Investment Pitches

Pitch Summary:
Tractor Supply detracted from performance despite +7% sales growth and +6% operating income growth. Management completed several long-term infrastructure investments. Approximately 80% of sales come from loyalty program members. We expect accelerating earnings growth in 2026 as investment spending laps. Normalization of customer spending patterns should further support results.

BSD Analysis:
Tractor Supply owns the rural and “life out here” consumer, a customer segment that’s more resilient and less trend-chasing than suburban retail. The moat is convenience, assortment, and a store network built exactly where competitors don’t want to be. Consumables and essentials drive repeat trips, supporting steady comps even when big-ticket slows. Private label and mix help protect margins. Investors worry about rural softness, but the category is tied to pets, hobby farming, and maintenance—sticky behaviors. Store expansion and distribution efficiency provide long-run growth levers. When consumers trade down, Tractor Supply often benefits because it sells practical value. This is a defensive retailer with real compounding characteristics.

Pitch Summary:
United Rentals detracted from performance as equipment demand softened due to lower non-residential construction. Revenues still grew +6%, driven by mega-projects and infrastructure spending. The Company continues to invest heavily in new equipment. Leading indicators point to a recovery in construction activity. We believe United Rentals is positioned to benefit from an eventual cyclical rebound.

BSD Analysis:
United Rentals is a dominant equipment rental platform benefiting from a simple truth: owning equipment is expensive and inefficient for most contractors. Scale gives URI utilization advantages, purchasing power, and a network effect in fleet optimization. Infrastructure spending and industrial reshoring create multi-year demand support. Cycles still matter, but rental models hold up better than equipment manufacturers in downturns. Free cash flow is substantial, enabling aggressive buybacks when the stock gets hit. The market treats it like a pure cyclical, yet execution has made it a cash-flow compounder across cycles. If construction activity normalizes, earnings snap back quickly because fixed-cost leverage is real. This is industrial muscle with capital discipline.

Pitch Summary:
Although Motorola grew revenues +8% and earnings per share +9%, the stock was a poor performer in 2025. Organic orders have accelerated to double-digits in both products and services. The Company expects growth to accelerate into 2026 despite near-term headwinds. As the stock sold off, it traded at more attractive forward valuation multiples. Accordingly, we added to positions.

BSD Analysis:
Motorola Solutions is the unsexy backbone of public safety communications, and unsexy is exactly what makes it resilient. Governments and enterprises buy reliability, uptime, and integration—not cheap gadgets. The shift toward software and services increases recurring revenue and expands margins. Switching costs are brutal because these systems are embedded across agencies and workflows. Budget cycles can delay orders, but they rarely cancel the need. Investors underestimate the “mission-critical tax” Motorola collects through long-term relationships. As public safety modernizes with analytics and cloud, Motorola has a natural upsell path. This is a quiet infrastructure monopoly with sticky cash flows.

Pitch Summary:
Meta Platforms was a leading detractor despite reporting +26% revenue growth. Earnings per share grew +20% as the Company increased spending on long-term AI ambitions. Daily active users rose +8% year-over-year and users spent +5% more time on its platforms. Meta’s network of over 3.5 billion daily users generates enormous volumes of valuable advertiser data. The Company has a proven track record of AI investments yielding exceptional returns on capital, which we expect to continue.

BSD Analysis:
Meta is an advertising cash machine that turned “mature social media” into a profit re-acceleration story through ruthless cost discipline. Engagement across apps remains enormous, and ads monetize attention with best-in-class targeting and measurement. Reels is no longer a margin destroyer; it’s becoming a monetization engine. AI improves ad performance, which improves pricing power—simple and brutal. The metaverse spend is still controversial, but the core business funds it comfortably. Regulatory pressure is constant, yet users don’t leave at scale. If ad cycles normalize upward, Meta’s operating leverage is nasty. This is platform dominance wearing a controversy tax.

