Trade Rationale

We exited our position in Estée Lauder and increased our position in Costco to a weight of 2.50% in Brookmont's Quality Growth Strategy.  Estée Lauder has been under pressure for several years following its post-COVID peak. Shifting consumer preferences in beauty and continued disruptions to travel retail have driven much of the weakness. Despite this, EL still trades at a high P/E multiple in line with the broader beauty industry....

We increased our position in NetEase to a weight of 2.50% in Brookmont's Dividend Growth and Core Dividend Strategies. Although technically a communications/entertainment company, NetEase has been caught up in the drawdown across software names over the past few months. We view the company as well insulated from AI disruption within the video game space. NetEase's MMO (massive multiplayer online) titles rely on functional in-game economies, which are difficult to replicate without large player bases and are easily compromised by the kinds of exploits common in vibe-coded products. Live-service games more broadly also require resilient backend infrastructure to maintain reliable uptime at scale. Our thesis on NetEase's durable franchises and consistent execution is unchanged.

We increased our position in Alphabet to a weight of 3.75% in Brookmont's Quality Growth Strategy. AI model development has moved quickly over the past six months, and Google's Gemini 3 materially improved the company's competitive standing, moving it from a lagging position into the top tier of frontier models. That shift addresses one of our primary reservations about the stock: the risk that Google was losing ground on AI capability relative to peers. With that concern diminished, we have greater conviction in the position.

We increased our position in Analog Devices to a weight of 3.75% in Brookmont's Dividend Growth and Core Dividend Strategies. Analog chips and microcontrollers are entering a fresh growth cycle. Following a year of weakness, demand trends and inventory levels have improved materially over the past few quarters. ADI also has several structural tailwinds: the proliferation of sensors and processors across products to collect data for the internet of things and AI applications, and an entrenched position in battery management systems with design wins at many of the top electric vehicle manufacturers. High-performance battery management improves accuracy and extends effective range, making Analog critical to EV performance. ADI is also a leader in wireless battery management, which eliminates wiring harnesses and reduces component costs, an area where adoption is still early.

We rebalanced Microsoft to a weight of 3.75% in Brookmont's Dividend Growth and Core Dividend Strategies. The stock has traded down with the broader software industry over the past few months on concerns that AI poses disruption risk to incumbent software businesses. Broader market volatility from the Iran conflict added further downward pressure. We view this as a compelling rebalance point. Microsoft's business productivity suite is the most deeply entrenched in the world, and we see minimal replacement risk from AI. On the geopolitical side, the conflict introduces near-term uncertainty but does not change our expectation for a multi-year growth cycle in cloud computing demand as AI workloads continue to scale.

 We added Meta Platforms at a weight of 2.50% in Brookmont's Quality Growth Strategy due to our improved assessment of the company’s prospects. This addition has meaningfully reduced our prior underweight position, although the 2.50% allocation remains below META’s weighting in the Russell 1000.  

We rebalanced Broadcom to a weight of 5.00%, increased our position in Microsoft to a weight of 7.50%, increased our postion in NVIDIA at a weight of 7.50%, decreased our position in Constellation Brands to 1.25%, decreased our position in Eastman Chemical to a weight of 1.25% and exited our positon in UnitedHealth Group in Brookmont's Quality Growth Strategy. 

Recent strong performance resulted in Broadcom increasing past 6.25% of the strategy weight. Per our risk mandates, we rebalanced AVGO back to its model weight of 5.00%.

We increased Microsoft in order to maintain an overweight to its weight in the benchmark, reflecting our continued conviction in the holding. Microsoft offers durable compounding via leadership in productivity software, Azure, and AI. Office 365’s Copilot is broadly integrated, driving measurable productivity gains, pricing power, and higher ARPU. 

We increased our position in BWX Technologies’ to a model weight of 3.75% and our position to Gilead Sciences to a model weight of 3.75% in Brookmont's Core Dividend Strategy to better reflect its current weight in the composite due to the recent strong performance. Additionally, we rebalanced BWXT down to its updated model allocation, which allowed us to realize some gains from its recent strength while keeping a moderate overweight in the aerospace and defense industry.

We increased our position in Gilead Sciences because of our increasingly strong conviction in the underlying thesis. Gilead’s HIV leadership underpins stable, high-margin cash flows with long therapy duration and limited LOE risk this decade.