Investment Pitches

Pitch Summary:
The Fund added to Samsung Electronics to increase exposure to AI infrastructure growth. Samsung has benefited from strong demand for AI-related chips, including DRAM and high-bandwidth memory (HBM). Its sixth-generation HBM4 semiconductor achieved the highest operating speed in Broadcom’s technical tests, supporting accelerated market share gains. These developments improved investor sentiment toward semiconductor manufacturers during the quarter.

BSD Analysis:
Samsung is memory cyclicality wrapped in one of the strongest balance sheets in global tech. Earnings swing violently, but survival is never questioned. AI-driven demand for advanced memory reshapes the profit curve over time. Investors anchor to old boom-bust scars. Capital discipline across the industry has improved meaningfully. Foundry ambitions add optionality even if margins lag today. Consumer electronics provide cash flow, not growth. When memory tightens, Samsung snaps back fast. This is optionality on patience, not a straight-line story.

Pitch Summary:
SSE delivered strong performance after announcing a five-year £33 billion investment plan focused on upgrading UK electricity networks and expanding its renewables footprint. The market responded positively to the scale and visibility of planned investment, reinforcing SSE’s defensive and growth characteristics. Accelerating grid modernization and renewable energy infrastructure spending underpin confidence in long-term earnings growth.

BSD Analysis:
SSE has transformed from a traditional utility into a renewables-heavy infrastructure platform with visible growth. Offshore wind and grid investments anchor multi-year capex pipelines. Execution risk exists, but demand for clean power and transmission capacity is structural. Investors worry about returns being regulated away. In practice, governments need capacity built, not theoretical targets met. Balance sheet discipline matters more than volume growth here. Cash generation improves as assets move from build to operate. This is energy transition with real steel in the ground. The boring work gets paid.

Pitch Summary:
National Grid was a positive contributor during the quarter as investors favored regulated utilities offering long-duration cash flows amid economic uncertainty. Confidence in its regulated asset base and investment program tied to grid modernization and renewable integration supported share price performance. The company continues to benefit from accelerating capital investment needs driven by electrification and energy security priorities.

BSD Analysis:
National Grid owns regulated energy infrastructure that economies literally cannot unplug. Grid expansion and reinforcement are no longer optional as electrification accelerates. Regulatory friction creates noise, but rate base growth ultimately drives returns. Capital intensity scares momentum investors, yet utilities are paid to build over decades. U.S. exposure adds diversification beyond the UK regulatory regime. Investors fixate on near-term politics instead of long-term asset growth. Cash flows remain predictable even in weak macro conditions. This is infrastructure patience, not excitement. Slow compounding backed by wires usually wins.

Pitch Summary:
LS Electric contributed positively during the quarter, benefiting from increased global spending on grid modernization and power transmission infrastructure. Demand remained strong across electrification-related end markets, supported by international infrastructure investment. The company added several significant contracts to its pipeline, including a 460 billion KRW ($312 million) agreement to supply high-voltage transformers to a renewable power plant serving a large U.S. data center. LS Electric is also positioned to benefit from Japan’s commitment to invest up to $25 billion in U.S. infrastructure and grid modernization initiatives.

BSD Analysis:
LS Electric sits squarely in the guts of electrification, supplying power equipment that grids and factories cannot function without. Demand is driven less by GDP growth and more by reliability, automation, and energy transition capex. Utilities and industrial customers don’t swap suppliers casually once systems are installed, creating quiet stickiness. Margin volatility reflects project timing, not weak positioning. Investors overlook LS Electric because it lacks global branding flash. Yet Korea’s export-heavy industrial base and global grid upgrades both feed order flow. As electrification moves from ambition to execution, power control matters more than software hype. This is hardware with software-like switching costs. Infrastructure wins when execution replaces slogans.

