| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Sandhill Investment Management's Q2 2026 letter describes a market characterized by strong headline performance but unusual underlying dynamics. The S&P 500 rebounded roughly 15% from lows, supported by the fastest expected earnings growth in five years, though valuations remain extended at 20.5 times forward earnings. Beneath the surface, 22 S&P 500 stocks have doubled this year, surpassing the 1999 record, driven primarily by semiconductor companies benefiting from AI data center spending. The sector now represents nearly 20% of the index, up from 2% a decade ago. However, more than half of Information Technology stocks are in bear markets. The manager is finding value in overlooked areas, recently initiating positions in Badger Meter, a water technology company benefiting from aging infrastructure replacement, and Forgent Power Solutions, an electrical equipment manufacturer positioned for AI-driven power demand. On the consumer side, while the top 10% of earners drive nearly half of all spending, broader strain is evident with savings rates near 60-year lows and sentiment at pandemic-era depths. The firm is modestly extending duration in corporate bonds at yields above 5% while remaining selective in equities.
While broad market valuations remain elevated and consumer data shows growing strain beneath the surface, significant dispersion is creating attractive entry points in quality businesses that have been overlooked as investors fixate on AI-driven data center buildouts.
The manager expects to continue taking advantage of short-term volatility to invest in durable businesses with attractive long-term prospects, while remaining mindful of the broader economic backdrop. The firm is tracking unusual movements in both markets and the economy that are shaping views for the second half of the year and beyond, including growing consumer strain despite strong headline spending data.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 29 2026 | 2026 Q2 | BMI, FPS | AI, consumer, Corporate Bonds, Data centers, Power Equipment, semiconductors, valuation, water |
BMI FPS |
Sandhill sees a bifurcated market where AI-driven semiconductor concentration masks broad weakness, with over half of tech stocks in bear markets despite strong index performance. The firm is deploying capital selectively into overlooked quality businesses including water infrastructure and power equipment plays, while extending duration in corporate bonds above 5%. Consumer data shows growing strain beneath strong headline spending, warranting caution on the economic outlook. |
| Apr 17 2026 | 2026 Q1 | TXN | AI, fixed income, Geopolitical, Middle East, semiconductors, volatility | TXN | Middle East conflict has created 9% market pullback, but historical analysis shows geopolitical shocks typically recover within twelve months. Sandhill is using volatility to upgrade portfolios, initiating Texas Instruments position as semiconductor cycle recovers. AI transformation continues creating opportunities in indiscriminate selling. Fixed income providing stability while fundamentals ultimately drive long-term returns despite headline noise. |
| Oct 10 2025 | 2025 Q3 | AJG, AMD, BA, CR, NVDA, ORCL, TTAN, TYL | aerospace, AI, diversification, healthcare, insurance, software, Valuations |
CR AJG |
Markets hit all-time highs despite economic headwinds, driven by AI concentration creating bubble risks. Manager emphasizes diversification, adding aerospace, insurance, and software positions in undervalued sectors. Key thesis: selective quality investing while AI-related stocks dominate returns but face viability and infrastructure constraints. Cautious but opportunistic approach given elevated valuations and economic uncertainty. |
| Jul 24 2025 | 2025 Q2 | - | active management, Cash, fixed income, Quality, Valuations, volatility | - | Sandhill successfully deployed cash during the recent 20% correction before the S&P 500's 25% rebound to new highs. Their active approach focuses on quality companies with strong fundamentals. As valuations reached elevated levels, they trimmed positions and raised cash. Despite macro concerns including inflation and tariffs, they remain cautiously optimistic while finding opportunities in fixed income. |
| Apr 7 2025 | 2025 Q1 | ANET, JPM, TT | banks, Bonds, Cash, HVAC, Quality, tariffs, technology, volatility |
TT JPM ANET TT |
Sandhill views April 2025's tariff-driven market crash as an opportunity to deploy cash reserves into quality companies like JPM, ANET, and TT. With S&P 500 valuations compressed from 22x to 18x P/E and the firm's focus on low-leverage, strong balance sheet companies, they're positioned to capitalize on dislocation while maintaining defensive positioning through normalized bond markets. |
