May Changes

Tax Deferred

(for mobile swipe left to right)

New Additions Complete Sales Partial Sales Additional Buys % of Account Traded
BAC 1.7%
QCOM 0.5%
MSFT 1.4%
AAPL 3.3%
SDHC 0.2%
D 1.0%

Taxable

(for mobile swipe left to right)

New Additions Complete Sales Partial Sales Additional Buys % of Account Traded
BAC 2.3%
AAPL 1.5%
SDHC 0.2%
D 1.0%

Summary of Month’s Action:

The S&P 500 gained approximately 5.0% during May, recouping the bulk of the April swoon.  Information technology, utilities, and communication services led from a sector perspective, while energy, consumer discretionary and industrials lagged. In client portfolios, Qualcomm, Microsoft and T-Mobile were the top contributors, while Cencora, Tyson Foods and Stanley Black and Decker were the largest detractors. All preceding data sourced from Refinitiv.

T-Mobile’s performance is worthy of further explanation as the company benefited from merger enthusiasm. The company acquired 4 million customers, stores and some spectrum from UScellular in the quarter, at what we believe is an attractive price. T-Mobile continues to look attractive to us as the company enters its cash harvesting phase following the major acquisition and integration of Sprint.

Security Specific Comments:

We trimmed these securities to make room for purchases this month. We held MSFT in taxable accounts, as the taxable gain made the trade less attractive.

QCOM has provided an excellent return in a short time for Lincoln Capital clients. Investors appear to be warming up to the improved smartphone landscape and the prospect of share gains in the personal computer CPU market. Qualcomm-based Windows PCs are now shipping to customers and early reviews are favorable. QCOM’s ARM-based CPU should provide battery and heat benefits, particularly important attributes as more AI computation is moving to the ‘edge’ from the data center.

We decided to add to two of our smaller holdings to make them more meaningful for portfolio returns. Smith Douglas continues to remain volatile, but we believe prospective returns warrant the turbulence. Dominion, and utilities in general, have performed well as investors embrace the idea that power consumption could soon be increasing, a large change from recent history.

We added to shares of Apple ahead of their June 10th World Wide Developers Conference (WWDC). The company is expected to introduce multiple generative AI functions into the next iOS release, some of which will only be available on new iPhones to be released in the fall.  Additionally, it’s expected the company will announce a partnership with either OpenAI or Google for cloud-based generative AI functionality. Use cases are expected to be focused on a more helpful Siri.  While we have been less enthusiastic about Apple in recent years, we believe that AI could provide the catalyst for a material ‘replacement’ cycle. There are approximately 1.3 billion iPhones in service today, and last fiscal year approximately 222 million iPhones were sold globally. iPhone users have been holding onto their devices for close to 5 years, a massive increase in retention compared to the less than 2 years retention seen a decade ago. Small moves in replacement cycles can have major revenue implications at Apple, with Morgan Stanley’s bull case for fiscal 2025 representing a 19% increase in units from fiscal 2024.

Tear Sheets

Disclosures

The views expressed represent the opinions of Lincoln Capital Corporation as of the date noted and are subject to change. These views are not intended as a forecast, a guarantee of future results, investment recommendation, or an offer to buy or sell any securities. The information provided is of a general nature and should not be construed as investment advice or to provide any investment, tax, financial or legal advice or service to any person. The information contained has been compiled from sources deemed reliable, yet accuracy is not guaranteed.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2 available upon request or at the SEC’s Investment Adviser Public Disclosure website.

Past performance is not a guarantee of future results. Please note that due to rounding differences, certain data presented may not sum to 100%.

The investments presented are examples of the securities held, bought and/or sold in Lincoln Capital Corporation strategies during the last 12 months. These investments may not be representative of the current or future investments of those strategies. You should not assume that investments in the securities identified in this presentation were or will be profitable. We will furnish, upon your request, a list of all securities purchased, sold or held in the strategies during the 12 months preceding the date of this presentation. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of securities identified in this presentation. Lincoln Capital Corporation or one or more of its officers or employees, may have a position in the securities presented, and may purchase or sell such securities from time to time.