’s consensus EPS figures, RSI levels, and beta figures, including the holdings being added this morning as part of our EPS Diplomats model. For our 25 individual stock holdings, we will also have updated panic and pick up point levels.
And because it is Monday, we will have Office Hours this afternoon, from 4 PM – 5 PM ET, in the Forum. We’ll send a reminder out early this afternoon.
(Please note that we are looking to execute these trades at or near the share price mentioned above. Once the trade is completed, subscribers can see the trade's executed price here. Be sure to toggle the chart to sort by Purchase Date.)
At the time of publication, TheStreet Pro Portfolio was long NVDA, PLTR, GOOGL, QCOM, and MRVL.