Pitch Summary:
Edwards Lifesciences also contributed to performance during the quarter. The Company presented favorable seven-year data for its transcatheter aortic valves, while competitive valves exited several key markets. Edwards can drive double-digit earnings growth over the next few years as its long-term data evolves standards of care. Minimally invasive alternatives are increasingly preferred over open-heart surgery. This positions Edwards for sustained procedure growth and share gains.

BSD Analysis:
Edwards is a structural winner in heart valve therapy, a category with aging-driven demand and strong clinical moats. The TAVR franchise is mature, but procedure volumes still have runway as adoption expands globally. Competitive pressure is real, yet physician preference and clinical outcomes keep Edwards relevant. The pipeline in structural heart adds growth optionality beyond the core valve business. Hospitals don’t switch vendors lightly in life-or-death procedures, which supports stickiness. Investors punish any growth wobble because the stock has worn a premium for years. If new products scale, multiple expansion can return quickly. This is high-quality medtech with a pipeline-shaped catalyst map.

Pitch Summary:
Old Dominion Freight Line contributed to performance as investors rotated into more economically sensitive sectors late in the year. Demand expectations improved around a rebound in industrial activity, a core source of freight demand. We added to positions before the rally as we expect the Company will continue to manage its capacity exceptionally well. Old Dominion keeps costs under control while taking price as it provides dependable service. Over time, we expect the market to reward best-in-class operators like Old Dominion regardless of the macro backdrop.

BSD Analysis:
Old Dominion is the gold standard in LTL freight, and in trucking, quality is the moat. Its network density and service levels translate into pricing power and superior operating ratios. Freight cycles are brutal, yet ODFL typically preserves margins better than peers because it doesn’t chase junk volume. When the cycle turns, it takes share because customers value reliability when supply chains tighten. The company runs a disciplined capex and equipment strategy that supports uptime and cost control. Investors can get bored during downturns, but that boredom is often the entry point. Long-term, LTL rationalization and e-commerce complexity favor best-in-class operators. ODFL is a compounder disguised as a cyclical.

Pitch Summary:
Apple contributed to performance as adjusted earnings per share grew +13%, driven by +15% revenue growth in its services business. Services generated over $100 billion in revenue over the past 12 months and accelerated versus the prior quarter. The Company guided to strong double-digit revenue growth in its holiday quarter, driven by double-digit growth in iPhone revenues. Apple experienced strong demand after launching several new models in the previous quarter. Apple’s multi-decade consistency in executing on hardware and software upgrades, along with increasingly proprietary silicon content, continues to drive adoption and trade-up.

BSD Analysis:
Apple is a consumer tech company that behaves like a luxury brand with a software annuity attached. Hardware cycles create noise, but the installed base is the real asset: it drives services, upgrades, and ecosystem lock-in. Pricing power remains absurd because Apple sells trust and status, not specs. Services growth improves margins and dampens device volatility. AI integration is a question mark, but Apple’s advantage is distribution—every feature ships to a massive user base overnight. Regulatory and App Store pressure are real risks, yet Apple has navigated them with minimal damage so far. Investors obsess over “next product,” but Apple wins by deepening the ecosystem. This is compounding through loyalty, not innovation theater.

Pitch Summary:
Taiwan Semiconductor Manufacturing also contributed to performance during the quarter. Broadcom's and Nvidia's CEOs have referred to the Company as a "precious source" and "the pride of the world" in silicon manufacturing, as the Company continues to execute flawlessly on its leading-edge node progression and capacity build-out. Its advanced nodes allow accelerator designers greater flexibility to increase performance while limiting power requirements. High-performance computing revenues have doubled to more than $65 billion over the past six quarters, more than triple since late 2021. The Company continues to demonstrate pricing power, which should help drive excellent returns on capital as capacity expands.

BSD Analysis:
TSMC is the critical bottleneck in advanced chips, and bottlenecks get paid. Its manufacturing leadership is not just scale—it’s yield, reliability, and trust built over decades. AI and high-performance compute are increasing silicon intensity, which pulls demand toward leading nodes where TSMC dominates. Capex is enormous, yet competitors can’t close the gap without burning money for years. Geopolitics is the headline risk, but it also makes TSMC strategically indispensable to multiple governments. Margins ebb with cycles, but the competitive position rarely changes. Customers design their roadmaps around TSMC’s capabilities, not the other way around. This is a global monopoly with a geopolitical discount stapled on.

