May 2025 Best Buys

Porter & Co.’s Best Buys In The Big Secret On Wall Street

Three Safe Havens From Downturns And Tariffs

This is Porter & Co.’s Best Buys, which we produce monthly as part of The Big Secret On Wall Street. We publish The Big Secret every Thursday at 4 pm ET. Once a month, we provide our paid-up subscribers with a full report on a stock recommendation, and also a monthly extensive review of the current portfolio… You can go here to see the full portfolio of The Big Secret. If you’re not yet a subscriber to The Big Secret, to access the full paid issue, the portfolio, and all of our insights and recommendations, please click here.

The Big Secret On Wall Street – our flagship publication – focuses on capital efficient stocks. The core investing thesis our team of analysts follows is finding world-class businesses that prioritize returning significant cash to shareholders. In our view, this is the simplest and surest path to permanent wealth.

We are opportunistic in the types of capital efficient businesses that we recommend. Some are long-term investments that we suggest buying and holding forever… we call these “forever stocks.” Others may be shorter-term plays in massive long-term trends like energy and commodities or tech stocks. We find ideas across all sectors of the market, and we are always on the lookout for a chance to buy great companies at the right price.

There are 43 recommended investments in The Big Secret portfolio – and we only keep companies in the portfolio that we truly believe represent good places to put your money. However, some stocks we’ve recommended provide better opportunities at the moment than others – some share prices have risen above our buy-up-to price, others might not have a catalyst that will drive its share price higher, still others are likely to be hit by macroeconomic trends that will hinder share-price growth over the near term. 

But others are likely to benefit or at least avoid some larger economic troubles.

This year, for example, the dollar and U.S. Treasuries have failed to serve their usual role as a safe haven against financial market chaos, with Treasuries losing 3% of their value while the U.S. dollar has dropped 7%. 

Instead, global investors are turning to gold as a safe haven, with the precious metal gaining 24% year to date. These gains come on top of an already-impressive rally that’s capped off a nearly 70% gain in the price of gold over the last two years. And this is all happening with the U.S. holding short-term interest rates at over 4%. When the Federal Reserve inevitably cuts interest rates later this year as the fallout from a collapsing stock market spreads into the real economy, further lessening the appeal of U.S. government bonds and currency, all bets are off as to how far this trend could go. 

We believe the stage is set for a loss in confidence in U.S. assets, which will likely bring a period of prolonged inflation and stagnant economic growth known as stagflation. Thus, it’s no surprise that gold stocks have become one of the few sectors with positive returns this year, with the VanEck Gold Miners ETF (GDX) up 38% year-to-date. 

However, companies involved with pulling commodities out of the ground have one major problem: They require huge amounts of capital to grow. During inflationary periods, those capital costs rise along with the value of the commodities they produce. And they must continuously sink ever-higher piles of capital into the ground, because they are constantly liquidating their balance sheets by depleting their existing reserve base. 

That’s why we prefer to simply own the rights to these commodities, via royalty companies. We’ll leave the hard and expensive work of digging commodities out of the ground to others. That’s the royalty business model in a nutshell – and it’s one that’s brilliantly employed by a company we are including in this month’s “Best Buys.”

During inflationary environments, the best businesses to own are those that can grow their earnings without escalating capital investments… In other words, businesses with high capital efficiency.

Along the same line of thinking, another source of safe havens this year have been found in tobacco stocks. 

These stocks are also incredibly capital efficient, thanks to their brand power that allows them to consistently raise prices without any incremental capital investments, leading to free cash flow margins exceeding 25%. And as we’ll describe below, these businesses can grow their earnings despite the economic turbulence we see ahead. Plus, they offer a natural hedge against the demise of the U.S. dollar thanks to their significant earnings from overseas countries denominated in foreign currencies that are strengthening while the dollar declines. 

We believe the three companies we are including as the “Best Buys” offer the best shelter against a slowing economy, and the greatest opportunity for share-price appreciation regardless of what happens next. Thus, we recommend investors put these names at the top of their “buy” list.