| Jan 10 2025 | 2024 Q4 | - | diversification, Fed policy, Market Volatility, Recession, Stagflation, tariffs, Trade Policy | JPM | Trade policy uncertainty drove Q1 market decline with S&P 500 down 4.8%, but diversified portfolios held up better. Firm maintains disciplined approach, avoiding major shifts while rebalancing during volatility. Believes current tariff-driven uncertainty represents short-term pain that will resolve, with balanced portfolios positioned to benefit from market dislocations over time. |
| Oct 2 2024 | 2024 Q3 | AAPL, AMZN, AVGO, GOOGL, INTC, META, MSFT, NVDA, ORCL, TSLA | AI, China, Federal Reserve, gold, Mining, rates, Silver, technology | - | AI fever drove markets higher with Magnificent 7 leadership and Nvidia's exceptional results. Fed delivered rate cuts despite political pressure. Manager maintains US tech exposure while favoring ex-US opportunities, particularly discounted Chinese internet stocks. Precious metals surge continues with gold and silver delivering strong returns. Portfolio positioned for technology upside while hedging fiscal risks through metals exposure. |
| Jan 4 2024 | 2023 Q4 | AAPL, AMZN, GOOGL, META, MSFT, NVDA, TSLA, VOW3.DE | AI, Buybacks, gold, infrastructure, Japan, technology, Trump, US | - | TEAM capitalized on Trump-driven US market euphoria through concentrated Magnificent 7 exposure, delivering strong Q4 returns. The firm maintains overweight US mega-cap technology positioning for 2025, expecting continued AI productivity gains and infrastructure spending. Key hedges include gold exposure and intermediate credit over government bonds, while managing risks from potential inflationary policies and rising yields. |
| Oct 5 2023 | 2023 Q3 | 1928.HK, 2282.HK, AIR.PA, ALD.AX, AZJ.AX, CABK.MC, CIP.AX, COL.AX, CS1.AX, EDV.AX, FCX, FDV.AX, GMEXICOB.MX, HSBA.L, LLOY.L, MSCI, NEE, NEM, NST.AX, QUB.AX, TECK, WYNN | Banking, commodities, Copper, cyclicals, Europe, gaming, gold, value | - | PM Capital's Global Companies Fund returned 10% in Q1 FY2026, outperforming markets through disciplined value investing in commodities and European banks. Gold and copper positions drove returns despite supply disruptions. European banks continued re-rating on infrastructure spending optimism. Macau gaming recovered strongly. The manager maintains contrarian positioning in undervalued cyclicals while reducing exposure after profitable exits. |
| Jul 18 2023 | 2023 Q2 | 1928.HK, 2282.HK, AIB.I, BIRG.I, CABK.MC, CGF.AX, CRN.AX, CSTCF, DEO, EDV.AX, FCX, FDV.AX, GQG.AX, HEIA.AS, INGA.AS, LLOY.L, NEM, NEM.AX, RI.PA, SHEL, SIE.DE, SNY, SPEC.L, TECK, WYNN | Automation, commodities, Copper, European Banks, gaming, gold, Onshoring, value |
LYG SCCO NEM AIBG.L |
PM Capital delivered solid quarterly performance led by European banks and commodities, their two largest themes. European banks trade at significant discounts to peers while benefiting from rising infrastructure spending. Commodities benefit from supply constraints and geopolitical dynamics. The Great Decoupling between US and China creates reshoring opportunities requiring patient capital. |
| Apr 12 2023 | 2023 Q1 | 1928.HK, BAC, BHP, CGF.AX, CNI.AX, COR.AX, FCX, HEIA.AS, IMD.AX, ING, JPM, MIN.AX, QUB.AX, RPRX, SHEL, SIE.DE, SMR.AX, SNY, WDS.AX, WYNN | banks, Buybacks, Copper, defense, Europe, infrastructure, tariffs, valuation | - | PM Capital delivered 7.8% returns in Q1 2025 as European banks and industrials outperformed amid tariff-driven volatility. The fund benefits from Europe's accelerated infrastructure and defense spending while remaining cautious of elevated US valuations. Key moves included exiting JP Morgan after strong decade-plus returns and increasing European exposure through ING and Siemens positions. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
SemiconductorsSemiconductor companies have experienced explosive growth driven by AI data center spending, with share prices and valuations rising rapidly. The sector now represents nearly 20% of the S&P 500, up from roughly 2% a decade ago. However, more than half of S&P 500 Information Technology stocks are in bear markets, down over 20% from highs. |
AI Data Centers Semiconductor Cycle Valuation |
AIAI-driven data center buildouts are dominating investor attention and driving market concentration. The firm is deploying a new AI technology platform across the firm to serve clients better. AI infrastructure spending is accelerating, creating critical constraints on power equipment for new data center capacity. |
Data Centers Infrastructure Technology Power Equipment | |
