Model Weights:
Long GPRE 1%
Long TSN 1%
Short CWK LN -1%
Long SHOP 1%
Short DUOL -1%
Thesis Summary
The U.S.-U.K. Economic Prosperity Deal (EPD), enacted May 8, 2025, marks a rare bilateral trade catalyst that reshapes cross-Atlantic flows in agricultural commodities and digital services. The following trade set expresses direct positioning on regulatory clarity, quota creation, and tariff restructuring. We structure the trade with five 1% allocations, generating concentrated exposure to asymmetric tailwinds and valuation risk.
Position 1: Long Green Plains Inc. (GPRE)
Theme: U.S. Ethanol Market Expansion
EPD Catalyst: The U.K. will open a preferential 1.4 billion liter duty-free ethanol quota for U.S. producers.
Green Plains is well-positioned as a modern ethanol exporter. On its Q1 2025 earnings call, management highlighted international demand and “regulatory-aligned partners” as key drivers for the next margin leg. GPRE offers a clean expression of the new ethanol flow path created by the EPD, with upside leverage to export margins and demand elasticity.
Position 2: Long Tyson Foods Inc. (TSN)
Theme: Tariff-Free U.S. Beef Access
EPD Catalyst: The U.K. will remove its 20% tariff on U.S. beef and introduce a 13,000 metric ton duty-free quota.
Tyson emphasized its export strategy on the latest earnings call, noting volume unlocks and a pivot to higher-margin international buyers. TSN benefits from cost-side leverage, scale, and now regulatory preference, creating a rare margin tailwind in an otherwise saturated domestic market.
Position 3: Short Cranswick plc (CWK LN)
Theme: U.K. Protein Margin Pressure
EPD Catalyst: With duty-free U.S. beef entering the U.K. market, domestic protein producers face import-driven pricing pressure.
Cranswick is exposed to U.K.-centric meat and fresh meal production. Rising competition in beef, especially on price and scale, risks compressing margins. CWK.L is tactically exposed to tariff policy shock, and structurally underweight in international diversification.
Position 4: Long Shopify Inc. (SHOP)
Theme: Digitized Trade Enablement
EPD Catalyst: The agreement commits to “ambitious digital trade provisions” including paperless trade and digitized goods movement.
Shopify’s rollout of Markets Pro positions it as a compliant, cross-border commerce solution that integrates tariff and VAT management. The platform now services global SMBs seeking frictionless international expansion. SHOP stands to benefit from cross-border digital normalization, capturing new workflows driven by regulatory harmonization and trade facilitation.
Position 5: Short Duolingo Inc. (DUOL)
Theme: Regulatory Headwinds for Consumer SaaS
EPD Catalyst: While digital trade is encouraged, the agreement hints at alignment on digital standards and accountability, favoring infrastructure over discretionary apps.
Duolingo remains a high-multiple, consumer-facing edtech platform with minimal exposure to cross-border compliance infrastructure. It trades at over 10x forward sales. DUOL represents thematic drag in a policy shift toward trade-compliant platforms. Multiple compression risk is acute as capital rotation favors platforms with tangible trade enablement.
These positions are part of our illustrative model portfolio and is presented for informational purposes only. It does not constitute personalized investment advice.
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