Pitch Summary:
Alphabet continued to make significant contributions to performance during the quarter. The Company's Google subsidiary reported that search revenues accelerated to +15% growth compared to a year ago. Google user query growth related to AI Overviews, along with automated ad creative services, helped drive this revenue growth. The Google Cloud segment revenue and backlog growth also accelerated, driven by AI workloads. Google Cloud processes 1.3 quadrillion AI tokens per month, more than double from just a few quarters ago and many multiples more than some of its largest cloud competitors. Alphabet's long history of developing proprietary IT hardware and software will continue to help compound its profitability leadership during the AI era.

BSD Analysis:
Alphabet still owns the most valuable digital real estate on the planet, and it keeps monetizing attention better than anyone. Search remains a cash engine even as AI changes interfaces, because intent is still intent. YouTube is increasingly a full-stack media business with advertising and subscriptions reinforcing each other. Cloud continues to mature, and margin expansion is the underappreciated lever. AI spend is massive, but Alphabet has the data and distribution to make that spend productive. Investors worry about disruption, yet Alphabet keeps adapting faster than the narrative admits. Regulatory pressure is a persistent overhang, not a death sentence. This is a cash machine funding its own reinvention.

Pitch Summary:
We initiated a new position during the quarter in Chubb (CB), long a global leader in the property and casualty insurance industry. Much of the business may be characterized as “specialty” or “non-standard,” which is the primary attraction for us. While Chubb offers more standard property and casualty insurance across both corporate and individual business segments, it leans heavily into areas such as risk engineering, director and officer insurance, or unique areas such as energy or aviation. The Company’s selection of attractive global insurance business lines, combined with impressive strength in underwriting and a reputation for excellent client service, supports an impressive business model characterized by steady premium growth and improving profitability. From an insurance underwriting perspective, the Company stands out as an outstanding insurance underwriter – truly, best-in-class. Chubb has a long history of accurately forecasting and pricing risk, enabling the company to earn an attractive and consistently improving return from assuming liability for clients. In addition, income from its investment portfolio meaningfully augments underwriting profits and supports double-digit earnings growth over time.

BSD Analysis:
Chubb is the insurance company investors buy when they want adult supervision: underwriting discipline, pricing power, and predictable execution. In a world of climate volatility, discipline matters more than growth narratives. Chubb’s ability to reprice risk and exit unattractive business lines protects returns. The investment portfolio benefits from higher yields, supporting earnings resilience. Global diversification helps smooth regional catastrophe shocks. Investors sometimes forget insurance is a cycle, and Chubb is built to win the cycle, not chase market share. When the market gets sloppy, Chubb gets paid. This is defensive compounding with real teeth.

Pitch Summary:
We have followed Amazon for many years – and owned its stock in the past. The stock has lagged the broader indices for the past five years, and valuation multiples have reverted lower despite cash flow returns on investment rebounding to near-record levels. Current management is more focused on managing capacity and costs after prior management spent several years aggressively building out both the e-commerce and AWS footprints. For example, the Company's EV/EBITDA multiple is trading around 13X for 2026, well below its pre-COVID-19 levels of 25X and the 10-year average of 17X. Meanwhile, cash flow returns have rebounded to more than 20%, driven by record margins. The current management team has done well to grow the businesses into their current overcapacity and better match that capacity to demand. We expect Amazon should be able to grow at double-digit rates, driven by increasing penetration of e-commerce and infrastructure as a service (IaaS), while expanding margins as they better manage capacity to demand.

