Investment Pitches

Pitch Summary:
The bear case rests on AI disruption, but we don’t believe the disruption narrative has relevance to recent profit warnings, which relate to Estonian car tax legislation. Traffic across our classifieds portfolio is growing and premium package adoption continues increasing. Baltic Classifieds benefits from high private seller volumes and strong local network effects. Unlike historical directory businesses, balance sheets are fortress-like with net cash and near-100% cash flow conversion. At current valuations, even modest growth would generate attractive returns.

BSD Analysis:
Baltic Classifieds’ moat is local dominance across small, linguistically fragmented markets where global platforms lack incentive to compete. Liquidity and brand trust matter more than technology sophistication. Pricing power is strong because sellers care about outcomes, not fees. Growth is steady but capped by population and GDP constraints. Operating leverage is meaningful once platforms reach maturity. The main risk is regulatory interference or taxation as platforms become quasi-utilities. Expansion outside core regions risks diluting focus and returns. The bull case is continued ARPU growth with minimal churn. Baltic Classifieds is a quiet monopoly in markets too small for giants—but perfect for incumbents.

Pitch Summary:
The stock trades at the lowest valuation since IPO at about 15x forward earnings, priced for stagnation despite a history of high single-digit growth. Beyond the general AI considerations, Auto Trader faces a strategic challenge around transforming the used car transaction experience. Deal Builder allows consumers to reserve cars, agree trade-ins, obtain finance quotes and arrange delivery on-platform. While the rollout has been clumsy and prompted dealer backlash, management believes the market has overreacted. Speed of sale headwinds are also seen as transient. Management has responded with aggressive buybacks and insider purchases.

BSD Analysis:
Auto Trader’s moat is near-total liquidity control of the UK car market—buyers and dealers have nowhere else to go at scale. Network effects are fully mature, which is why growth now comes from ARPU, not traffic. Pricing power is extraordinary and constrained mainly by politics, not competition. Cyclicality affects dealer sentiment and volumes, but never relevance. Product innovation matters at the margin; dominance does the heavy lifting. Capital requirements are minimal, making cash conversion exceptional. The risk is over-monetization provoking dealer backlash or regulatory attention. The bull case is steady ARPU expansion with almost no reinvestment needs. Auto Trader is a toll road that prints cash as long as cars change hands.

Pitch Summary:
Spirax is a high-quality UK engineering business with three divisions: Steam Solutions, Watson Marlow, and Electric Thermal Solutions. We believe multiple storms are clearing as we enter 2026, and markets are underestimating the financial impact of the approaching sunny skies. Watson Marlow profits are down over 40% from peak following a Covid-driven boom-bust cycle, but underlying growth remains strong and destocking is ending. In China, maintenance revenues continue to grow double digits despite project weakness, suggesting an inflection ahead. Semiconductor exposure within Electric Thermal Solutions also provides an AI-driven tailwind. We estimate Spirax could deliver earnings materially above consensus.

BSD Analysis:
Spirax sells steam and thermal management equipment — a sentence that sounds boring until you see the margins. Its products sit inside industrial processes where energy efficiency and uptime are non-negotiable. Once specified, switching is rare and risky. Exposure to energy efficiency regulation is a long-term tailwind. Cyclicality exists, but aftermarket and service revenue smooth results. Pricing power comes from engineering credibility, not volume. Capital allocation has been disciplined, favoring organic growth and bolt-ons. This is not an industrial cycle play. It’s efficiency infrastructure that compounds quietly.

Pitch Summary:
The big event was November's release of Europa Universalis V, the first major new version of a core franchise in quite some time. The critical reception was very positive and user reviews broadly favourable, though not without complaints. Steam user numbers have dropped off sharply from the launch peak. That said, the game's ambition and scope are widely recognised, and even critics seem to expect it will become a franchise-defining release once developers have responded to community feedback. It's worth remembering not to over-interpret early data for ambitious games with long shelf-lives. We expect a year of clean, high-margin growth in 2026. At roughly 7% free cash flow yield, with strong franchises, growing active users, and optionality on new franchise development or acquisitions, we see this as too cheap.

