Throughout the third quarter, we made a few modifications to our portfolio. First, we sold our position in Diageo (tkr: DEO) as it continues to underperform its peers in the alcoholic beverage industry and consumer staples sector. The company is facing significant challenges in specific geographic regions, particularly Latin America and Caribbean, due to fast-changing consumer sentiment and high inventory levels. We also have concerns over the strategic execution of the company which is expected to persist through at least 2025. Furthermore, we are seeing an increase in the “sober curious” movement led by Gen Z, where consumers are focused more on their health and the impact of alcohol on their health. As a result, younger generations are opting to consume alcohol in moderation, if at all.

In the financial sector, we bought S&P Global Inc. (tkr: SPGI) which provides independent ratings, benchmark indices, and analytics for the capital and commodity markets worldwide. S&P Global’s strong brand, diversified revenue base, recurring income streams, and strategic acquisitions position the company well for long-term growth. Demand for its products and services tends to be resilient even during economic downturns, as corporations and governments continue to issue debt and require credit assessments while investors seek reliable insights during periods of uncertainty. Later in the quarter, we added to our position in S&P Global to get up to our sector target in the financials sector.

Lastly, we made some tweaks in our technology sector exposure, selling off an underperformer, Intel (tkr: INTC), and gaining broader exposure through a sector ETF. Intel has faced several headwinds as it strives to become a leading semiconductor manufacturer and bring substantial chip manufacturing capacity back on US soil. Intel’s Q2 2024 earnings announcement was an utter disappointment as it announced a 15% workforce reduction, suspended dividend, and lower than expected guidance, dragging the stock price down 27% in the trading session following its announcement. Whether its turnaround attempt will be successful in the long run remains to be seen. With the proceeds, we added to the SPDR Technology Select Sector ETF (tkr: XLK) which gives us diversified exposure to the technology sector with an expense ratio of just 0.09%.

Individual investment positions detailed in this post should not be construed as a recommendation to purchase or sell the security. Past performance is not necessarily a guide to future performance. There are risks involved in investing, including possible loss of principal. This information is provided for informational purposes only and does not constitute a recommendation for any investment strategy, security or product described herein. Employees and/or owners of Nelson Capital Management, LLC may have a position securities mentioned in this post. Please contact us for a complete list of portfolio holdings. For additional information please contact us at 650-322-4000.