Quality company portfolio This portfolio, comprised of quality companies, with growing free cash flows, managed by outstanding management teams, underperformed, returning 5.54%. The portfolio had limited exposure to the magnificent 7 shares and had two major detractors, where share prices went down on sentiment. The major detractors were Novo Nordisk (NVO) that was down 50% at year end and Brown & Brown (BRO) Inc that was down 27% from the date of adding it to the portfolio. NVO is the largest manufacturer and distributor of diabetic treatments and one of the two leaders in GLP1 weight loss drugs. It had been affected by negative sentiment related to Trump’s tariffs and the perceived superiority of Eli Lilly’s (LLY) GLP1 treatments. NVO has a new CEO, announced significant staff reductions and its new manufacturing plants in the US are both online now and manufacturing at capacity. Its daily oral GLP1 treatment is the only one with FDA approval, all other products are self injectables. Sentiment has shifted and the NVO share price has increased 30% over the last month from its low. Side note: NVO is trading at a historic PE of 13 whilst LLY is trading at a PE of 56. The NVO ADR listed in New York has 6 analysts following it whilst LLY has 30 analysts following its share. All share prices revert to underlying and projected EPS over time! BRO is one of the largest independent insurance Brokers in the US, still managed by the Brown family who have a material interest in the business. It is a disciplined, serial acquiror of similar business, and made its largest acquisition to date in the 2025 calendar year. This together with general softening of the short-term insurance market in the US has weighed on its sentiment and resulted in analysts downgrades and resulting decline in share price. We remain confident in management’s ability to continue growing earnings into the future. Now on to our winners for 2025 in this portfolio:
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