BSD Analysis:
Paradox runs a niche gaming empire built on depth, not mass-market appeal. Its strategy games create communities that play for years, not weeks. DLC-driven monetization extends lifecycles without reinventing the core product. Revenue is lumpy, but engagement is unusually sticky. Development risk exists because quality matters more than release cadence. The fan base forgives delays but not shallow design. Margins improve when execution hits. This is not blockbuster gaming. It’s intellectual property compounding through obsession and longevity.

Pitch Summary:
As anticipated, the November interims showed continued strong volume performance – H1 cross border volume was up 26% in constant currency, vs. +19% in the same period last year. The market's reaction was surprising to us: the stock fell despite management delivering exactly what they said they would, bringing margins down toward their 13-16% target range through increased investment in hiring and marketing. The hiring pace was admittedly ahead of previous guidance, which investors can read as either a worrying sign for future profitability or evidence of management confidence in their growth initiatives. We lean toward the latter interpretation. The Platform business continues to impress. Volumes reached just over 5% of the total in H1, up from around 4% for the full prior year. We estimate Platform volumes are growing at roughly 70% annualised, substantially driven by the Morgan Stanley partnership. The manager views Wise as a structurally advantaged payments platform with accelerating growth and improving monetisation from Platform volumes. Investment-driven margin compression is seen as value-accretive rather than concerning. At a mid-single-digit free cash flow yield and growing share of wallet, Wise offers compelling long-term upside.

BSD Analysis:
Wise is attacking global payments the hard way: by actually lowering costs instead of hiding fees. Its transparent pricing resonates with consumers and SMEs moving money across borders. Scale improves unit economics because FX volume compounds quietly. Growth is driven by account adoption rather than one-off transfers. Competition from banks exists, but legacy systems keep banks uncompetitive on price. Margins expand as infrastructure is leveraged over more volume. Regulation is a moat, not a barrier, once licensed. This is not speculative fintech. It’s payments infrastructure monetizing inefficiency.

Pitch Summary:
Global Atomic (GLO) remains the only greenfield uranium mine under construction globally. Recent political developments in Niger have put a temporary pause on further construction progress at the Dasa uranium mine. The new Nigerien government is completing a review of the mining sector and is expected to eventually grant the Dasa mine in a new permit.

BSD Analysis:
Global Atomic combines uranium exposure with zinc cash flow, giving it a hybrid profile uncommon in the sector. The Dasa uranium project positions the company as a future supplier into a tightening nuclear fuel market. Execution risk exists, particularly around permitting, financing, and construction. That said, uranium’s structural undersupply strengthens the long-term thesis. The zinc business provides partial funding support and downside mitigation. Jurisdictional risk in Niger is not trivial, but asset quality is compelling. This is a leveraged uranium development story with some built-in ballast.

Pitch Summary:
Lithium Argentina, as a stand-alone company, is in our view one of the only companies in the lithium sector that is currently investable. We have taken some minor profits on the position this quarter. Given the standstill period expiration on the Argentinian national elections (2026), the standstill will remain in place through 2026. We believe this is likely to be a long-term holding.

BSD Analysis:
Lithium Argentina offers direct exposure to South American brine assets, positioning it squarely in the global EV supply chain. The long-term lithium demand story remains intact despite near-term price volatility. Brine operations offer cost advantages but require patience and operational discipline. Project ramp-ups and partner execution matter more than spot prices in the near term. Political and regulatory noise is part of the Argentine package, but world-class resources keep capital interested. If lithium prices normalize, operating leverage is significant. This is a long-duration EV materials bet with cyclical turbulence along the way.

Pitch Summary:
Lundin Mining was one of the largest contributors to portfolio performance in 2025. We believe strongly that Lundin Mining has the team and assets to become one of the world’s largest copper miners over the course of the next ten years. The company benefits from a portfolio of high-quality, long-life assets and disciplined capital allocation. We recently published a two-part report on the company and interviewed CEO Jack Lundin, reinforcing our conviction in management quality and strategic direction. The company is positioned to benefit from structurally tight copper markets driven by supply constraints and rising electrification demand.