WaterThe firm initiated a position in Badger Meter, a pure-play water technology company with a leading position in smart water meters and cellular advanced metering infrastructure. The multidecade replacement cycle for aging water infrastructure, combined with increasing technology adoption, provides a durable growth runway. |
Infrastructure Utilities Technology Municipal | |
Power EquipmentThe firm initiated a position in Forgent Power Solutions, a manufacturer of electrical distribution equipment including transformers, switchgear, and prefabricated power systems for data centers and the electric grid. Power equipment has become a critical constraint on new data center capacity as AI infrastructure spending accelerates. |
Data Centers Grid Upgrade AI Infrastructure | |
InflationYears of elevated inflation are taking a toll on household budgets, with strain becoming increasingly visible in consumer data. Inflation concerns and shifting Federal Reserve policy expectations have pushed interest rates higher over the last couple of months. |
Consumer Rates Fed Policy | |
| 2026 Q1 |
AIAI represents a multi-year transformation that will reshape large parts of the economy. The market has been slow to credit AI winners, instead selling off broad baskets of perceived AI losers, creating opportunities for long-term capital appreciation in indiscriminate selling. |
Artificial Intelligence Technology Transformation Winners Losers |
Semiconductor CycleThe analog semiconductor market is emerging from a prolonged downturn and beginning to recover. Texas Instruments represents this opportunity as a leading analog manufacturer coming out of a six-year investment cycle with improved capacity and profitability. |
Analog Recovery Capacity Profitability Cyclical | |
| 2025 Q3 |
AIAI capital expenditure boom continues driving market returns since ChatGPT's release. AI-related stocks account for 75% of market returns and 90% of capital spending. Manager sees potential bubble risks around economic viability and energy infrastructure constraints for data centers requiring enormous power. |
Data Centers Semiconductors Cloud Energy Infrastructure Capital Expenditure |
SoftwareManager sees opportunity in software sector where investor sentiment has turned overly pessimistic amid AI displacement fears. Added positions in Tyler Technologies and ServiceTitan, viewing them as beneficiaries rather than victims of AI disruption through automation and productivity gains. |
SaaS Enterprise Software Vertical Software Government IT Automation | |
AerospaceStrong secular growth opportunity from Boeing increasing production schedules and massive aircraft backlogs for both Boeing and Airbus. Added to Crane position to benefit from aerospace division growth in this long-term trend. |
Defense Components Aerospace Components Aviation Services Industrial Machinery | |
| 2025 Q2 |
QualityThe manager emphasizes owning quality assets with strong management teams, low debt levels, healthy cash flows, and exposure to long-term secular growth trends. These companies tend to outperform over time and press their advantage during economic downturns. |
Quality Cash Flow Management Growth |
Risk AppetiteThe manager discusses taking advantage of market volatility by deploying cash during the correction and subsequently trimming positions as valuations rose. They increased cash position for flexibility to reinvest when new opportunities arise. |
Volatility Cash Positioning Flexibility | |
| 2025 Q1 |
Trade PolicyNewly announced U.S. tariffs on the rest of the world are creating market instability and uncertainty. These tariffs will increase costs to corporations and consumers, dampen demand, and push the global economy toward recession if they remain in place. |
Tariffs Trade Global Recession Uncertainty |
QualityThe firm emphasizes quality above all else, favoring companies with strong balance sheets, resilient business models, and solid organic growth potential. In their Concentrated Equity Alpha Strategy, every company is at or below 2x leverage, with many holding net cash positions. |
Balance Sheets Leverage Resilient Growth Net Cash | |
Data CentersArista Networks is seeing continued growth due to the acceleration in AI-related data center spend. The company has been taking share in its core markets for years as a leading provider of data center networking and switching equipment. |
AI Networking Switching Growth Market Share | |
HVACTrane Technologies benefits from long-term structural demand driven by rising global temperatures, improved indoor air quality standards, and a growing push for energy efficiency. The company is a leading provider of commercial HVAC equipment and services. |
Structural Temperature Efficiency Commercial Services | |
| 2024 Q4 |
