PENCE Choke Point

The Pence Choke Point portfolio seeks long-term growth of capital. It aims to achieve this objective through a portfolio consisting of a minimum allocation of 80% US domestic companies and a maximum of 20% to foreign equities. These companies are relevant to Pence’s investment theme of disruptive technologies and puts consumer behavior at the center of the process.

Pence’s investment process begins with looking at Big Knowable Themes from changing consumer behavior to technological innovations. Pence Choke Point is a growth-oriented portfolio that is focused on investing in high-quality companies with strong growth potential. The portfolio aims to achieve long-term capital appreciation by identifying and investing in companies that demonstrate robust financial health, innovative capabilities, and competitive advantages. The portfolio utilizes between 40 and 60 individual companies.

A Choke Point is a point and place in time where everything must go through to get from where it is to where it wants to be. A certain limited number of companies can dominate the supply chain between human demand and satisfaction.

Investment Process

  • Standard allocations in this composite are generally up to 90% equity and up to 10% cash.
  • The portfolio utilizes between 40 and 60 individual companies varying from 1% to 6% weighting with market cap over $10 billion and projected sales over $1 billion.
  • Minimum 75% of the holdings are $100 billion cap and maximum 25% of the portfolio are with less than $100 billion.

Asset Allocation

As of 12/31/2024

Gross Returns

As of Dec 31, 2024

Top Holdings

Name
Portfolio %
Nvidia
3.84
Amazon
3.44
Broadcom
3.26
Alphabet
3.08
Meta
3.07
Apple
2.83
Microsoft
2.72
ServiceNow
2.64
Walmart
2.61
Netflix
2.53

Characteristics

Portfolio
Standard Deviation % (260d)
11.77
Weighted Average Mkt Cap ($B)
741
Median Market Cap ($B)
268
% Top 10 Holdings
30.01
Dividend Yield %
1.84
Price/Earning (12mo Trailing)
28.03
Price/Earning (12mo Forward)
22.49
Price/Book
7.00
Price/Sales (12mo Trailing)
3.13
Price/Cash Flow (12mo Trailing)
19.56
Debt/Equity Ratio %
102.52
Total Holdings
56
Long-term Earnings Growth (%)
14.57
Long-term Sales Growth (%)
9.20

% of Portfolio in Cap Range

Portfolio %
> $50 Billion
95.92
$10-50 Billion
2.13
<$10 Billion
0.0

S&P/ MSCI GICS

Portfolio %
Information Technology
31.81
Communication Services
13.65
Consumer Discretionary
13.03
Industrials
11.70
Consumer Staples
9.34
Health Care
8.45
Financials
6.60
Energy
3.68

As of 12/31/2024

Disclosure

The following composite benchmark is used for the Aggressive Growth Model

57% – S&P 500 INDEX
19% – Russell 2000 Index
12% – MSCI EAFE Net Total Return Index
7% – MSCI Emerging Markets Net Total Return Index
5% – FTSE 3 Month Treasury Bill

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How to invest

Pence Capital Management develops investment strategies for distributors and model portfolios for advisors. To invest in Pence Capital Management Strategies, please contact your broker or advisor.

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