BSD Analysis:
Amazon is no longer “just e-commerce”—it’s a cloud, logistics, and advertising empire that keeps widening the moat. AWS remains the profit engine, and AI workloads extend its relevance even as cloud spending cycles fluctuate. Retail margins are improving as fulfillment gets regionalized and efficiency compounds. Advertising is the stealth monster: high-margin growth tied to intent and commerce data no one else matches at scale. Capex is huge, but it funds infrastructure competitors can’t replicate. Investors argue about valuation every year and then watch earnings outgrow the debate. Regulatory noise is real, but scale and consumer utility are hard to unwind. Amazon is still one of the few platforms that can grow, defend, and reinvest simultaneously.

Pitch Summary:
Broadmedia (+21%), in which AVI announced its intention to acquire an additional c.11% of shares via tender offer. The team continues to allocate capital received following completion of the transaction with the Fidelity Japan Trust to both new and longstanding portfolio names. We are excited by the opportunity to utilise additional firepower following the merger to enhance our constructive engagement strategy with portfolio companies. AJOT is a major shareholder involved in AVI’s constructive engagement strategy, building meaningful stakes to unlock value by driving improvements in business operations alongside traditional themes of capital efficiency, governance, and investor relations.

BSD Analysis:
Broadmedia is a Japanese small-cap media/IT hybrid where the story is less about headlines and more about execution in niche segments. The company’s mix can look messy, but messy portfolios sometimes hide underrated cash-flow pockets. If management keeps focusing on higher-return verticals and cutting low-quality revenue, earnings quality can improve materially. The market tends to punish complexity with a permanent discount. That discount can persist—until it doesn’t, usually after a couple clean quarters. Optionality exists if content, education, or enterprise services hit a product-market fit inflection. The risk is that capital allocation drifts and the mix stays noisy. This is a “prove it” stock—cheap because trust is not free.

Pitch Summary:
Synchro Food (3963) – AVI Head of Japan Research appointed as outside director at EGM. Synchro Food was the largest contributor over the month, adding +84bps to performance as its share price rose by +22%. Synchro Food operates a service matching platform for restaurants in Japan, with much of its sales coming from job listings. The company operates “Inshokuten.com” which provides an end-to-end business platform for restaurants, including supplier search, accountant search, interior design, food truck support and bulk ordering services. The EGM requested by AVI was held by Synchro Food on December 26th 2025, having initially received our request on October 2nd 2025. The results of the EGM were highly positive, with AVI’s Head of Japan Research, Kaz Sakai, successfully appointed to the board as an independent director. Additionally, internal directors Morita and Nakagawa were both dismissed, with both a new CEO and Chairman stepping up consequently. Added to the portfolio in March 2025, the company accounted for 5.5% of AJOT’s NAV at year-end. We see significant upside through our constructive engagement and to month-end, our investment has generated an ROI of +28% for an IRR of +78% (in JPY).

BSD Analysis:
Synchro Food is a niche platform tied to Japan’s restaurant and food-service ecosystem, where digitization is still playing catch-up. Marketplace and SaaS-like models work well in fragmented industries because they reduce search costs and operational friction. Growth depends on restaurant health, but tools that improve efficiency can actually become more valuable during weak cycles. The real edge is network effects: more suppliers and more venues create better matching and stickier workflows. Investors often underestimate how sticky “back-office” adoption can be once it becomes routine. Japan’s slow-moving corporate culture can frustrate, but it also makes churn lower once adoption happens. If labor shortages persist, software that reduces staffing strain becomes a must-have, not a nice-to-have. This is a quiet digitization story in an overlooked market.

Pitch Summary:
Temenos is a Switzerland-based provider of core banking software, supplying platforms that manage banks’ core systems of record. The company benefits from a long runway as banks shift toward third-party core systems, with most global banking infrastructure still running on legacy technology. During the fourth quarter, operating performance remained strong despite an unexpected leadership transition, with accelerating subscription and SaaS revenue, expanding margins and an upgrade to full-year guidance. Management emphasized that strategy and long-term roadmap remain unchanged. As investors gained confidence that the leadership change would not disrupt operational momentum, the stock price responded positively.

