Investment Pitches

Pitch Summary:
Uber Technologies, Inc. stock saw 4Q volatility after strong YTD gains; despite solid bookings, improving profitability, and strong free cash flow, the shares traded largely on Autonomous-Vehicle-related narrative rather than fundamentals. The stock sold off post-earnings on renewed robotaxi concerns, rebounded as investors re-anchored on near-term fundamentals, and then weakened into year-end following Waymo’s 2026 expansion plans, which revived long-term disintermediation fears and drove profit-taking. Importantly, fundamentals never broke, and the volatility reflects uncertainty around Uber’s role in a future AV world—not its earnings power over the next several years. Regardless of whether AVs consolidate around a few players or evolve into a multi-operator ecosystem, we see Uber’s scale, demand aggregation, and capital-light model position it to benefit rather than be displaced.

BSD Analysis:
Uber has completed the transition from growth-at-all-costs to disciplined cash flow generation. Mobility demand remains strong, and delivery profitability continues to improve. Scale advantages in data, pricing, and regulation are real. Autonomous vehicles are upside, not existential risk. Investors still anchor to the old narrative. Uber is now a platform with operating leverage. This is dominance settling in.

Pitch Summary:
At the company’s Investor Day in November, management reinforced confidence in Rheinmetall’s superior earnings growth outlook through 2030 and beyond, with a EUR 50bn 2030 sales target above consensus estimates. While there were some government procurement delays pushing orders into later periods, this appears to be a timing issue, with a strong surge of orders toward year-end.

BSD Analysis:
Rheinmetall is a prime beneficiary of Europe’s rearmament cycle, with demand visibility measured in years, not quarters. Ammunition, vehicles, and systems are all capacity-constrained. Political will has finally aligned with procurement reality. Margins expand as scale ramps. Investors worry about cyclicality that simply isn’t there anymore. Defense spending has structurally reset higher. Rheinmetall is building the arsenal Europe forgot it needed.

Pitch Summary:
Performance within Consumer Staples was driven by Estée Lauder Companies Inc., the portfolio’s sole holding in the sector. Estée Lauder is in the midst of a turnaround, and fiscal 1Q26 results (ended September 30) results provided outperformance against many of the key touchpoints: sales, margins, China, US and Travel Retail. News flow since then points to a successful 11/11 for EL in China (25% of company sales), continued stabilization in the US and a Travel Retail channel that is no longer declining. Beauty overall is a one of the more resilient categories, enjoying both volume and value growth, and a hallmark of the 2025 holiday season is the “K shaped economy and consumer behavior” – as a major player in luxury beauty EL is at the nexus of these trends. Stock performance reflects optimism regarding continued progress driven by internal initiatives as well as optimism regarding the broader beauty market.

BSD Analysis:
Estée Lauder is a premium beauty franchise navigating post-pandemic normalization and China uncertainty. Brand equity remains strong, but channel mix shifts hurt near-term results. Inventory and cost resets are underway. Long-term beauty demand is resilient and global. Investors worry about growth deceleration, but premium positioning holds pricing power. When China stabilizes, earnings leverage is meaningful. This is a high-quality brand in a digestion phase.

Pitch Summary:
Citigroup Inc.’s ongoing transformation strategy is paying off as the company allocates more capital to higher return businesses and is diligent on cost discipline. Investment Banking fee revenue was strong, reflecting improved deal activity and market share gains. In addition, market and trading results have been very strong as markets and volatility have increased. Lastly, the bank is benefiting from a better regulatory environment, lowering costs which is expected to keep improving in 2026. All these positives are benefiting Citi even as it trades among the lowest valuations among big banks. This should lead to multiple expansion as the company delivers double-digit earnings growth over the coming year.

BSD Analysis:
Citi is finally shrinking to grow, exiting complexity that never earned its keep. Capital ratios are strong, and the global transaction services business remains elite. Execution risk persists, but simplification is real this time. The stock trades at a deep discount because trust is broken. That creates upside if management keeps delivering boring progress. Citi doesn’t need greatness — just competence. This is value with catalysts, not hope.

