SWGAY Overview

Global Market Trends: Investors are currently favoring narratives over financial fundamentals, leading to many companies trading below their book value despite strong balance sheets and financial health, particularly in the U.S., Europe, Japan, and China.

U.S. Market Insights: In the U.S., many asset-intensive businesses, especially in the financial sector, are undervalued despite solid capital positions and liquidity, reflecting a market mindset of crisis rather than current financial realities.

European Financial Strength: European banks and industrial companies are well-capitalized and generating profits, yet they are trading below tangible book value due to market perceptions of impending downturns, creating investment opportunities.

Japanese and Chinese Opportunities: Japan's companies often have strong balance sheets with net cash positions, while in China, a distinction exists between companies with solid financials and those facing real risks, presenting a selective investment landscape focused on financial strength.

Global Market Overview: November 2025 saw a significant relief rally in global markets following the resolution of a historic U.S. government shutdown, with strong performances from various international stocks, particularly in Argentina and Hong Kong.

U.S. Economic Conditions: The prolonged government shutdown negatively impacted the U.S. economy, leading to increased job dismissals and deteriorating consumer sentiment, although the market rebounded as political resolution emerged.

Regional Market Performance: European markets showed cautious optimism with gains across major indices, while Asian markets, particularly in China and Hong Kong, displayed signs of stabilization and recovery, especially in the property sector.

Investment Strategy and Outlook: The Perfect Stock portfolio, adhering to value investing principles, focuses on companies trading at significant discounts to intrinsic value, with a diversified global approach that positions it well for future opportunities amid ongoing economic uncertainties.

Revised Price Target: The average one-year price target for Swatch Group AG - Depositary Receipt has been lowered to $36.11 per share, a decrease of 22.13% from the previous estimate of $46.36.

Analyst Target Range: Current analyst targets for Swatch Group AG range from a low of $107.43 to a high of $22.65 per share, representing a significant decrease of 445.50% from the last reported closing price of $10.45.

Fund Sentiment: There has been an increase in institutional ownership of Swatch Group AG, with 9 funds reporting positions, a 28.57% rise in the last quarter, and total shares owned increasing by 18.49% to 831K shares.

Shareholder Activity: Notable changes in shareholder positions include BlackRock increasing its holdings by 29.44% to 444K shares, while Hantz Financial Services slightly decreased its holdings by 2.21% to 276K shares.

Swiss Watch Exports Decline: Swiss watch exports fell by 3.1% year-on-year in September, totaling 2 billion Swiss francs ($2.5 billion), primarily due to a significant 55.6% drop in exports to the U.S., the industry's largest market.

Market Performance Variations: While the U.K. saw a growth of 15.2%, Japan experienced a moderate decline of 7.9%, indicating mixed performance across different markets despite overall strong growth in most regions.

Gen Z's Impact on Luxury: Gen Z is reshaping the luxury market by prioritizing sustainability, digital culture, and affordable prestige over traditional logos and heritage brands, as highlighted by a Reuters survey.

ETF Performance Comparison: The KraneShares Global Luxury Index ETF (KLXY) has shown better performance with an 11.5% return since its September 2023 debut, while the Themes European Luxury ETF (FINE) has remained flat and lost 3.6% over the past year, indicating KLXY's broader appeal to Gen Z's preferences.

Portfolio Performance: The international deep value portfolio saw an average stock increase of 7.87% in September 2025, with year-to-date gains exceeding 30% and an average yield of 3.31%, reflecting a strategy focused on acquiring quality assets at significant discounts.

Regional Market Dynamics: The portfolio's Asian holdings, representing 40% of total assets, face complexities due to China's economic changes, while European investments, making up 35%, navigate geopolitical uncertainties and macroeconomic challenges, highlighting the diverse opportunities and risks in global markets.

Maritime and Energy Investments: Shipping investments benefit from favorable supply-demand dynamics, with companies like Scorpio Tankers and Genco Shipping showing resilience, while energy holdings like Peabody Energy capitalize on robust demand amid the ongoing energy transition.

Outlook and Risk Management: The portfolio's deep value orientation positions it well for potential market shifts towards value investing, with a focus on strong dividend yields and asset backing, while maintaining a diversified approach to mitigate risks across sectors and geographies.