Investment Pitches

Pitch Summary:
Domo is exploring strategic alternatives as it faces decelerating growth and a shift in focus towards profitability. Despite achieving positive EBITDA and maintaining high gross margins, the company's share price has been under pressure due to market dynamics and competition from AI technologies. Management's open market share purchases indicate confidence in the company's potential, but stabilization of the share price remains a concern.

BSD Analysis:
Domo's exploration of strategic alternatives highlights the challenges it faces in a competitive technology landscape. The company's strong gross margins and recent profitability are positive indicators, but the impact of AI and market pressures cannot be ignored. Investors should monitor Domo's strategic decisions and their potential to enhance shareholder value, while also considering the risks associated with its current valuation and market position.

Pitch Summary:
Johnson Matthey's sale of its Catalyst Technologies division to Honeywell faced a significant price cut, dropping from £1.8 billion to £1.325 billion. Despite the market's negative reaction, with shares down 17%, management remains committed to the sale, citing strategic benefits. The deal's completion is expected to lead to substantial capital returns, including a special dividend and buybacks, amounting to around £1 billion.

BSD Analysis:
The reduced sale price of the Catalyst Technologies division reflects the challenges Johnson Matthey faces in executing its strategic plans. While the capital returns post-sale may offer some relief to shareholders, the market's reaction suggests concerns about the company's future growth prospects. Investors should consider the implications of this transaction on Johnson Matthey's long-term strategy and the potential risks associated with its reliance on capital returns to drive shareholder value.

Pitch Summary:
Carlsberg is considering a potential $700 million IPO of its India business. This move is part of a broader trend of multinationals tapping into India's higher valuations. Carlsberg India, the country's second-largest brewer with a 22% market share, could benefit from the listing by gaining access to capital markets and enhancing its growth prospects.

BSD Analysis:
The potential IPO of Carlsberg's India business reflects the company's strategy to capitalize on the growing Indian market, which offers attractive valuation multiples. While the size of Carlsberg may generally be too large for certain investors, the Indian subsidiary's strong market position and revenue growth make it an interesting opportunity. Investors should weigh the benefits of exposure to the Indian market against the risks associated with the brewing industry and the volatility of emerging markets.

Pitch Summary:
Medtronic is on track to spin off its Diabetes unit, MiniMed, by Q4 2023. This unit represents approximately 10% of Medtronic's total revenues and is a key growth driver for the company. The spin-off is expected to unlock value for shareholders by allowing Medtronic to focus on its core operations while providing MiniMed with the opportunity to grow independently.

BSD Analysis:
The spin-off of MiniMed could be a strategic move to enhance Medtronic's focus on its primary business areas while enabling the Diabetes unit to pursue growth opportunities more aggressively. This separation may lead to improved operational efficiencies and a clearer strategic direction for both entities. Investors should consider the potential for increased shareholder value as a result of this transaction, as well as the implications for Medtronic's overall growth strategy.

Pitch Summary:
Ramsay Health Care is planning to spin off its struggling European arm, Santé, by Q4 2026. This strategic move is expected to simplify Ramsay's operations by removing the lowest-margin and most complex part of the group, which previously hindered a takeover bid by KKR in 2022. The spin-off is anticipated to enhance the visibility and valuation of Ramsay's Australian hospitals business, making it a more attractive investment.

BSD Analysis:
The spin-off of the European arm is a strategic simplification that could unlock significant value for Ramsay Health Care. By focusing on its core Australian operations, Ramsay can potentially improve its financial performance and operational efficiency. The move may also reignite interest from potential acquirers, as the company becomes a cleaner and more straightforward investment proposition. Investors should monitor the progress of the spin-off and any subsequent market reactions, as these could provide further insights into Ramsay's future growth prospects.

Pitch Summary:
Sylvania Platinum Limited has demonstrated exceptional financial and operational performance in the first half of FY2026, driven by a significant recovery in platinum group metal prices and operational excellence. The company achieved a 110% increase in net sales and a 414% rise in adjusted EBITDA, highlighting its strong operational leverage. With a record production of 49,164 4E PGM ounces and a 55% increase in the average 4E gross basket price, Sylvania is well-positioned to capitalize on the favorable market dynamics. The company's strategic focus on optimizing its assets and advancing projects like the Thaba JV further strengthens its growth prospects. Sylvania's low-cost production and disciplined capital allocation, including increased dividends and share buybacks, underline its commitment to delivering value to shareholders.