Pitch Summary:
RTX Corporation (RTX) – formerly known as Raytheon Technologies Corporation, is a major American multinational aerospace and defense company headquartered in Arlington, Virginia. It is one of the largest aerospace and defense manufacturers globally, serving commercial, military, and government customers across more than 180 countries. As global air travel continues recovering toward pre-pandemic levels, demand for new aircraft and maintenance, repair and overhaul (MRO) services is increasing. Commercial aftermarket sales—parts, service contracts, and support—have been a strong driver of organic growth due to rising airline utilization. RTX’s Raytheon segment benefits from rising defense budgets in the U.S. and allied countries, with growth underpinned by demand for integrated air and missile defense systems (e.g., Patriot), counter-drone technologies, and other advanced defense programs driven by geopolitical tensions. International orders are a growing portion of the defense backlog. The entire Defense Prime complex is currently re-rating as countries around the world commit to higher defense spending, and we like RTX for its three distinct business segments—Pratt & Whitney (engines), Collins Aerospace (avionics and systems), and Raytheon (defense systems)—which provide balanced exposure across commercial and government markets. While valuation has increased, we believe the defensive narrative is still early, allowing for a reasonable balance between risk and reward.

BSD Analysis:
RTX is a defense and aerospace heavyweight navigating through operational turbulence with long-term demand firmly on its side. Geopolitical realities are driving sustained increases in defense spending globally. Commercial aerospace recovery adds a second engine of growth. Supply chain issues hurt margins, but they are fixable over time. Investors fixate on near-term execution misses. The backlog says demand isn’t going anywhere. This is strategic infrastructure, not a trade.

Pitch Summary:
Turning to Cogstate, the company provided a trading update indicating contract sales for the first half of financial year 2026 are expected to be in the range of US$37–40 million, up 82–97% on the prior corresponding period and representing its second-best half on record. The result reflects a record pipeline and a more diversified mix of wins across; disease areas, contract sizes and customers, with underlying demand and sales momentum remaining strong. While several contracts were signed late in the half, this delayed revenue recognition, and a higher mix of service-based revenue alongside incremental investment to support an expanding range of indications weighed on reported revenue and margins for the period. Importantly, these impacts are timing-related rather than structural, with the growing contracted backlog expected to support revenue and margin recovery through the second half and beyond. Nonetheless, the timing delays are negative in the short-term and weighed on both the Cogstate share price, and in turn the Lakehouse Small Companies Fund unit price, in December. We saw this as a buying opportunity and topped up the Fund’s investment.

BSD Analysis:
Cogstate operates at the intersection of neuroscience, data, and clinical trials, providing cognitive assessment tools used in drug development. As CNS trials become more complex, objective measurement matters more. Revenue can be lumpy, tied to trial timing. The product is sticky once embedded in protocols. Investors overlook Cogstate because it’s small and specialized. But specialization is the moat. This is a picks-and-shovels play on brain science.

Pitch Summary:
This is the first time discussing our investment in Magellan Financial Group. At a high level, most will think of Magellan as a (shrinking) investment manager of global listed infrastructure and equity funds. While the market continues to view Magellan primarily through the rearview mirror of its legacy funds management business, our thesis focuses on the less-appreciated value within its ‘Capital Partners’ segment – in particular the rapid ascent and move to profitability of their stake in Barrenjoey. At a high level, the market implies little value to Magellan outside of its core funds management operations, ignoring the growth from their 36.4% interest in investment bank, Barrenjoey, 29.5% stake in quant investment manager, Vinva, and 16% holding in financial market infrastructure provider, FinClear. The revolving door of issues at Magellan appears to have slowed, management team stabilised, and outflows from the legacy business moderated. Meanwhile Barrenjoey has successfully disrupted the local investment banking oligopoly -- securing top-tier league table positions in M&A and equity capital markets within its short existence -- and, crucially, transitioned from a capital-intensive build phase to a more cash-generative harvest phase, whilst still expanding offshore. Barrenjoey paid its maiden dividend in FY25, and with both Barrenjoey and Vinva set to distribute dividends in the first half of fiscal 2026, we see an improving earnings profile ahead compared to that endured in recent years. The thesis is supported by a pristine balance sheet that offers significant downside protection as the business carries no debt and holds around $560 million in excess capital across cash and liquid investments. It may take several years for this excess capital to fully benefit shareholders, though progress is being made including management buying back approximately 5% of shares on issue over the last 12 months at an average price of $8.15, and broadening the dividend policy to 80% of (the more diversified) group operating profit. Whilst we’ve only taken a modest position in the portfolio, we see a brighter future ahead for Magellan. With 18% of its market capitalisation in cash and financial assets, and shares selling for discounted single digit earnings multiple, we are paying a deeply discounted price for the investment management business and effectively getting the growth optionality of Barrenjoey – and to a lesser extent, Vinva and FinClear – almost for free.