BSD Analysis:
Lundin Mining is a high-quality base-metals producer with a portfolio skewed toward copper, zinc, and nickel — exactly where long-term supply constraints are forming. The company benefits from the Lundin family’s disciplined operating culture and capital allocation mindset. Its assets are diversified geographically, reducing single-jurisdiction risk while preserving scale advantages. Copper exposure gives Lundin leverage to electrification and grid expansion trends. Near-term results can swing with metal prices, but the balance sheet remains solid. Growth projects are selective rather than empire-building. This is a “grown-up” mining company built to compound through cycles, not chase them.

Pitch Summary:
Since late 2023, our view of Midnight Sun (MMA) has increased significantly as the team has continued to demonstrate skill in exploration and the ability to think creatively about how to build out the company. At a time when juniors need to seek large partners to help fund drilling, Midnight Sun has consistently found ways to leverage its position in the Domes district to get others to fund the work. The team has been aggressively developing a portfolio of targets, providing multiple ways to increase shareholder value. Although developments in the region have been slower than expected, validation of the Domes District continues. When you add in the potential for the Lumwana copper mine to become the focus of the region, it seems highly likely that exploration companies in the district will be of increasing interest and value.

BSD Analysis:
Midnight Sun is an exploration-stage copper company focused on Zambia’s prolific copper belt. The thesis is pure discovery upside in a region with world-class geology and existing infrastructure. Exploration success, not commodity prices, will drive valuation changes. Funding risk and dilution are inherent at this stage. The company’s land position and geological targeting provide meaningful optionality. Timelines are uncertain, and results will be lumpy. This is a high-risk, high-reward exploration bet tied to copper’s long-term scarcity.

Pitch Summary:
Equinor provides ballast within the portfolio through its scale, diversification, and net-cash balance sheet. Its exposure is skewed toward late-cycle offshore supply that has already cleared the sanctioning hurdle. Near-term volumes are largely embedded in forward plans, reducing reliance on fresh investment decisions. The company’s balance-sheet strength and infrastructure-led developments position it to thrive even in a volatile and range-bound oil market.

BSD Analysis:
Equinor is a state-backed energy major balancing traditional hydrocarbons with aggressive investment in renewables and low-carbon solutions. Its offshore expertise underpins some of the lowest-cost, lowest-emissions oil and gas production globally. Cash flow from legacy assets funds dividends, buybacks, and energy-transition projects. Returns on renewables are lower, but strategic positioning matters over the long term. Norway’s fiscal regime is stable, though the state’s influence shapes capital allocation. Equinor offers resilience rather than torque. This is a conservative way to stay invested in global energy.

Pitch Summary:
Harbour Energy’s near-term uplift in free cash flow is driven less by oil prices than by balance-sheet and portfolio decisions, most notably the Waldorf and LLOG transactions. These transactions transform the company’s cash generation across a $55–70/bbl Brent range. Under such conditions, we expect incremental free cash flow of $100–200 million in 2026, effectively doubling cumulative generation relative to the standalone base. In a surplus market punctuated by episodic geopolitical spikes, managerial skill rather than commodity beta matters.

BSD Analysis:
Harbour Energy is a European-focused upstream producer with assets across the UK North Sea and international gas markets. It generates strong free cash flow at current commodity prices, supporting dividends and buybacks. Political risk in the UK remains the biggest overhang, particularly around windfall taxation. Operationally, Harbour runs a lean, disciplined portfolio with declining capex needs. Gas exposure adds defensiveness relative to oil-heavy peers. The equity trades with a heavy policy discount. This is a cash-return story first and a growth story second.

Pitch Summary:
Vår Energi is the most direct expression of our preference for producers whose economics are already proven at mid-cycle prices. Its cash flow profile is no longer prospective but operational, with the Johan Castberg and Balder X fields transitioning from promise to production. We estimate that in a $55 to $70 price range Vår Energi has the highest free-cash-flow yield in the European E&P space, with yields as high as 18%. The company’s ability to modulate spending while preserving distributions leaves it exposed to volatility, but not hostage to it.

BSD Analysis:
Vår Energi is a Norwegian E&P with a portfolio focused on long-life, low-decline assets on the continental shelf. Its production profile offers strong cash flow visibility and relatively low operating risk. Capital discipline and dividends anchor the investment case rather than aggressive growth. Exposure to gas pricing provides upside amid Europe’s ongoing energy-security concerns. The regulatory framework in Norway is stable and supportive of offshore investment. Balance-sheet leverage is controlled. Vår Energi is a yield-backed energy name with modest growth optionality.