Trade PolicyThe administration's trade policies and tariff implementation created significant market uncertainty. The scope of Liberation Day tariffs was a negative surprise, moving beyond targeted reciprocal tariffs to across-the-board levies on all countries with trade deficits. This carpet bombing approach suggests goals beyond rebalancing asymmetric tariffs. |
Tariffs Trade War Reciprocal Liberation Day Stagflation |
Risk AppetiteMarket sentiment shifted from post-election optimism to concern about recession risks. Consumer confidence dropped sharply while inflation expectations rose. Analysts' base case assumptions about Fed rate cuts providing downside protection are now questioned amid potential stagflation scenarios. |
Recession Consumer Confidence Fed Cuts Downside Protection Uncertainty | |
InflationRising inflation expectations, though not actual inflation readings, combined with potential stagflation concerns complicate Fed policy decisions. The potential for higher inflation and weaker growth changes the calculus for monetary policy and increases risks of policy error. |
Stagflation Inflation Expectations Monetary Policy Policy Error Fed | |
| 2024 Q3 |
AIAI fever has gripped markets with the Magnificent 7 recapturing leadership. Nvidia delivered $47 billion revenue with 56% growth and announced major investments in Intel and OpenAI partnerships. The AI capex mania has added $15 trillion to S&P 500 market cap since April, with AI-related companies driving 75% of index returns and 90% of capex growth. |
Nvidia Data Centers Cloud Semiconductors Technology |
GoldPhysical gold and miners delivered phenomenal returns with gold up 19% and mining stocks up 50%. Central banks accumulated record amounts as marginal buyers, while ETF inflows surged to 420 tonnes in nine months. The manager views this as early innings of a secular bull market driven by dollar debasement and structural supply-demand imbalances. |
Gold Miners Central Banks Dollar Inflation ETFs | |
SilverSilver returned over 30% in the quarter with the manager introducing physical silver exposure due to chronic supply deficits expected for the next 5 years. Industrial demand is increasing from data centers for AI applications, EVs, and solar sectors, creating structural supply-demand imbalances. |
Silver Miners Industrial Demand Solar Electric Vehicles Supply Deficit | |
RatesFederal Reserve delivered a 25 basis point cut described as risk management to forestall labor market weakness. Markets are pricing two more cuts this year despite concerns about tariff-driven inflation. The manager remains skeptical about longer-term government bond pricing given fiscal sustainability concerns. |
Federal Reserve Interest Rates Monetary Policy Government Bonds Inflation | |
ChinaChinese equities broke out to decade-plus highs with Shanghai Index returning 15.7%. The anti-involution initiative curbing excessive price competition is being well received. Chinese internet companies trade at substantial discounts to US counterparts while earnings continue to inflect upwards, with growing competitiveness in high-tech sectors beyond EVs. |
Chinese Internet Technology Valuation Earnings High-tech | |
| 2023 Q4 |
AIAmerican productivity is set to surge higher driven by Artificial Intelligence capabilities. Companies are making good on impressive revenue and margin growth despite the need for meaningful consumer applications to justify extraordinary semiconductor chip investments. |
Artificial Intelligence Productivity Semiconductors Revenue Growth Technology |
Infrastructure SpendingThe American Society of Civil Engineers assigned a C- grade to US infrastructure, highlighting chronic need for major investment. Markets anticipate Trump and his cabinet will provide large earnings visibility for infrastructure-exposed companies. |
Infrastructure Investment Government Spending Trump Civil Engineers | |
GoldGold returned 6.45% in Q4 and touched new all-time highs across major currencies. Record central bank buying continues since Q3 2022, with 2024 being the only year where gold rallied over 25% while the US dollar also rose over 5%. |
Gold Central Banks All-time Highs Dollar Safe Haven | |
BuybacksJapan's share buybacks continue to surge, rising to a record ¥15 trillion this fiscal year compared with ¥8 trillion during the same period last year, driven by corporate governance revolution and Tokyo Stock Exchange reforms. |
Share Buybacks Japan Corporate Governance Tokyo Stock Exchange Record | |
| 2023 Q3 |
CopperPortfolio heavily weighted toward copper producers including Teck Resources, Freeport-McMoRan, and Grupo Mexico. Copper prices rose 5% in September following supply disruptions at major mines. The Freeport Grasberg accident shifted market expectations from surplus to deficit heading into 2026. |