BSD Analysis:
Magellan is a fallen star in global asset management, still paying for past concentration mistakes. AUM declines hurt sentiment, but the business remains profitable and cash generative. The reset has been painful but necessary. Performance stabilization would change the narrative quickly. Investors assume permanent irrelevance, which may be premature. Asset managers don’t need growth to survive — just trust. This is a recovery story, not a growth one.

Pitch Summary:
Burford was one of the portfolio’s most challenging holdings in 2025, down about 28%. The stock detracted, reflecting continued investor focus on the timing and predictability of realizations (namely, a very large single case) despite having a diversified portfolio of hundreds of cases and a historical track record of 30%+ gross IRRs. Our investment case has never depended on smooth quarterly earnings or short-term accounting outcomes. Burford operates a differentiated platform that can deploy capital to deliver attractive returns across a diversified portfolio of legal assets. Long-term value is driven by aggregate cash realizations rather than quarter-to-quarter volatility. Management remained focused on balance-sheet strength, disciplined capital deployment, and improved transparency around portfolio performance. While sentiment remained cautious, we believe these actions enhance the franchise's long-term value. Looking ahead, we see a clear path to materially higher cash earnings as Burford’s portfolio matures and capital is recycled into new opportunities. Our base case remains that intrinsic value can double over the next four to five years, without reliance on economic tailwinds or multiple expansion. The stock is the cheapest on price-to-book and enterprise value-to-invested capital it has ever been and is poised to deliver regardless of the outcome of its case against the Argentinian government.

BSD Analysis:
Burford is the institutionalization of litigation finance — a niche that behaves nothing like traditional asset classes. Returns are lumpy, but long-term ROIC has been compelling. Accounting noise obscures real value creation. Legal duration and case outcomes require patience most investors lack. Scale and expertise now separate Burford from smaller competitors. The market hates opacity, which keeps valuation depressed. This is alternative finance with asymmetric payoff potential.

Pitch Summary:
Watches of Switzerland followed a similar trajectory to YETI in 2025. The stock was pressured earlier in the year amid macro uncertainty before becoming one of the portfolio’s largest contributors in Q4. The recovery reflected improved confidence in management execution rather than a sudden improvement in end-market conditions. The company continues to benefit from its position as a leading retailer of highly desirable luxury watch brands, supported by strong client relationships and disciplined inventory management. Tariffs have hit the Swiss watch industry hard, but companies can mitigate the impact through retail price adjustments, transfer pricing strategies, and tighter cost controls. Today, manufacturers rely on their retail partners more than at any time in the past decade. A good example is Rolex, which now allows authorized wholesalers, such as Watches of Switzerland, to become exclusive retailers of pre-owned timepieces, creating an additional revenue stream alongside service-related income. We believe Watches of Switzerland remains well-positioned to compound intrinsic value even in a more muted consumer environment. Operational leverage, continued market-share gains, and a focus on return on invested capital underpin our long-term thesis. We see a credible path to doubling cash earnings over the next four to five years.

BSD Analysis:
Watches of Switzerland is a gatekeeper to luxury timepieces in a supply-constrained market. Authorized dealer status is the moat, not retail square footage. Demand for Rolex and Patek remains structurally higher than supply. Short-term luxury spending wobbles don’t change that math. Inventory discipline and manufacturer relationships matter more than foot traffic. Investors worry about luxury cyclicality, but scarcity dominates pricing. This is controlled distribution, not fashion retail.