Pitch Summary:
G Mining Ventures (GMIN) was the second-largest contributor to 2025 performance. We exited the position in October at an average price of CAD 32, crystallizing a 184% return over the year and contributing 10.1% to the portfolio. By the time we exited, the investment case in GMIN had changed into a leveraged expression of the gold price itself. A log-value regression of GMIN versus spot gold produced a beta of roughly 1.8 earlier in the year and 3.4 later in the year. Fundamentals pointed in the same direction, as GMIN is approaching construction at Oko West, a phase where equities are often discounted due to execution risk. We would welcome a second opportunity to own the company at a price that reflects construction risk rather than spot enthusiasm.

BSD Analysis:
G Mining is a development-stage gold company led by a management team with a strong track record of building and operating mines. The Tocantinzinho project stands out for its scale, grade, and relatively clean permitting profile. Value hinges on construction execution, cost control, and schedule adherence. If delivered as planned, G Mining transitions quickly from developer to meaningful producer. Jurisdictional risk exists but is manageable relative to peers. The upside comes from de-risking milestones rather than gold price alone. This is a classic “build-it-right” mining opportunity.

Pitch Summary:
The portfolio’s exposure to gold has narrowed materially over the course of 2025 and today consists of a single 10% position in Equinox Gold (EQX). EQX finished the year at a new all-time high and was the portfolio’s strongest contributor in 2025, rising 179% from December 31st, 2024, to December 31st, 2025, and accounted for 11.8% of total portfolio returns. We revisited our valuation of EQX in November and arrived at an estimate of $20–22 per share at a gold price of $3,675 per ounce. Operational momentum from the second half of the year continues, and balance-sheet deleveraging, accelerated by proceeds from the sale of Brazilian assets, has meaningfully altered the company’s financial profile. At an assumed average gold price of $4,000 per ounce, we estimate free cash flow of approximately $1.5 billion, implying a 13.1% yield on a debt-free balance sheet. Under those conditions, we believe capital returns in the form of buybacks or dividends are plausible rather than aspirational.

BSD Analysis:
Equinox is a multi-asset gold producer built for scale, with mines across the Americas providing geographic diversification. Execution and cost control have historically been uneven, making operational delivery the core debate. When gold prices cooperate, Equinox’s production base provides meaningful free-cash-flow leverage. Balance-sheet management has improved, reducing downside risk versus prior cycles. The pipeline offers optional growth, but capex discipline will determine value creation. This is not a “sleep at night” gold name — it’s torque. Investors are paid for volatility if management executes.

Pitch Summary:
Madrigal Pharmaceuticals was a relative contributor as the company continued to establish leadership in the treatment of metabolic dysfunction-associated steatohepatitis (MASH). The firm has seen very strong sales of Rezdiffra, the first FDA-approved medication for MASH that targets liver fat accumulation and inflammation. Sentiment around the drug has been positive, supported by strong physician adoption and favorable payer reception trends. These early commercial indicators reinforced confidence in Madrigal’s growth potential.

BSD Analysis:
Madrigal is a pure-play bet on NASH treatment finally becoming real medicine rather than perpetual disappointment. Its lead asset targets a massive unmet need with no approved alternatives. Clinical data credibility is the core asset here. Commercial execution and reimbursement will define the next phase. Investors price binary outcomes aggressively. If adoption materializes, revenue ramps fast. If not, downside is obvious. This is biotech asymmetry, not diversification. Science decides everything.

Pitch Summary:
Relative performance benefited from Eli Lilly, which reported strong third-quarter results driven by accelerating sales of its blockbuster GLP-1 weight loss drugs, Mounjaro and Zepbound. The company also has several promising late-stage pipeline assets, including orforglipron, a once-daily oral GLP-1 therapy, and retatrutide, which targets higher levels of weight loss and could complement existing products. Lilly reached an agreement with the U.S. government on pricing and access for GLP-1 drugs under Medicare and Medicaid, which may further expand market potential. These factors reinforced confidence in Lilly’s long-term growth trajectory.