BSD Analysis:
Sylvania's ability to maintain a low cash cost per 4E PGM ounce, despite seasonal maintenance and new plant commissioning, positions it as a resilient player in the PGM industry. The company's strategic decision to not pursue the Hacra Exploration Project and focus on the Thaba JV diversification into the chromium market provides a buffer against PGM price volatility. The appreciation of the South African rand against the US dollar, while increasing reported operating costs, reflects confidence in the commodities sector. Sylvania's debt-free status and financing of expansion through operating cash flow demonstrate financial prudence. The company's increased production guidance and shareholder-friendly policies indicate a strong outlook for sustained profitability.

Pitch Summary:
Acacia Research Corporation is a shareholder-focused investment company with a diversified portfolio of cash flow-generating businesses. The company's Deflecto and Printronix segments provide stable revenue streams, contributing to its overall financial health. Acacia's value-oriented management approach and focus on non-cyclical businesses position it well for sustainable growth. The company's market cap, still just 50% over its net tangible asset value, suggests potential undervaluation. Acacia's strategic acquisitions and diversified holdings offer a balanced risk-reward profile for investors.

BSD Analysis:
Acacia Research Corporation's diversified investment strategy and focus on cash flow-generating businesses provide a stable foundation for growth. The company's emphasis on non-cyclical segments, such as Deflecto and Printronix, ensures consistent revenue streams, even in challenging economic conditions. Acacia's value-oriented management approach and strategic acquisitions enhance its potential for long-term shareholder value creation. With a market cap suggesting potential undervaluation, the company offers an attractive investment opportunity for those seeking exposure to diversified holdings. Acacia's balanced risk-reward profile and focus on sustainable growth make it a compelling choice for investors.

Pitch Summary:
American Outdoor Brands, a spin-off from Smith & Wesson, leverages its strong brand portfolio and international growth potential. The company's focus on durable brands and solid management practices, including stock buybacks, supports its long-term growth strategy. International sales, although currently a small percentage of revenue, have shown double-digit growth, indicating significant expansion opportunities. The company's ability to grow revenue without heavy capital expenditure enhances its earnings potential. With a valuation still considered cheap, American Outdoor Brands presents a compelling investment opportunity.

BSD Analysis:
American Outdoor Brands' strategic focus on brand strength and international expansion positions it well for future growth. The company's ability to achieve revenue growth without significant capital investment is a testament to its efficient operational model. As international sales continue to outpace domestic growth, the company is poised to capture a larger share of the global market. The ongoing stock buybacks reflect management's confidence in the company's prospects and commitment to enhancing shareholder value. With a strong balance sheet and growth-oriented strategy, American Outdoor Brands is well-positioned for long-term success.

Pitch Summary:
Plug Power is a leader in the hydrogen fuel cell industry, with a strong focus on green hydrogen production. The company's electrolyzers, which convert solar electricity into hydrogen, provide a significant competitive advantage. Plug Power's H2 Hollandia project exemplifies its innovative approach to integrating renewable energy with hydrogen production. The company's ongoing discussions with major data center operators highlight its potential to secure substantial contracts in the power backup sector. With numerous green hydrogen projects planned globally, Plug Power is well-positioned to capitalize on the growing demand for clean energy solutions.

BSD Analysis:
Plug Power's strategic initiatives in green hydrogen production and its collaborations with major data center operators underscore its potential for significant growth. The company's innovative use of electrolyzers to produce hydrogen from solar energy positions it as a key player in the transition to renewable energy. As global investment in green hydrogen projects continues to rise, Plug Power's established presence and technological expertise will be critical in capturing market share. The company's ability to secure long-term contracts in the data center sector could serve as a major catalyst for its future growth.

Pitch Summary:
FuelCell Energy is poised for significant growth due to its involvement in the expanding fuel cell market. The company is in discussions with hyperscalers, benefiting from increased awareness of fuel cell technology's potential in data centers. FuelCell's strategic positioning in the energy sector, particularly in providing alternative energy solutions, aligns with the growing demand for sustainable power sources. The company's potential to secure data center power backup deals represents a substantial growth opportunity. The broader industry trend towards clean energy solutions further supports FuelCell's growth prospects.

BSD Analysis:
FuelCell Energy's engagement with hyperscalers highlights its strategic approach to capturing market share in the data center power backup sector. The company's focus on alternative energy solutions positions it well to meet the increasing demands for sustainable power sources, driven by data center expansion and electric grid needs. The potential for significant contracts in this space could serve as a major catalyst for FuelCell's growth. As the renewable energy sector continues to evolve, FuelCell's innovative technology and strategic partnerships will be key drivers of its long-term success.

Pitch Summary:
Cronos Group has demonstrated strong management execution, particularly with its strategic acquisition of CanAdelaar B.V., a leading cannabis company in the Netherlands. The acquisition was made at a favorable price, enhancing Cronos' presence in Europe. The company's gross margin of 51% is notably higher than competitors, indicating operational efficiency. Cronos' pristine balance sheet, with substantial cash reserves and no long-term debt, positions it well for future growth. The company's market share in Canada and Israel, coupled with its potential expansion into the US market, presents significant long-term growth opportunities.

