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Why Freestone Grove Bought These 22 Stocks in Q1 2025: Inflation Hedges, Rate Cut Plays, and Slowdown-Proof Picks

Freestone Grove Capital revealed a batch of brand-new positions in Q1 2025 that offers a revealing look into how smart, former Citadel money is preparing for what’s next: persistent inflation, incoming rate cuts, tariff pressures, and the threat of a macroeconomic slowdown.

Rather than blindly chasing growth or hiding in cash, Freestone Grove is threading the needle with a hybrid strategy: owning companies with pricing power, industrial exposure, countercyclical resilience, and AI-driven secular upside. Below, I break down each new holding, unpacking the underlying macro themes behind these high-conviction bets.

Key Macro Themes Driving Freestone Grove’s Strategy

• Inflation Hedge: Pricing power, commodity exposure, and services with non-discretionary demand

• Rate-Cut Positioning: Long-duration growth and capital-intensive businesses poised to benefit from cheaper capital

• Tariff Insulation: Domestic manufacturers, reshoring beneficiaries, and logistics winners

• Slowdown-Resistant: Healthcare, managed care, pest control, utilities, and used-car parts

Stock-by-Stock Breakdown: What Freestone Grove Just Bought—And Why

Core Market Exposure

• VOO (Vanguard S&P 500 ETF)
  → Baseline exposure to the market in a year where broader upside could materialize via Fed cuts. A risk-mitigated anchor.

Defensive & Countercyclical Plays

• MO (Altria) – High-yield income and addictive pricing power make this a bond proxy in a slowing, high-inflation world.
  

• ROL (Rollins) – Pest control is immune to economic downturns and inflation. A pure-play slowdown shield–but also would benefit from gradually declining rates.

• ELV (Elevance Health) – Managed care with margin protection. Resilient cash flows with tailwinds from Medicare, Medicaid (more enrolled when economy slows) and commercial pricing.

• COR (Cencora) – Drug distribution business with low cyclicality and mission-critical logistics.

• AZO (AutoZone) – Used car repairs skyrocket during recessions. AutoZone is a classic trade-down and inflation hedge.

Industrial, Energy & Reshoring Bets

• GD (General Dynamics) – U.S. defense prime with cost-plus contracts. Tariff-insulated and backed by stable-rising geopolitical tensions.

• HON (Honeywell) – Industrial giant prepping a 3-for-1 spin-off. Current exposure to automation, defense, aerospace, and energy makes this a current sum-of-parts winner.

• GEHC (GE HealthCare) – Healthcare equipment spinoff with defensive FCF and stable demand.

• WWD (Woodward) – Niche industrial supplier to aerospace and defense markets; positioned for long-cycle uptrend.
  

• EOG (EOG Resources) – U.S. oil producer with FCF strength and inflation-fighting exposure. Domestic focus protects from global tariff shifts.

• GFL (GFL Environmental) – Infrastructure-aligned waste services company, selling off assets to Brookfield and Apollo to unlock value.

AI & Tech Infrastructure Positioning

• DDOG (Datadog) – Cloud observability software essential for AI workloads. Long-duration growth name that wins if rates fall.

• MU (Micron) – Positioned to ride the AI memory chip boom, especially High Bandwidth Memory (HBM).

• TXN (Texas Instruments) – Analog chipmaker with reshored manufacturing. Strong dividends + industrial & defense exposure.
  

• LITE (Lumentum) – Optical infrastructure provider linked to 5G and AI networks. More of a speculative growth leg, but also levered, so will more than likely outperform during upcoming gradual rate cuts.

• NTAP (NetApp) – Enterprise storage solution that will likely benefit from AI budget reallocations and cost-efficiency trends.

• PSTG (Pure Storage) – Flash physical storage pure-play gaining share. Lower rates boost long-term project adoption.

Retail & Consumer

• AMZN (Amazon) – AWS + logistics + advertising = durable secular growth. E-commerce and cloud more than likely to outperform during a declining rate environment.

• BURL (Burlington Stores) – Off-price retailer set to gain from trade-down behavior as the consumer weakens.
  

• TPR (Tapestry) – Value luxury name with dollar tailwinds and potential China upside. May benefit from eventual consumer recovery (weaker dollar due to prospective declining rates).

Utilities & Yield

• ETR (Entergy) – Regulated utility with high rate sensitivity. A safe yield play if the Fed begins easing in late 2025, early 2026.

Macro-Driven Portfolio Design

Theme	Freestone Grove Plays
Inflation Hedge	EOG, AZO, MO, GD, ROL
Pure rate-Cut Beneficiaries	DDOG, MU, LITE, PSTG, AMZN, TXN, VOO
Slowdown Defense	ELV, COR, GEHC, AZO, ROL, MO
Tariff Insulation / Reshore	HON, TXN, GD, GFL, WWD, ETR
Secular AI/Cloud Upside	DDOG, PSTG, NTAP, MU, LITE, AMZN
Event/Special Situations	HON (breakup), GFL (divestiture), GEHC (recent spin maturity)

Final Take: A Strategic Portfolio Built for What’s Coming, Not Just What’s Popular

This isn’t a scattershot portfolio—it’s a calculated map across the coming economic inflection point.

Freestone Grove is:

• Hedging inflation without panicking,

• Leaning into rate-sensitivity without abandoning fundamentals,

• And selectively betting on secular AI and infrastructure growth—all while largely insulating itself from geopolitical risk and trade headwinds.

With the Fed likely to cut rates in late 2025 or early 2026, and the global economy teetering between sticky inflation and disinflationary slowdown, this portfolio offers a template for risk-aware, forward-looking investors.

DISCLAIMER: This analysis of the aforementioned stock security is in no way to be construed, understood, or seen as formal, professional, or any other form of investment advice. We are simply expressing our opinions regarding a publicly traded entity.

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