HNW Holdings Update
The HNW sleeve is designed to give equity exposure to a group of individual stocks that offer attractive prospects through a combination of yield, growth, quality, and reasonable valuations.
Holdings as of 5/1/2020
Fidelity National Information Services, Inc. (FIS) is a financial services technology company with a steady stream of recurring revenue. In 2019, FIS made a transformational acquisition of Worldpay, a payment service provider that offers shops online services for accepting electronic payments. Furthermore, FIS’ legacy business is among the largest core banking software providers for many large banks.
Simply put, we believe Wall Street under appreciates the strategic value of the recently announced Worldpay acquisition. The deal structurally changes the growth profile of the company essentially overnight on top of enhancing the margin profile as well. In short, we believe the deal makes a lot of sense and we expect the stock to re-rate higher once investors begin to fully appreciate this transformative combination.
We’ve decided to sell Intel Corporation (INTC), the largest semiconductor maker in the world, as we lowered our overall growth rate for the name, bringing its “Yield + Growth” below our double-digit threshold. Thus, we decided to allocate into the faster growing FIS. Furthermore, from our perspective the stock appears to be already reflecting a lot of optimism as it trades with a valuation that is at the upper end of the historical range. Given this run, we decided to move on.
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SPDR S&P ETF Trust is an exchange-traded fund incorporated in the USA. The ETF tracks the S&P 500 Index. The Trust consists of a portfolio representing all 500 stocks in the S&P 500 Index. It holds predominantly large-cap U.S. stocks. This ETF is structured as a Unit Investment Trust and pays dividends on a quarterly basis. The holdings are weighted by market capitalization. The volatility (standard deviation) of the Impact Series may be greater than that of the SPDR® S&P 500® ETF.
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