BSD Analysis:
Cronos Group's strategic acquisition of CanAdelaar B.V. not only strengthens its European footprint but also aligns with its broader international growth strategy. The company's robust financial health, characterized by a strong balance sheet and impressive gross margins, provides a solid foundation for future expansion. The potential entry into the US market could serve as a major catalyst for growth, although the company is well-positioned to thrive even without immediate US market access. Cronos' focus on operational efficiency and strategic acquisitions underscores its commitment to long-term shareholder value creation.

Pitch Summary:
Sea Ltd (SE): Sea Limited shares have declined ~-45% over the past few months. The magnitude of the decline these last few months is surprising, especially since not much has changed with their fundamentals. After talking to other investors, it seems the short-term pessimism hinges on two points: 1) rising fear of TikTok Shop competition in Southeast Asia, and 2) Shopee reinvesting more heavily into logistics / entering a re-investment cycle – which investors fear will cap near-term margins at roughly ~0.7% of GMV this year, versus prior Street expectations of ~1.2%. The market never likes negative earnings revisions (especially with how short-term oriented the market has become in recent years; LINK). Even if these investments will strengthen Shopee’s competitive position and moat for the long-term. Amplifying this dynamic, is the market’s concern that this spend is defensive. That it’s a necessary response to TikTok rather than a voluntary choice. And that the margin compression we’re seeing is therefore structural, not temporary. The fear is that terminal margins might be closer to 1%, rather than 3% of GMV due to competition. However, I think the market is mistaken. First off, the TikTok Shop narrative simply doesn’t match the data. Alternative data suggests that TikTok Shop’s GMV growth in Southeast Asia has slowed materially over the past few quarters – from ~+70% y/y in Q2 2025, down to ~+30% y/y by late 2025. That’s only modestly above Shopee’s own growth of ~+25% y/y. More notably, TikTok’s relative market share versus Shopee in Indonesia – the region’s largest market – has effectively flat-lined over the past year. If the data is even directionally correct, it reframes the entire conversation. Shopee’s roughly 50 basis points of incremental reinvestment starts to look discretionary and offensive – widening the moat – rather than a desperate defensive reaction to competitive pressure. But what if the alternative data is wrong, and TikTok is actually growing at a faster rate? Even so, I think the risk is limited. The fact is that both Shopee and TikTok Shop are raising their take-rates in lock-step. When Shopee increases their fees, TikTok usually follows days later. That’s typically a sign of stabilizing competition, not of an irrational, aggressive competitor. For example, TikTok Shop did ~$45BN in GMV last year, versus Shopee’s ~$125BN. We’ve heard rumors that TikTok Shop’s internal goals are to grow +50% in 2026. Meanwhile, Shopee is targeting +20% GMV growth. If this plays out, TikTok will add an incremental $22BN in GMV vs. Shopee’s $25BN. Shopee is still growing faster on an absolute level, and certainly isn’t being impacted to the degree the market fears. Additionally, our analysis indicates most of TikTok Shop’s growth is coming from rural areas – from consumers brand new to ecommerce. These are consumers in Tier 2 or Tier 3 cities, who are scrolling TikTok for entertainment, and just happen to come across, say, a makeup review video, that that triggers them to impulsively buy some lipstick. These were not viable customers for Shopee previously. So in this way, I suspect TikTok Shop might actually benefit the ecosystem over the long-run, by getting these consumers to try online shopping for the first time. As the online shopping habit matures and they become savvier shoppers, inevitably some of them will find their way to Shopee’s platform as well. So what’s priced in after the stock decline? At ~$107, Sea Limited is trading at roughly 7x 2028 EV/EBITDA, with +30% y/y EBITDA growth. All international e-commerce stocks have traded down over the past several months – Coupang, MercadoLibre, and others – so part of this is definitely a sector-wide de-rating. But even so, the current valuation seems a bit extreme for a company with Shopee’s dominant ~52% market share and growth profile. I suspect the reason the stock is down the last few months is simple - 2026 margins expectations are down, therefore 2026 earnings revisions are negative, therefore the stock goes down. But if the margin compression is indeed temporary and discretionary – an offensive choice to invest while competitors stumble – then Shopee likely emerges on the other side of this investment cycle with a wider moat and structurally better economics. And at ~7x 2028 EBITDA with 30% growth, the risk-reward seems quite favorable from here.