Pitch Summary:
LIG Nex1 declined alongside other Korean defense names during the quarter as investors locked in profits after strong year-to-date performance. The company continues to benefit from elevated geopolitical tensions and rising global defense budgets. Its advanced missile systems and precision-guided munitions have seen increasing international demand, supporting long-term revenue visibility. Management execution and a growing export pipeline underpin confidence in sustained earnings growth despite short-term share price volatility.

BSD Analysis:
LIG Nex1 is a high-tech defense contractor focused on precision-guided munitions, missiles, and electronic warfare systems. Demand is exploding as governments prioritize advanced deterrence over manpower-heavy platforms. The company’s technological specialization creates high barriers to entry and sticky customer relationships. Export opportunities are expanding rapidly, particularly in Asia and the Middle East. Margins scale as production volumes rise, creating meaningful operating leverage. R&D intensity is high, but that’s the price of relevance in modern defense. Visibility is improving as order backlogs grow. LIG Nex1 is a leveraged play on the shift toward smarter, more autonomous warfare.

Pitch Summary:
Hanwha Aerospace, the largest defense company in South Korea with significant exposure to naval, land and aero-based systems, experienced share price weakness in October and November as investors took profits following strong year-to-date gains. Despite the pullback, the company continues to expand its global presence as European governments increase defense spending to secure independent capabilities outside NATO frameworks. Additional ammunition and land-based system contracts were signed with European governments, and the Middle East has emerged as a growing opportunity for Hanwha’s K9 self-propelled howitzer and Chunmoo rocket system. In the fourth quarter, Korean defense companies secured $8.5 billion of domestic and export orders, reinforcing demand visibility. The company’s healthy cash flow generation and strong order backlog support continued near-term growth.

BSD Analysis:
Hanwha Aerospace is a major beneficiary of the global defense rearmament cycle, with exposure to engines, munitions, and advanced systems. South Korea’s defense exports are surging, and Hanwha sits at the center of that push. The company benefits from long production runs and government-backed demand visibility. Margins improve as scale ramps and fixed costs are absorbed. Execution and capacity expansion are the main risks, not demand. Geopolitical tension is unfortunately a tailwind here. Hanwha is transitioning from a domestic defense supplier to a global one. This is a multi-year growth story fueled by security realities, not budget optimism.

Pitch Summary:
EdgePoint increased its position in Alfa Laval during the 2025 market selloff as the stock declined significantly despite stable underlying fundamentals. The company continues to benefit from long-term demand tied to energy efficiency, electrification and industrial optimization. Short-term market volatility obscured the strength of its order book and earnings resilience. EdgePoint viewed the pullback as a chance to own a high-quality industrial compounder at a discount.

BSD Analysis:
Alfa Laval sits at the intersection of energy efficiency, heat transfer, and fluid handling — all areas quietly benefiting from regulation and decarbonization. Its equipment is deeply embedded in customer processes, making replacement cycles sticky and margins defensible. Exposure spans marine, energy, food, and industrial markets, providing diversification across cycles. The energy transition isn’t a slogan here — it directly drives demand for heat exchangers and separation tech. Order intake can be lumpy, but backlog quality is high. Engineering complexity limits competition. Capital discipline remains solid even as growth accelerates. This is industrial infrastructure hiding behind a modest growth profile. Alfa Laval compounds through necessity, not hype.

Pitch Summary:
During the volatility in early 2025, EdgePoint doubled down on Roche after the shares sold off more than could be justified by any change in the underlying business. Roche continued to generate strong operating results, supported by its diversified pharmaceutical pipeline and dominant diagnostics franchise. Market concerns were driven largely by macro uncertainty and sentiment rather than deterioration in fundamentals. EdgePoint viewed the selloff as an opportunity to increase ownership in a high-quality, defensive compounder at an attractive valuation.