BSD Analysis:
Temenos sells core banking software, which is the deepest, most painful layer of a bank’s tech stack—and that pain is exactly why the opportunity persists. Banks modernize slowly, but once they commit, the projects are large, sticky, and multi-year. Revenue can be lumpy, yet the installed base provides durability and services pull-through. Competition exists, but switching core systems is like changing the engine mid-flight, so incumbency matters. Execution and perception have been the overhang, not the relevance of the product. If management tightens delivery and credibility, multiples can recover quickly because the TAM isn’t going away. As banks pursue cloud-native architectures, Temenos is positioned to monetize the transition. This is a “fix the narrative, unlock the value” setup.

Pitch Summary:
Hub24 is a leading independent wealth-management platform benefiting from a structural shift away from bank-owned platforms toward open-architecture solutions. The company administers only about 9% of custodial funds in a large and growing market, leaving meaningful scope for share gains. High margins and strong profitability reflect its software-led, recurring revenue model. Hub24 has captured more than half of industry net inflows in recent years. We believe the company is positioned to compound earnings as platform consolidation continues.

BSD Analysis:
Hub24 is a platform business riding the structural shift of Australian wealth management toward transparent, fee-based advice and modern administration. Platforms win because they become the system of record, and systems of record don’t get replaced lightly. Net inflows are the scoreboard, and Hub24 has been taking share by offering better tech and better adviser experience. Scale improves unit economics, turning growth into margin expansion over time. Regulation is a risk, but it also pushes the industry toward fewer, more compliant platforms. Investors worry about market cycles, yet platform fees are resilient relative to active manager revenue. If asset values rise, Hub gets paid more without doing more work—pure leverage. This is a financial infrastructure name that the market still treats like a “fintech.”

Pitch Summary:
Xero detracted during the quarter due to company-specific execution concerns and AI-related sentiment. The announced acquisition of Melio raised questions around capital allocation and timing of benefits, but we believe it has the potential to strengthen Xero’s platform by embedding payments directly into core accounting workflows. At the same time, concerns that AI-enabled tools could replicate core accounting functionality have driven valuation pressure. We believe this risk is overstated relative to how customers actually use Xero. We remain confident in the company’s competitive position, recurring revenue model and ability to expand monetization over time.

BSD Analysis:
Xero is the accounting platform that owns the messy, recurring workflow of small businesses, which is exactly where stickiness lives. Once a business runs payroll, invoicing, and reconciliation through Xero, switching becomes a pain tax nobody wants to pay. The company’s expansion outside its core markets improves the long-term runway, even if it drags margins near term. Pricing power is underappreciated because compliance-driven software is not discretionary. The partner ecosystem with accountants and bookkeepers acts like a distribution moat. Investors sometimes treat it like generic SaaS, but the workflow depth and retention look more infrastructure-like. As automation and AI creep into bookkeeping, Xero can expand value without massive customer acquisition costs. This is a compounding machine—just not the loud kind.

Pitch Summary:
Shopify is a Canadian company with a vision of making commerce better for everyone. The company is the leading e-commerce enablement platform outside of China and provides merchants with tools to manage and scale their businesses. Shopify has benefited from the long-term shift to e-commerce and continues to take share through innovation and an expanding product suite that includes payments, marketing, and logistics. The company has improved profitability meaningfully as it has optimized its cost structure and focused on higher-return initiatives. We believe Shopify remains well positioned to compound as merchants increasingly adopt integrated commerce solutions.

BSD Analysis:
Shopify is the operating system for merchants who don’t want to hand their destiny to Amazon, and that mission keeps getting more relevant. The platform wins because it’s not just storefronts—it’s payments, fulfillment partnerships, marketing, and workflow embedded in daily operations. Cycles hit GMV, but the subscription and attach-rate dynamics create resilience. Shopify’s best trick is letting merchants scale without switching platforms, which quietly builds massive lock-in. Investors debate margins, yet Shopify has multiple levers: take-rate, fintech attach, and enterprise penetration. Competition is real, but Shopify’s ecosystem is now too large to dismiss as “just a tool.” If consumer spending stabilizes, Shopify’s operating leverage shows up fast. This is a long-duration commerce infrastructure asset with volatility you can trade around.

