| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | 3.9% | 8.1% |
| 2025 |
|---|
| 3.9% |
Stewart Asset Management's flagship portfolio underperformed in Q3 2025, gaining 3.89% versus S&P 500's 8.12%, with year-to-date returns of 2.97% versus 15.23%. Manager Thomas Valenzuela attributes roughly half the underperformance to UnitedHealth, America's largest health insurance group, which was liquidated after accusations of overcharging federal government for medical services. Two smaller declining positions were also sold. Despite near-term underperformance, the manager maintains confidence in the portfolio's positioning, citing fifteen superb global leader businesses with strong, sustainable earnings growth. The portfolio's Look-through Earnings are expected to grow twice as fast as the S&P 500 over the next five years. Economic tailwinds include resolution of tariff wars, struck trade deals, continued economic expansion, substantial profit growth, and a sound banking system. While acknowledging a slowing job market and government shutdown risks, the manager believes policymakers are aware of these challenges and expects the portfolio to achieve the long-term goal of doubling client money every five years.
Portfolio of fifteen global leader businesses with strong, sustainable earnings growth positioned to deliver Look-through Earnings growth twice as fast as S&P 500 over next five years.
Manager expects continued economic growth with substantial profit growth. Portfolio's Look-through Earnings expected to advance sharply next year and continue growing. Believes past worst of tariff wars with trade deals struck and sound banking system supporting growth.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Oct 30 2025 | 2025 Q3 | UNH | earnings, growth, healthcare, large cap, value | - | Stewart Asset Management underperformed in Q3 after liquidating UnitedHealth position due to federal overcharging accusations. Despite near-term headwinds, manager maintains conviction in portfolio of fifteen global leaders with earnings expected to grow twice as fast as S&P 500 over next five years, supported by economic expansion and substantial profit growth. |
| Mar 31 2025 | 2025 Q1 | - | earnings, growth, Quality, Trade Policy, value | - | Stewart Asset Management's portfolio underperformed in Q1 amid tariff uncertainty and economic slowdown fears, but strong underlying earnings growth of 17% continues. Portfolio now trades at attractive 11X-12X 2030 earnings, near Covid lows. Manager sees potential market bottom forming with excellent multi-year return prospects from current compelling valuations. |
| Dec 31 2024 | 2024 Q4 | ADBE, GOOGL, MA, NVDA | AI, Concentration, earnings, growth, large cap, technology, US | - | Stewart Asset Management's concentrated portfolio of high-quality businesses delivered 27.60% returns in 2024, driven by 20% earnings growth led by AI beneficiaries like Nvidia. With projected 18% annual earnings growth over five years versus 9% for the S&P 500, the manager sees opportunity to double client capital despite current market valuations. |
| Sep 30 2023 | 2023 Q3 | ADBE, COST, MA, NVDA, UNH | earnings, growth, interest rates, large cap, technology, valuation | - | Stewart's concentrated growth portfolio significantly outperformed in Q3 despite market decline, driven by resilient earnings from quality holdings like Nvidia, Adobe, and Costco. Manager forecasts 16% annual earnings growth over five years, creating attractive forward valuation despite interest rate headwinds. Maintains conviction that 4% Treasury yields are normal for growing economy. |
| Jun 30 2023 | 2023 Q2 | ADBE, AMZN, FND, GOOGL, ISRG, MTCH, NVDA | Concentration, growth, large cap, long-term, technology | AAPL|MSFT|NFLX|NVDA|UNH | Stewart's concentrated growth strategy outperformed in Q2 with 12.89% net returns versus S&P 500's 8.74%. The portfolio focuses on exceptional business leaders with uncommon earnings growth potential over five-year horizons. Strong performers included Nvidia, Adobe, and Amazon. Manager trimmed Nvidia on valuation concerns and sold Match Group. Forecasts 17%+ annual earnings growth over next five years. |
| Nov 15 2022 | 2022 Q3 | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q3 |