BSD Analysis:
Roche is one of the last true pharma-research powerhouses, combining world-class diagnostics with deep therapeutic pipelines. Diagnostics give Roche a cash-generating, data-rich foundation that most pharma peers lack. Oncology remains the core franchise, even as legacy blockbusters mature. The pipeline is broad, but execution and launch cadence matter more than scientific ambition. Roche tends to underpromise and overdeliver — slowly, deliberately, and expensively. Margins are resilient because diagnostics smooth pharma volatility. Innovation cycles can test patience, but balance-sheet strength buys time. This is not a momentum pharma stock. Roche is built for decades, not quarters.

Pitch Summary:
Two years ago, EdgePoint developed a major thesis around Lincoln Electric tied to U.S. government funding for a nationwide EV charging network, believing Lincoln was uniquely positioned to supply chargers at scale. The opportunity was large enough that it could have meaningfully accelerated earnings growth. Ultimately, the funding never materialized as expected due to bureaucratic delays and policy changes. Despite this, Lincoln Electric continued to execute its core playbook: buying back shares, expanding automation, growing its 3D printing business through Department of Defense contracts and delivering margin expansion. EdgePoint exited the position in 2025 with an internal rate of return of 17.4%, demonstrating that the strength of the base business protected capital even when the original insight failed to play out.

BSD Analysis:
Lincoln Electric is a manufacturing throwback in the best possible way — obsessive about productivity, incentives, and execution. Its welding equipment and consumables are mission-critical in fabrication, construction, and heavy industry. The real moat isn’t the machines; it’s the consumables and service relationships that lock customers in. Cyclicality exists, but Lincoln’s incentive-driven culture consistently outperforms peers in downturns. Automation and robotics exposure adds a secular growth layer to a traditionally cyclical business. Margins reflect operational discipline, not pricing gimmicks. Capital allocation is conservative and shareholder-friendly. This is not a flashy industrial, but it compounds through competence. Boring, durable, and chronically underestimated.

Pitch Summary:
Thermo Fisher Scientific was added aggressively during the market volatility leading up to and following Liberation Day, as the shares sold off materially despite no meaningful change in the underlying business. Following its 2006 merger, Thermo has become an end-to-end platform for the life sciences industry, providing customers with everything required to develop and commercialize drugs. Its scale, reputation and reliability make it the preferred partner in an industry with strong secular growth. EdgePoint viewed the selloff as a clear opportunity to acquire a high-quality compounder at a bargain price created by panic selling rather than fundamentals. The position has since become a meaningful weight in the Global Portfolio.

BSD Analysis:
Thermo Fisher is the backbone of global life sciences, selling the tools, reagents, and services that research simply cannot function without. Its strength isn’t any single product — it’s the sheer breadth of the ecosystem. Once Thermo is embedded, customers rarely leave because switching disrupts workflows across labs and manufacturing. Cycles in biotech funding create noise, but core demand never disappears. Scale gives Thermo pricing power and acquisition firepower few can match. Margins hold up because consumables and services dominate the mix. The company constantly reinvests, widening the moat rather than milking it. This is life-sciences infrastructure, not a bet on drug discovery. Thermo wins regardless of which therapies succeed.

Pitch Summary:
Veeva Systems provides cloud-based software solutions for the life sciences industry. The stock struggled after third-quarter results, as management acknowledged competitive losses despite otherwise solid performance. The company has introduced a suite of AI products aimed at mitigating these losses and sees opportunities to win back customers given its broad product portfolio. With its deep expertise in life sciences and a comprehensive platform, we believe Veeva remains well positioned to continue capturing market share.

BSD Analysis:
Veeva’s moat is vertical dominance in life sciences workflows where compliance and validation create massive switching friction. Pricing power is earned through necessity, not seat counts. Growth is steady and durable, though capped by industry size. Transitioning away from Salesforce dependency adds execution risk but increases control. Competition is limited by regulatory burden and domain expertise. Margins remain strong due to subscription economics. The bull case is deeper platform penetration across R&D and commercial. The bear case is slower growth as saturation approaches. Veeva compounds by owning regulated workflows—and staying focused.