Pitch Summary:
Ireland-domiciled Flutter Entertainment shares declined amid regulatory headlines, bettor-friendly sports results that temporarily weighed on sportsbook economics, and investor concerns that prediction markets could disrupt the company’s core online sportsbook business. We believe the fears of prediction markets materially overstate the implications for Flutter’s core business. If prediction markets remain niche, Flutter’s dominant sportsbook franchise, scale advantages and product depth should continue to drive market share gains. If prediction markets gain broader adoption, Flutter is leaning in with its own offering, leveraging its brand, technology and regulatory expertise to compete effectively. Ongoing product innovation, a consolidating competitive landscape and customer-acquisition opportunities such as the 2026 World Cup in the U.S. support continued momentum in the business.

BSD Analysis:
Flutter is the global leader in online betting with a portfolio approach that lets it win across geographies and regulatory regimes. FanDuel gives it dominant U.S. exposure, which is still the industry’s largest prize pool. Scale matters here: better pricing, better product, better marketing efficiency, and more data to sharpen risk management. The market worries about regulation, but regulation often entrenches the biggest compliant operators—aka Flutter. Profitability improves as mature markets throw off cash and newer markets stop burning money. The key risk is promotional wars, but Flutter is better positioned than most to play offense without self-destructing. If U.S. margins keep trending toward global norms, earnings power rerates meaningfully. This is a category consolidator with real moats, not a gimmicky gambling app.

Pitch Summary:
REA Group operates Australia’s leading online property marketplace. The company sits at the center of Australia’s residential property ecosystem, connecting buyers, sellers and agents in a vendor-paid advertising model that benefits from powerful network effects. REA’s scale advantage is substantial, with an audience approximately four times that of its nearest competitor, deep agent relationships and proprietary data that is difficult to replicate. While AI may improve certain aspects of discovery and initial search, it cannot replace the core home-search journey, which requires a complete picture of listings, rich visual context and an iterative decision-making process that only the portals can deliver. Importantly, REA is already deploying AI across more than 25 initiatives spanning product development, operations and financial services. Taken together, these attributes contribute to our view of REA as an Exceptional Growth Company with durable long-term competitive advantages.

BSD Analysis:
REA is the tollbooth on Australian housing attention, and attention is the scarce commodity in property markets. The platform’s pricing power is outrageous because agents need leads and REA owns the funnel. Even when housing slows, listings eventually come back, and REA’s monetization per listing tends to keep rising. The best part is the cost structure: incremental revenue drops through with SaaS-like margins. Investors fear regulation or disruption, but network effects in property portals are brutal and sticky. International expansion is optionality, not the core thesis, which keeps the story clean. When housing sentiment turns, REA rebounds faster than almost any housing-exposed equity because it sells the shovels, not the houses. This is one of the purest platform monopolies in public markets.

Pitch Summary:
GrainCorp (ASX: GNC -17.6%, incl. div) was a negative contributor over the quarter following the release of FY25 results and a subsequent trading update highlighting continued margin pressure and a softer volume outlook for FY26. Management’s preliminary estimate for FY26 receival volumes of 11.0–12.0mt represents a material decline from FY25 levels, with low grain prices leading farmers to hold volumes from the market. GrainCorp also announced the sale of its underperforming GrainsConnect Canada joint venture, which had generated $52m of operating losses over three years. We had previously reduced our holding, mitigating downside, and expect the next catalyst to be FY26 guidance at the AGM.

BSD Analysis:
GrainCorp is a key piece of Australia’s agricultural infrastructure, handling storage, logistics, and processing. Earnings swing with crop volumes and weather, creating volatility. Yet the asset base is irreplaceable and capital intensive. Global food demand and trade flows support long-term relevance. Processing margins add diversification beyond pure handling. Investors tend to trade weather rather than infrastructure value. Normalized earnings power is higher than spot cycles suggest. GrainCorp benefits from scale and geography. This is a cyclical business anchored by strategic assets.