We’re Unwinding Our Hedging Positions, Adding to Two Others

After you receive this Alert, the Pro Portfolio will make the following trades:

Symbol	Transaction Type	# Shares Traded	Recent Price $	Shares Owned After Trade	% Portfolio
PSQ	Sell	963	25.78	0	0.0
SH	Sell	918	33.60	0	0.0
BA	Buy	155	225.63	558	2.1
PCAR	Buy	265	117.34	1,080	2.1

–Sell the remaining 963 shares of the ProShares Short QQQ ETF (PSQ) at or near $32. This will close the Portfolio’s position with this last slug of shares, generating a loss of ~20%.

–Sell the remaining 918 shares of the ProShares S&P 500 ETF (SH) at or near $38. This will close the Portfolio’s position with this last slug of shares, generating a loss of ~20%.

–Buy 155 shares of Boeing (BA) at or near $227.25. Following the trade, we will own 558 BA shares, accounting for roughly 2.1% of the Portfolio’s assets.

— Buy 265 shares of Paccar (PCAR) at or near $117.35. Following the trade, we will own 1,080 PACR shares, accounting for roughly 2.1% of the Portfolio’s assets.

With the U.S. and Iran signing the peace memorandum of understanding, the re-opening of the Strait of Hormuz starting, oil and gas prices poised to fall further, and the Fed acknowledging the market’s expectation for a likely rate hike this year, we are unwinding our remaining positions in SH and PSQ shares. While they have been a drag on the Portfolio, they have helped tamp down market volatility on the Portfolio and, more than a few times in recent months, done their job when needed.

While we could see some additional bumps in the road ahead, the factors that led us to put those inverse ETFs into the Portfolio are retreating. If we see conditions emerge where it might be necessary to add these tactical positions back into the Portfolio in the future, we will do so.

We are funneling the returned capital from winding down those two positions into shares of our two latest Portfolio additions — Boeing and Paccar.

Boeing Buy

The move by KKR (KKR) we discussed in today’s opening comments and the affirmation that aircraft capacity remains tight bodes well for further production increases at Boeing and the operating leverage they bring. meanwhile, falling oil prices should translate into lower jet fuel prices, removing some concern about airline capital spending risk.

And while it hasn’t been touched on much, under the One Big Beautiful Bill Act (OBBBA), airlines are able to fully depreciate new aircraft provided the aircraft is used more than 50% for qualifying business purposes in the taxable year. That sure sounds like it fits within the scope of an airline’s business and companies that lease aircraft to airlines.

Paccar Purchase

Turning to Paccar, the extended age of the current truck fleet, 100% bonus depreciation under the OBBBA, pending emission regulations, and the rebound in manufacturing activity bode well for rising truck demand and corresponding production rates. Similar to our comment about falling jet fuel prices, falling diesel fuel prices should alleviate capital spending risks at large fleet operators.

As we scoop up these additional shares, our respective price targets for BA and PCAR shares of $260 and $135 remain. What we see in upcoming monthly figures from Boeing and the trucking industry as well as other industry-specific data, could give us reason to revise either one or potentially both of those targets.

More Pro Portfolio:

(Please note that we are looking to execute these trades at or near the share price mentioned above. Once the trade is completed, subscribers can see the trade’s executed price here. Be sure to toggle the chart to sort by Purchase Date.)

At the time of publication, TheStreet Pro Portfolio was long BA, PCAR, PSQ, and SH shares.