EarningsManager emphasizes strong earnings growth across portfolio companies and expects Look-through Earnings to grow twice as fast as S&P 500 over next five years. Almost all portfolio companies anticipate continued strong growth for remainder of year and coming year. |
Earnings Growth Profit Growth Look-through Earnings |
| 2025 Q1 |
Trade PolicyThe government announced intent to impose high tariffs on almost all trading partners, though several countries have declared desire to negotiate bilateral trade agreements. The Federal Reserve Chairman stated tariffs will likely result in slower growth and higher inflation. |
Tariffs Bilateral Inflation Growth Fed |
EarningsLook-through earnings of portfolio investments grew 17% in Q1 2025, with estimated 21% growth expected for full year 2025. During 2019-2024, portfolio earnings grew 16.3% annualized despite bear market periods. |
Growth Portfolio Fundamentals Compounding | |
| 2024 Q4 |
AIAI is driving significant growth across portfolio holdings, with Nvidia being closely associated with artificial intelligence and providing computer chips, networking equipment, and software for data centers. Practical AI applications are already enhancing business operations through services like Photoshop, NotebookLM, and credit card fraud detection from portfolio companies Adobe, Alphabet, and Mastercard. |
Artificial Intelligence Data Centers Software Chips Networking |
EarningsThe portfolio's Look-through Earnings grew by 20% in 2024, with the three largest holdings experiencing the fastest growth. The manager expects portfolio earnings to grow over 18% annually for the next five years, significantly outpacing the S&P 500's projected 9% annual growth rate. |
Earnings Growth Look-through Earnings Growth Rate Performance Outperformance | |
| 2023 Q3 |
EarningsThe manager attributes portfolio strength to resilient earnings power, with Adobe, Costco, and UnitedHealth showing strong earnings growth. Nvidia reported powerful earnings growth in Q3, with management expecting continued growth despite economic concerns. The manager forecasts 16% annual earnings growth for the portfolio over the next five years. |
Growth Resilience Technology Healthcare Consumer |
RatesHigh interest rates are compressing price-earnings ratios and generally precede recessions. The Federal Reserve aims for a soft landing while returning inflation to 2%, creating investor confusion. The manager argues that 4% on the 10-year Treasury is normal for a growing economy and that quality companies can trade at higher valuations even with elevated rates. |
Federal Reserve Inflation Valuation Treasury Monetary Policy | |
| 2023 Q2 |
AINvidia exemplifies the AI theme as a leader in advanced semiconductors, specialized networking equipment and proprietary software across growing global markets. The company has entrenched itself as a leader in AI-related markets and its earnings increased nearly four-fold in five years. The manager believes Nvidia is a business whose earnings power will continue to grow rapidly despite considerable valuation increases. |
Semiconductors Nvidia Software Networking |
GrowthThe strategy focuses on owning exceptional leaders that can produce uncommon earnings growth consistently over long periods. The manager forecasts portfolio earnings power has potential to grow slightly more than 17% per year over the next five years. The portfolio companies' aggregate earnings have grown faster than the S&P 500 during the past 18 months of uneven market conditions. |
Earnings Leaders Long-term Exceptional |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jun 30, 2023 | Fund Letters | Stewart Asset Management | AAPL|MSFT|NFLX|NVDA|UNH | Nvidia Corporation | Information Technology | Semiconductors & Semiconductor Equipment | Bull | NASDAQ | AI, data center, Gaming, Gpu, growth, Hardware, networking equipment, semiconductors, Software, technology | Login |
| TICKER | COMMENTARY |
|---|---|
| UNH | About half of our underperformance this year is attributable to what is America's largest health insurance group. We held the shares for several years but have now liquidated the holding. Over the years, the company's earnings grew strongly, and their shares rose swiftly. More recently, the company was accused of overcharging for the medical services they provide to the Federal government. |
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