Pitch Summary:
Vistra is an integrated electricity and power generation company. Investors have been slightly disappointed in the lack of announced power purchase agreements (PPAs) across its generation fleet, with only one material deal disclosed to date. Investor sentiment and share performance have not been helped by a lack of disclosure surrounding this agreement, as well as by Vistra’s recent choppy results and an overall slight moderation in the AI-related enthusiasm that had helped lift the company’s valuation.

BSD Analysis:
Vistra’s moat is asset positioning and operational scale in competitive power markets. Earnings are highly sensitive to power prices, making results lumpy. Hedging smooths cash flow but caps upside. Regulatory and weather risks are constant. Capital allocation discipline determines shareholder returns more than growth. The bull case is tight power markets and disciplined buybacks. The bear case is price normalization compressing margins. Vistra is a cash-flow story masquerading as infrastructure. It works when markets stay tight.

Pitch Summary:
Royal Caribbean operates a global fleet of cruise ships. The stock lagged as initial fiscal year 2026 guidance was viewed as slightly disappointing, although we suspect a conservative estimate was put forth. Investor sentiment was further pressured by a competing cruise line’s announcement of a significant increase in its Caribbean supply, raising concerns about future pricing dynamics in the region.

BSD Analysis:
Royal Caribbean’s moat is scale, brand, and fleet quality in an industry with high barriers to entry. Demand has rebounded strongly, but leverage magnifies both upside and risk. Pricing power exists when itineraries and onboard experiences differentiate. Fuel, labor, and port costs remain volatile. Capex is unavoidable to keep ships competitive. The bull case is sustained demand and rapid deleveraging through cash flow. The bear case is macro slowdown or cost shocks hitting discretionary spend. Royal Caribbean is a high-beta leisure play that rewards timing more than patience.

Pitch Summary:
Axon Enterprise provides law enforcement and security technology solutions. Axon’s shares lagged after reporting softer than anticipated bookings growth. While near-term results were slightly disappointing, management reiterated confidence for a strong rebound in fourth-quarter bookings, which could position the company for another year of impressive revenue growth in 2026. Axon remains intensely focused on developing innovative solutions to address all aspects of law enforcement, and it has made significant recent strides in the emerging areas of drones and potentially transformational AI-enabled solutions.

BSD Analysis:
Axon’s moat is end-to-end integration across hardware, software, and evidence workflows for public safety. Switching costs are operational, legal, and political, which keeps churn extremely low. Subscription software has transformed earnings quality beyond hardware cycles. Budgets are predictable but not immune to politics. Execution risk lies in scaling internationally and expanding product scope without overreach. Competition exists, but displacement is rare once embedded. The bull case is continued platform expansion with recurring revenue dominance. The bear case is procurement delays or backlash over surveillance concerns. Axon compounds by becoming infrastructure for accountability.

Pitch Summary:
Roblox is an online game platform, primarily for kids and teens, with a large global base of daily users. Shares retreated as investors became concerned that the growth rate will likely slow after a remarkably strong 2025. We believe management has done a good job of diversifying away from a couple of “hits” to a whole range of “experiences” that should not only further expand the user base but also reduce the hit-driven nature of online games. We like the combination of a strong platform, robust margins and free cash flow generation.

BSD Analysis:
Roblox’s moat is user-generated content plus social graphs that keep creators and players locked in. Engagement depth is real, but monetization per user remains uneven and age-skewed. Infrastructure costs scale with usage, limiting margin expansion. Regulatory scrutiny around children is a persistent overhang. Aging the user base improves ARPU but risks diluting the core culture. Competition is less about games and more about attention. The bull case is better monetization as users age and creators professionalize. The bear case is engagement decay masked by headline user growth. Roblox is a platform that rewards patience—and punishes impatience.