Pitch Summary:
YETI was a significant detractor in the first half of 2025, as concerns about consumer demand, drinkware inventory levels, and discretionary spending dominated the narrative. Share prices declined despite limited evidence of structural deterioration in the business. In the second half of the year, and particularly in Q4, YETI rebounded sharply and became one of the portfolio’s largest contributors. The improvement reflected execution rather than a change in the environment. Inventory levels normalized, margins stabilized, and the business continued to generate strong free cash flow. We believe YETI is emerging from this period with a stronger competitive position and a very strong new product roadmap. Management has demonstrated discipline in inventory and pricing, continued to invest in product innovation, and expanded its direct-to-consumer channel. Over a four- to five-year horizon, we see a credible path to doubling cash earnings and intrinsic value.

BSD Analysis:
YETI is a premium consumer brand that continues to punch above its category through authenticity and pricing power. Demand softened as consumers normalized spending, but brand loyalty remains intact. Product expansion beyond coolers is extending the runway. Margins remain healthy because YETI refuses to chase discount volume. Investors confuse slower growth with brand decay. Premium brands don’t die quietly — they fade loudly, and YETI hasn’t. This is a lifestyle franchise resetting expectations.

Pitch Summary:
Park Hotels & Resorts was a detractor for the year. The company sold off due to worries about how an uneasy macro environment will impact a leisure-focused hotel company. The iconic Hilton Hawaiian Village, Park’s most valuable property, is still recovering from both a labor strike in 2024 and reduced Japanese inbound travel as a result of the weaker yen. The company has continued down the path of selling non-core hotels and has thus far received attractive prices, while share repurchases have also occurred. We sold our position earlier in the year due to a combination of recycling capital into better ideas and never getting our position to a normal weight.

BSD Analysis:
Park Hotels is a pure-play on large-format, high-end hotels tied to business travel and conventions. Leisure travel already recovered, and group bookings are now following. Room rates remain structurally higher than pre-COVID norms. Debt is manageable, and asset quality is strong. Investors worry about recession risk, but pricing power tells a different story. Hotels reprice daily — that flexibility matters. This is cyclical exposure with improving fundamentals.

Pitch Summary:
In the fourth quarter of 2024, we were trimming our position in New York real estate company ESRT, as it had been a strong performer and the P/V gap had closed. This year, both ESRT and its peer Alexander’s faced stock market headwinds as New York real estate sentiment shifted. We have added to both at great prices. It is an interesting dynamic where the on-the-ground results are stronger than the headlines, with region-wide leasing trends far outpacing weak stock price performance. The stock market worries about Mayor Mamdani, but that fear is now in the stock prices, plus it remains to be seen how truly business-unfriendly his administration will be. New York real estate has made it through a lot historically. These two stocks traded at or above our appraisals during the not-great de Blasio administration and are uniquely undervalued vs. peers today. Both of our holdings are on offense with multiple ways to grow value per share and a willingness to sell assets into a more attractively priced private market.

BSD Analysis:
Alexander’s is a highly concentrated real estate vehicle with exposure to irreplaceable New York assets. The portfolio is small but extremely high quality, creating leverage to any improvement in city-level fundamentals. Illiquidity and complexity scare most investors away. That fear keeps valuation detached from underlying asset value. Cash flows are lumpy, but real estate optionality is massive. This is a patient capital story, not a quarterly one. Deep value lives in places like this.

Pitch Summary:
In the fourth quarter of 2024, we were trimming our position in New York real estate company Empire State Realty (ESRT), as it had been a strong performer and the P/V gap had closed. This year, both ESRT and its peer Alexander’s faced stock market headwinds as New York real estate sentiment shifted. We have added to both at great prices. It is an interesting dynamic where the on-the-ground results are stronger than the headlines, with region-wide leasing trends far outpacing weak stock price performance. The stock market worries about Mayor Mamdani, but that fear is now in the stock prices, plus it remains to be seen how truly business-unfriendly his administration will be. New York real estate has made it through a lot historically. These two stocks traded at or above our appraisals during the not-great de Blasio administration and are uniquely undervalued vs. peers today. Both of our holdings are on offense with multiple ways to grow value per share and a willingness to sell assets into a more attractively priced private market.

BSD Analysis:
Empire State Realty is a New York office REIT anchored by one of the most recognizable buildings on Earth. The Empire State Building provides tourist cash flow that most office landlords don’t have. Office leasing remains challenged, but location quality matters more than ever. Balance sheet conservatism gives the company time to wait out weak demand. Investors treat all office the same, which is lazy. Trophy assets recover first. This is optionality priced like distress.