Copper Miners Supply Disruption Deficit Industrial Metals |
GoldGold positions benefited from 17% price rise to all-time high of US$3,873. Newmont gained 45% and Northern Star rallied 26%. Despite record gold prices, investor ownership of gold equities remains low, with valuations still attractive and competitive capital returns. |
Gold Miners Record Prices Undervaluation Capital Returns | |
European BanksEuropean banking positions delivered strong results with steeper yield curve and growing confidence in infrastructure spending driving re-rating. Caixabank rose 22% yet trades below 11 times earnings, with plans for €12bn shareholder returns equivalent to 20% of market cap. |
Banking Yield Curve Infrastructure Spending Shareholder Returns | |
MacauMacau gaming positions including Wynn Resorts, Sands China and MGM China all gained over 30%. Industry-wide entertainment revenue growth accelerated through the year, driving renewed investor optimism after weak sentiment earlier in 2025 amid China concerns. |
Gaming Entertainment Recovery China | |
| 2023 Q2 |
European BanksEuropean banks are significantly undervalued relative to US and Australian peers, trading at circa 8x earnings. Rising infrastructure and defence spending in Europe could stimulate industrial activity and credit demand, supporting a recovery that could take years to play out fully. |
Banking Europe Valuation Credit Infrastructure |
CommoditiesUnderinvestment in resource projects will constrain commodity supply, supporting higher metal prices. President Trump is using commodities as bargaining chips for trade concessions, creating artificial barriers to supply that coincide with decades of global underinvestment and new demand from renewable transition. |
Copper Gold Mining Supply Trade | |
OnshoringThe COVID-19 pandemic and President Trump's trade policies are encouraging multinationals to increase manufacturing at home to reduce global supply chain risks. Factory automation and digitisation are critical for this trend due to cost and labor shortage considerations. |
Manufacturing Automation Trade Policy Supply Chain Reshoring | |
GamingMacau casinos faced pressure from US tariff concerns but rebounded in June driven by improved gaming data and tourism recovery. The sector trades at historically low earnings multiples with potential for high single-digit dividend yields. |
Casinos Macau Tourism Dividends Recovery | |
| 2023 Q1 |
Trade PolicyTariffs have become the primary market driver, creating uncertainty across global markets. The impact varies from direct effects on European holdings to second-order effects on consumer sentiment and corporate capital expenditure. Increasing US protectionist policies have accelerated Europe's decision to significantly increase infrastructure and defense spending. |
Tariffs Protectionism Trade Policy Uncertainty |
Defense SpendingEurope, especially Germany, is significantly increasing capital spending across infrastructure and defense in response to US protectionist policies. This increased focus on defense spending should lead to higher economic activity and benefit positions in European banks and industrial companies. |
Defense Infrastructure Europe Germany Spending | |
CopperPresident Trump signed an executive order investigating copper imports for national security implications and potential tariffs. This triggered a widening spread between Comex and LME copper futures, with Comex trading at a 15% premium. Tariffs could lead to structurally higher US copper prices given domestic supply constraints. |
Copper Comex LME Tariffs Supply | |
European UnionEuropean markets were increasingly overlooked with the US making up 73% of developed markets. European banks performed exceptionally well with the European Bank Index gaining 28% as investors recognized the normalization of interest rates, market consolidation, and double-digit shareholder returns. European bank valuations are becoming harder to ignore. |
Europe Banks Valuation Consolidation Returns | |
BuybacksShell outlined targets through 2028 continuing its trend of returning excess capital to shareholders via dividends and buybacks. At the current pace, Shell is on track to buy back 40% of its outstanding shares by 2030. Royalty Pharma is also opportunistically buying back shares while growing earnings. |
Buybacks Shell Capital Returns Shareholders |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 29, 2026 | Fund Letters | Sandhill Investment Management | BMI | Badger Meter | Scientific & Technical Instruments | Electronic Equipment & Instruments | Bull | New York Stock Exchange | Durable Growth, high switching costs, infrastructure, Municipal Utilities, oligopoly, Smart meters, technology adoption, Value, Water Technology | Login |
