January 2020 - Trade Themes & Highlights

Strategy Themes:

Our equity strategies reduced cash weight from 3.5% to 2.0% on average.

Reduced exposure to extended valuations within the portfolio.

Increased exposure to companies with quality earnings and raised guidance.

Market Topics:

Global manufacturing accelerating with global PMI at 52.5 the highest level in 10 months.

US equity markets rotating from growth to value driven by possible return of global growth.

Continue to allocate portfolios into companies that should do well if global PMI continues to show improvement.

Select Growth Equity - January Trade Activity

Purchased MS [Morgan Stanley] = Morgan Stanley is a financial holding company that operates in Institutional Securities, Wealth Management, and Investment Management. The company delivered a strong 4th quarter with non-GAAP EPS of $1.30 vs. consensus of $0.98, largely driven by strong net interest income (NII), core revenue +9% year over year, and core efficiency ratio of 74%. A few days after these strong results, market volatility created an opportunity to buy this company at levels prior to their quarterly results.

Purchased HCA [HCA Healthcare] = HCA is one of the largest integrated healthcare delivery systems in the US given in unmatched scale and infrastructure. HCA boasts impressive market share growth and free cash flow at an attractive valuation relative to competitors and 5-year average. HCA's managed care pricing, expense control, and accretive M&A strategy highlight our constructive view on this differentiated healthcare company.

Purchased QRVO [Qorvo] = Qorvo is an American semiconductor company that designs, manufactures, and supplies radio-frequency systems for applications that drive wireless and broadband communications. It has a strong presence among handsets and has applications in data centers, base stations, defense, and Internet of Things products. QRVO's 5G content story remains compelling along with its reasonable valuation at PE FY1 EPS multiple of 17.5x vs. S&P 500 at 19.5x.

Reduced AAPL [Apple Inc.] = Apple had a very strong year of performance in 2019. As the stock appreciated, we felt it was prudent to trim an out-sized single stock position and maintain portfolio diversification.

Sold DFS [Discover Financial Services] = DFS is a direct banking payment services company that offers credit card loans, student loans, personal loans, home equity loans, and deposit products. DFS had a relatively in-line 4th quarter, however, we were concerned about their elevated 2020 expense guidance due to technology/marketing spend and a higher net charge off rate. We deployed capital into more attractive opportunities.

Sold BK [The Bank of New York Mellon] = Much like DFS, Bank of New York Mellon had a disappointing quarter in terms of expense guidance - implying +2% year-over-year. Additionally, the outlook for weaker-than-expected net interest income and modest fee growth cautioned investors. We deployed capital into more attractive opportunities.

As always please reach out with any questions or concerns.

Thank you,

Joseph Sharma, CFA

Chief Investment Officer

Direct: (908) 741-8340

[email protected]

Oliver Luxxe Assets, LLC is a SEC-Registered Investment Adviser. A copy of the Firm’s Current Disclosure Brochure can be found on the SEC’s IAPD site ( https://adviserinfo.sec.gov/IAPD) or may be requested at any time by contacting us.

Significant risk may accompany investments in stocks, bonds or other asset classes over short periods of time. Investment return and principal value will fluctuate with changes in market conditions. Your investment may be worth more or less than your original cost.

Past performance is not indicative of future results.

This report is a publication of Oliver Luxxe LLC. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of subjects discussed. All expressions of opinion reflect judgment of author as of date of publication and are subject to change. Information contained herein does not involve rendering of investment advice. A professional adviser should be consulted before implementing any of strategies presented. Information is not an offer to buy or sell, or a solicitation of any offer to buy or sell securities mentioned herein. Different types of investments involve varying degrees of risk. Economic factors, market conditions, and investment strategies will affect performance of any portfolio and there are no assurances that it will match or outperform any particular benchmark. This document may contain forward-looking statements relating to objectives, opportunities, and future performance of U.S. market generally. Forward-looking statements may be identified by the use of such words as; “believe,” “expect,” “should,” “potential” and other similar terms. Examples of forward-looking statements include, but are not limited to, estimates to financial condition, results of operations, and success or lack of success of any particular investment strategy. All are subject to various factors, including, but not limited to economic conditions, changing levels of competition in industries and markets, changes in interest rates, and other economic, governmental, regulatory and other factors affecting a portfolio’s operations that could cause results to differ materially from projected results. Such statements are forward-looking in nature and involve known and unknown risks, uncertainties and factors, actual results may differ materially from those reflected in forward-looking statements. Investors cautioned not to place undue reliance on forward-looking statements / examples. None of Oliver Luxxe LLC or any affiliates, principals nor any other individual / entity assumes any obligation to update any forward-looking statements as a result of new information, subsequent events or any other circumstances.