Pitch Summary:
Packaging company Clearwater Paper was a detractor for the year. We bought shares of Clearwater in April. The stock has since sold off as the already weak solid bleached sulfate (SBS) paperboard market showed few signs of improving. The market has been depressed and below mid-cycle due to oversupply problems that were exacerbated by a competitor conversion earlier this year. Clearwater continues to operate well what it can control, as evidenced by meeting synergy targets from a large and opportunistic acquisition completed last year. The clearest way the oversupply problem will be fixed is through capacity closures, but help is also coming in the form of tariffs on competing European capacity, as well as a weaker dollar that makes these imports less appealing. Management has a strong capital allocation track record and recently decided to focus on share repurchase after running an analysis on a high return but time-consuming project. We agree with this decision as the business trades at a low single-digit multiple of growing mid-cycle FCF.

BSD Analysis:
Clearwater is a private-label tissue and paperboard producer operating in a category defined by necessity, not discretion. Demand is steady, pricing power is improving, and cost volatility is finally easing. The business benefits when consumers trade down from premium brands. Operational improvements and asset rationalization are lifting margins off depressed levels. Investors overlook Clearwater because paper sounds boring and cyclical. But essential products with improved discipline tend to re-rate quietly. This is unsexy stability with upside.

Pitch Summary:
Alcoholic beverage company Boston Beer was a detractor for the year as alcohol consumption faced headwinds. Volume declines at Twisted Tea, the company’s largest brand, weighed on the stock. Twisted’s pricing had gotten a little overextended, but the company is actively working to fix this problem and has also successfully fended off numerous competitors that entered the hard tea space over the last few years. Additionally, Truly is still having difficulty returning to growth after multiple difficult years but is now a much smaller part of the company. Boston Beer has continually proven itself as one of the best innovators in the industry, as shown again by its new and successful vodka-based product Sun Cruiser, which is in the process of a national rollout and will be key to getting the company back to growth. We have been pleased by the speed at which management has corrected margin problems that arose in the aftermath of the hard seltzer boom, and we still believe there is further room for improvement. Founder Jim Koch stepped back into the CEO seat in August for the first time in almost 25 years after former CEO Michael Spillane stepped down. The company still has a net cash position and is one of our largest share repurchasers. We think repurchase is a great use of capital for a consumer packaged goods company with quality brands that trades at 1x revenue, all at a time that it could be an acquisition target amidst industry consolidation.

BSD Analysis:
Boston Beer is living through the hangover phase after hard seltzer excess distorted demand and expectations. The core brands remain strong, but innovation misfires hurt credibility. Cost pressures and inventory resets cloud near-term results, yet cash generation remains intact. The company still knows how to build beverage brands — it just needs patience again. Investors assume permanent impairment where cyclical normalization is more likely. When volume stabilizes, operating leverage reappears quickly. This is a bruised brand house, not a broken one.

Pitch Summary:
Healthcare insurance company Oscar was a contributor for the year as above-market membership growth and sustained expense discipline reinforced confidence in the company’s positioning within the individual health insurance market. We exited our position in the third quarter as the P/V gap closed and industry risks became more apparent. The subsequent drama around the expiration of enhanced Affordable Care Act (ACA) subsidies underscores the ongoing policy uncertainty and challenges facing ACA-centric insurers like Oscar. Overall, the investment was successful for us, aided by management’s execution through a volatile industry backdrop.

BSD Analysis:
Oscar is the rare insurtech that survived long enough to become boring — and that’s the point. After years of chasing growth, management has shifted decisively toward profitability, risk discipline, and pricing sanity. Medical loss ratios are stabilizing, and cost controls are finally sticking. Oscar’s tech-native model still offers structural advantages in engagement and data. The market treats Oscar like a failed disruptor, but the business is maturing into a viable niche insurer. It doesn’t need to replace incumbents to win. Survival turned this into a real operating company.

Pitch Summary:
Children’s toy, media, and consumer products creator Mattel was a contributor for the quarter and the year. The company is in its strongest position in over 10 years, and there are multiple ways to win. Over 80% of Mattel’s value comes from growing power brands like Hot Wheels, Barbie, and UNO. Mattel has a strong balance sheet which allowed material stock repurchases of $600 million in 2025, and we believe additional share repurchase will come at these discounted prices in 2026. Fundamentally, the toy business continues to grow and gross margins remain strong at 50%. Mattel has a promising owned IP outlook for 2026 with the Masters of the Universe and Matchbox movies, along with two video games, being released.