| Jul 29, 2026 | Fund Letters | Sandhill Investment Management | FPS | Forgent Power Solutions | Electrical Equipment & Parts | Electrical Components & Equipment | Bull | NASDAQ | AI infrastructure, data centers, Electric Grid, electrical equipment, growth, IPO, Supply Constraint, Switchgear, Transformers | Login |
| Apr 17, 2026 | Fund Letters | Sandhill Investment Management | TXN | Texas Instruments | Semiconductors | Semiconductors & Semiconductor Equipment | Bull | NASDAQ | Analog, CapEx, Cyclical, Fabrication, manufacturing, recovery, semiconductors | Login |
| Oct 10, 2025 | Fund Letters | Rick Ryskalczyk | CR | Crane Company | Industrials | Aerospace & Defense | Bull | New York Stock Exchange | Aerospace, aircraft production, backlog, Industrials, Oem, secular growth | Login |
| Oct 10, 2025 | Fund Letters | Rick Ryskalczyk | AJG | Arthur J. Gallagher & Co. | Financials | Insurance Brokers | Bull | New York Stock Exchange | Acquisitions, consolidation, earnings growth, insurance brokerage, Mid-market, recurring revenue | Login |
| Jul 7, 2025 | Fund Letters | Rick Ryskalczyk | TT | Trane Technologies plc | Industrials | Building Products | Bull | New York Stock Exchange | backlog, Climate, energy efficiency, HVAC, Pricing power, services | Login |
| Apr 1, 2025 | Fund Letters | Sandhill Investment Management | JPM | J.P. Morgan | Financials | Banks | Bull | NYSE | Bank, financial services, large-cap, market leader, Quality, yield | Login |
| Apr 1, 2025 | Fund Letters | Sandhill Investment Management | ANET | Arista Networks | Information Technology | Communications Equipment | Bull | NYSE | AI infrastructure, Cloud computing, data center, market share gains, networking equipment, technology | Login |
| Apr 1, 2025 | Fund Letters | Sandhill Investment Management | TT | Trane Technologies | Industrials | Building Products | Bull | NYSE | Climate Control, Commercial Equipment, energy efficiency, HVAC, Indoor Air Quality, Structural Demand | Login |
| Jan 10, 2025 | Fund Letters | Rick Ryskalczyk | JPM | JPMorgan Chase & Co. | Financials | Diversified Banks | Bull | New York Stock Exchange | Banks, Capital strength, diversification, Earnings Power, financials | Login |
| Jun 30, 2025 | Fund Letters | Sandhill Investment Management | LYG | Lloyds Banking Group | Financials | Banks | Bull | London Stock Exchange | banking, defensive, Equity, Europe, European banks, financial services, undervalued, Value | Login |
| Jun 30, 2025 | Fund Letters | Sandhill Investment Management | SCCO | Southern Copper Corporation | Materials | Metals & Mining | Bull | NYSE | Commodities, Copper, Electric Vehicles, Equity, geopolitical, Industrial Metals, Mining, renewables, supply constraints | Login |
| Jun 30, 2025 | Fund Letters | Sandhill Investment Management | NEM | Newmont Corporation | Materials | Metals & Mining | Bull | NYSE | central banks, Commodities, Equity, geopolitical, Gold, Mining, Precious Metals, Safe Haven | Login |
| Jun 30, 2025 | Fund Letters | Sandhill Investment Management | AIBG.L | AIB Group | Financials | Banks | Bull | London Stock Exchange | banking, buyback, Equity, European banks, financial services, Government Overhang, Ireland, Value | Login |
| Jun 30, 2025 | Fund Letters | Sandhill Investment Management | - | Challenger Limited | Financials | Insurance | Bull | Australian Securities Exchange | Annuities, Australia, Equity, financial services, Insurance, regulatory catalyst, Retirement, Value | Login |
| TICKER | COMMENTARY |
|---|---|
| BMI | We recently initiated a position in Badger Meter (BMI), a pure-play water technology company. Badger holds a leading position in smart water meters and cellular advanced metering infrastructure technology. It sells into an oligopoly market with high switching costs and municipal utility customers that value reliability over price. The stock pulled back sharply after a temporary air pocket in revenue growth tied to project timing, rather than any change in long-term demand. We believe the multidecade replacement cycle for aging water infrastructure, combined with increasing technology adoption, gives Badger a durable growth runway, and the recent weakness provided an attractive entry point. |
| FPS | We also initiated a position in Forgent Power Solutions (FPS), a newly public manufacturer of electrical distribution equipment, including transformers, switchgear and prefabricated power systems for data centers and the broader electric grid. As AI infrastructure spending accelerates, power equipment has become a critical constraint on new data center capacity. Forgent's ability to provide an integrated range of electrical products positions it well as customers seek faster and more coordinated solutions. |
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