BSD Analysis:
Lilly is executing one of the strongest product cycles in modern pharma history. Obesity and diabetes therapies are redefining standard of care, not just adding incremental benefit. Demand exceeds supply, shifting risk from science to manufacturing execution. Pricing power reflects outcomes, not marketing. The broader pipeline reduces single-drug dependency risk. Political noise persists but hasn’t slowed adoption. Investors debate peak sales prematurely. Lilly keeps expanding indications and capacity. This is pharma dominance backed by real-world results.

Pitch Summary:
Eaton was a relative detractor after strong performance earlier in the year. The stock declined in the fourth quarter as exceptional future orders growth was offset by production bottlenecks that resulted in slower-than-expected revenue growth. Investors also expressed concern about the impact of near-term capital spending on margins. We view these issues as short-term in nature and continue to believe in Eaton’s multi-year market opportunity as data center capacity expands rapidly to support artificial intelligence workloads.

BSD Analysis:
Eaton is an electrification powerhouse sitting directly in the path of grid stress, data centers, and industrial automation. Its products are small-ticket but mission-critical, enabling consistent pricing power. Data center and power quality demand are secular, not cyclical. M&A discipline has improved earnings quality materially. Investors often treat Eaton like a generic industrial. That misses how regulation and reliability drive demand. Margins benefit from engineering depth rather than volume chasing. Electrification is bottlenecked, and Eaton sells the bottleneck. This is industrial growth with infrastructure characteristics.

Pitch Summary:
Oracle, a provider of cloud infrastructure, was a relative detractor amid volatility in AI-related stocks. Oracle has emerged as a leading player in the AI market, supported by its strong and growing position in the hyperscale market as well as close relationships with leading AI partners. The company’s cloud business has signed several multibillion-dollar contracts, leading to a large increase in remaining performance obligations (RPOs), which represent expected future revenues. Despite strong financial performance, the stock declined as investors grew cautious about Oracle’s ability to fund the ambitious infrastructure buildout required to service these contracts and about potential customer concentration within RPOs. We believe these concerns are overstated given Oracle’s solid balance sheet, strong operating cash flow and multiple avenues to fund growth, leaving the company well positioned to benefit from the ongoing AI capacity buildout.

BSD Analysis:
Oracle has quietly reinvented itself from legacy database vendor into a credible enterprise cloud and infrastructure player. OCI’s strength lies in performance-heavy workloads where latency, cost, and reliability actually matter. Long-term contracts give Oracle revenue visibility most cloud peers lack. The legacy database franchise still prints cash and funds growth without balance-sheet stress. Investors remain anchored to “old tech” narratives that no longer fit reality. AI workloads increasingly favor Oracle’s architecture, not just hyperscaler default choices. Margin expansion is coming from mix, not cost cutting. Oracle doesn’t need to win the cloud — just the right workloads. This is incumbency weaponized, not obsolescence.

Pitch Summary:
We had a good year in 2025, however we were severely hamstrung by InteractiveBrokers’ move to limit Americans from buying small Hong Kong equities. As a result, international clients of mine, who comprise the vast bulk (94%) of my AUM, experienced a return of 83.11%, as I continued buying small companies in the world’s cheapest developed market throughout late 2024 and 2025. The returns chart you see above will be permanently marred by IBKR’s asinine stunt, as the Comus account is US-based and they cost our Americans a good chunk of change. For whatever reason, as I mentioned in the 2024 letter, they deemed Americans unable to separate legitimate company from scam stock in that market while allowing foreigners to continue buying whatever they liked. It appeared they had received many complaints through the 2021-24 period of HK stock losses and as a result, restricted investors from profiting from the likely and predictable gains to those wise enough to buy when fear was at its peak. Now that global investors deem both HK and China investible again, returns in many stocks there have been explosive and we had our best year to date. IBKR made another change this year, and one that makes some sense. They limited the annual % of AUM fee that advisors can charge to 2%, so as you can see in the table above, it provides a small but meaningful benefit to clients as they go from 2.52% to 2% annual advisory fees.

BSD Analysis:
Interactive Brokers runs a brokerage like a software company. Low costs and automation attract active traders globally. Higher rates boost net interest income. Volatility increases engagement. The platform scales with minimal incremental cost. Investors underestimate operating leverage. Competition struggles to match pricing. This is financial infrastructure for traders. Efficiency wins.