BSD Analysis:
Mattel is no longer just a toy company — it’s an IP monetization platform that finally learned how to respect its own brands. The Barbie breakout validated the value of its character library and unlocked a roadmap for film, gaming, and licensing. Core toy demand is cyclical, but IP revenues are far higher margin and far more durable. Cost discipline has improved materially, fixing years of sloppy execution. Investors worry the movie success was a one-off, but the brand vault is deep. Mattel doesn’t need every swing to hit. This is an IP owner relearning how to compound.

Pitch Summary:
Diversified conglomerate GHC performed strongly throughout the year. The company’s Kaplan education segment has multiple subparts that are finally back to growth in aggregate after a multi-year turnaround has borne fruit. It is encouraging that broadcast television M&A has increased this year, which could give GHC a unique opportunity to grow and realize its value in this segment. The healthcare segment continued its strong growth and looks to be navigating a leadership change well. Overall, GHC remains on offense with its strong net cash balance sheet and overfunded pension.

BSD Analysis:
Graham Holdings is a quietly brilliant capital allocation story hiding behind an outdated education headline. The company has systematically diversified into local media, healthcare services, automotive dealerships, and cash-rich investments that throw off steady returns. Management’s willingness to shrink, sell, or redeploy capital without sentimentality is the real asset. The balance sheet remains conservative, giving Graham flexibility when others are forced sellers. Investors fixate on legacy assets and miss the compounding happening underneath. This is a modern Berkshire-style operator without the fan club. Boring structure, intelligent capital, and persistent mispricing.

Pitch Summary:
Alaskan communications company GCI Liberty was a positive contributor for the year. We purchased GCI after it spun out of Liberty Broadband in July. GCI holds the number one position in both consumer and enterprise broadband in Alaska, while also owning the second largest wireless network. Their assets are essentially irreplicable due to the location, climate, and terrain of Alaska. A combination of attractive tax attributes from the spin and a business that will be producing significant FCF in the near term which could allow GCI to be the next iteration of Liberty Media. All-time great Southeastern partner John Malone will remain Chairman at GCI despite stepping back from most other boards, and he has shown his belief in the company through both insider buys and fully backstopping a recently completed $300 million rights offering. The stock appreciated as the market better understood it post-spin, but the company still trades at a sizable discount to Lower 48 telecom assets despite having a much better competitive position.

BSD Analysis:
GCI Liberty is a pure-play on Alaskan broadband infrastructure, an asset class that looks boring until you realize there’s no real competition. Geographic isolation actually strengthens the moat by making duplication uneconomic. Cash flows are stable, recurring, and inflation-resistant. Capital intensity is high, but replacement value is even higher. Investors struggle to value single-market infrastructure stories. GCI is less about growth and more about owning the only pipe that matters. This is monopoly economics in an overlooked zip code.

Pitch Summary:
Global food and beverage producer Kraft was a detractor for 2025. The market is overly focused on the lack of near term growth in North America and not focusing enough on the value-creating potential of the company's upcoming split into two businesses: the higher-growth Global Taste Elevation Co. which contains the Heinz brand and should garner a teens EBITDA multiple, and the stable remaining company comprised largely of North American grocery products, which can trade at the same multiple total Kraft currently trades today. This would result in a combined stock price over $40 per share. We are also extremely pleased with Steve Cahillane being named CEO. We got to know Steve during our successful investment in Kellanova / Kellogg’s, and we believe Steve is the perfect operator to lead Global Taste Elevation and help decide who should lead North American Grocery.

BSD Analysis:
Kraft Heinz has accepted that it’s a cash-flow story, not a growth fantasy, and that reset actually strengthens the investment case. Pricing power has proven more durable than skeptics expected, even as consumers push back. Cost discipline and SKU rationalization are improving margin stability. The brands may not be exciting, but they still own shelf space. Investors underestimate how defensive food portfolios perform during volatility. Capital returns matter more than reinvention here. Kraft Heinz is built to endure, not impress.