Pitch Summary:
MongoDB, a provider of data base software, reacted positively to strong earnings results, with both an acceleration in sales of its flagship Atlas cloud data base product as well as strength in sales to customers who use the on-premises version of the product. Investor sentiment also improved following the hiring of a new CEO and the optimistic prospects for the software’s increasing relevancy in an AI world.

BSD Analysis:
MongoDB’s moat is developer mindshare paired with flexibility in unstructured data, not pure performance supremacy. Once embedded in applications, switching costs rise quickly, but price sensitivity shows up as customers optimize usage. Atlas improved monetization and stickiness, yet usage-based pricing makes growth volatile in downturns. Hyperscalers are constant threats, bundling alternatives and squeezing margins indirectly. Expansion depends on moving up the stack into mission-critical workloads. Execution matters more now than evangelism. The bull case is sustained developer adoption translating into enterprise standardization. The bear case is spend optimization and cloud-native competition compressing growth. MongoDB compounds only if it proves durability beyond early adopter enthusiasm.

Pitch Summary:
Ross Stores retails discounted brand-name apparel, footwear, and home fashions. The company delivered strong quarterly results, with comparable store sales and gross margins exceeding expectations. The stock reacted positively as first-year CEO Jim Conroy continues to focus on enhancing product assortment, store experience, and marketing. These initiatives have driven broad-based strength across the business and reinforcing momentum.

BSD Analysis:
Ross’s moat is sourcing scale and speed in off-price retail, monetizing everyone else’s inventory mistakes. Shoppers come for price and treasure-hunt value, not brand loyalty. The model works across cycles, but traffic still flexes with consumer confidence. Ross avoids fashion risk better than peers, yet execution lapses show up fast in inventory flow. Shrink and labor costs are the real operational threats, not e-commerce. Store growth remains a lever, but saturation eventually matters. The bull case is continued share gains as full-price retail struggles. The bear case is cost pressure eroding margins despite stable demand. Ross compounds by thriving in retail chaos—not by reinventing retail.

Pitch Summary:
Carpenter Technology produces specialty metals and alloys for a diversified set of industries, notably aerospace and defense. The stock performed well after a strong quarterly report that was led by growth in its aerospace engine maintenance, repair, and overhaul (MRO) end market, which continues to show durable momentum. Looking ahead, the company’s exposure to airframe original equipment manufacturer (OEM) production is poised to accelerate as two global jet manufacturers are set to ramp up build rates in 2026 after years of stagnation.

BSD Analysis:
Carpenter’s moat is metallurgical expertise in high-performance alloys used where failure is not an option. Aerospace and defense exposure creates long qualification cycles and customer stickiness. Pricing power exists, but only when capacity is tight and demand cooperates. Capital intensity makes execution discipline critical—mistakes linger in margins and balance sheets. Aerospace recovery has improved sentiment, but order timing remains uneven. Defense adds stability, yet growth is incremental, not explosive. The bull case is sustained aerospace build rates and mix improvement. The bear case is cycle rollover exposing operating leverage. Carpenter is a specialty industrial that behaves like a cyclical—because it is one.

Pitch Summary:
Teradyne is a semiconductor testing equipment supplier. Shares rose after the company reported very strong results on the back of strong demand for test equipment for artificial intelligence (AI)-related semiconductors. The company is also seeing potential market share gains that likewise could support revenue growth in 2026.

BSD Analysis:
Teradyne’s moat is engineering leadership in semiconductor test, where accuracy and uptime matter more than price. Customers rarely switch testers casually because qualification cycles are painful and production risk is real. That said, demand is brutally cyclical and tied to semiconductor capex moods. Exposure to memory, logic, and mobility amplifies earnings volatility. Robotics adds diversification, but it hasn’t yet dampened cycle risk meaningfully. Margins expand dramatically in upcycles and compress just as fast in downturns. The bull case is AI-driven chip complexity requiring more advanced testing. The bear case is prolonged capex digestion across fabs. Teradyne is a high-quality cyclical that rewards timing more than patience.