BSD Analysis:
Sea Limited is currently navigating a high-stakes battle for dominance in Southeast Asian e-commerce, with 2026 marking a critical pivot toward re-accelerating GMV growth for Shopee. The company’s e-commerce arm is projected to increase its Gross Merchandise Value by over 25% in 2026, fending off intense competition from TikTok Shop and Temu through aggressive logistics investments. While these expenditures have recently pressured near-term profits, Shopee has begun raising commission fees across core markets, indicating high merchant retention and confidence in its scale. The digital financial services segment (SeaMoney) and the gaming division (Garena) continue to provide the cash flow necessary to fund the e-commerce expansion. For investors, Sea represents a high-beta play on the burgeoning $675 million Southeast Asian consumer market, with the central thesis focused on its ability to maintain market share while steadily improving monetization.

Pitch Summary:
New Oriental Education (EDU): We sold the last of our New Oriental position this quarter. The opportunity first appeared in 2022, after a brutal stretch for the company. China had launched a sweeping regulatory crackdown on the after school tutoring sector in 2021 (discussed in our Q2 2021 letter; LINK), and shares were then hit again as investors fled Chinese markets during the 2022 bear market. In total, the stock plummeted 96% from peak to trough in just over a year. Most investors wrote the company off as “uninvestable”. But when we took a closer look that Fall, we saw something different: a company that had stabilized its operations and was positioning itself on the right side of a turnaround. Management had launched several new non-academic business lines – robotics, coding, arts, sports – and even found an unexpected hit in live-streaming through its Koolearn subsidiary, powered by the captive personality of one of its former star instructors. Management was confident the worst was behind them. They believed nearly all planned tutoring center closures were complete, the regulatory overhang was lifting, and they forecasted a return to profitability by the following quarter. They backed up that conviction by returning roughly $700 million to shareholders through a combination of share buybacks and debt repurchases. Yet the market was slow to appreciate these developments. Shares had bounced from their ~$8 low in March 2022 to over $20 by the Fall – but even at that price, the company was valued at just 10 - 20% above its net cash balance. I believed the business could generate over $500 million in free cash flow by FY 2024, implying a ~37% FCF yield at the market price (in reality, they did $836 million FCF that year). Since then, growth has settled into a more measured pace, with revenues up ~+13% y/y and operating profit growing ~+17% y/y over the past two years. The number of tutoring locations have doubled since 2022, to over 1,454 (vs. 706 in mid-2022). Unlike the prior decade though, when revenues grew at roughly 25% annually – from $386M in 2010 to $3.6BN by 2020 – I believe the company's runway for growth is considerably shorter now. Management publicly acknowledged as much a few weeks ago, noting a target of just +10% learning center growth this year. I suspect the next decade will be far less exciting than the last. The societal headwinds we outlined in our Q2 2021 letter remain firmly in place: declining birth rates will eventually weigh on enrollments, and our analysis suggests that families are already nearing the ceiling of what they can afford to spend on tutoring services. That said, this was a great investment for us. We purchased shares at an average price of ~$24, equivalent to an enterprise value of around $600 million – and just an ~18% premium to the company's net cash at the time. Since then, New Oriental has returned ~$1.3 billion to shareholders through share buybacks, debt repurchases, and dividends – most of it funded from cash flow rather than by drawing down the balance sheet. Put differently, the company has essentially paid us back our original “equity at risk” over the holding period. Shares appreciated ~+126% during our ownership. We sold our remaining stake in recent months, as I see better opportunities elsewhere.

BSD Analysis:
New Oriental is the ultimate survivor, having risen from the ashes of China’s regulatory bonfire to build a diversified, high-margin "culture and learning" empire. They’ve successfully weaponized AI learning devices to penetrate 60 cities, proving that parental demand for prestige is recession-proof even in a cooling economy. With operating margins exploding by 470 basis points, the company is flush with cash, aggressive buybacks, and a growing senior-living pivot that targets the aging elite. This isn't just a tutoring company anymore; it’s a lean, tech-heavy platform that has mastered the art of the multi-billion dollar pivot while the competition went extinct.

Pitch Summary:
Anta Sports has acquired a 29.06% stake in Puma at €35 per share, a significant premium over the current market price of €23. This strategic partnership aims to leverage Anta's expertise in revitalizing brands, similar to its successful turnaround of Fila in China. Puma's current financials are underwhelming, with shrinking EBITDA and revenue, but the brand has a strong global presence and potential for growth, especially in China where its market penetration is low. Anta's investment suggests confidence in Puma's undervaluation and potential for a turnaround, making it an attractive opportunity for investors at the current discounted price.

BSD Analysis:
Anta's history of transforming underperforming brands into profitable ventures, as seen with Fila and Amer Sports, positions it well to execute a similar strategy with Puma. The focus will likely be on expanding Puma's presence in China, where sports participation is growing, and leveraging Anta's distribution and marketing strengths. The deal structure, stopping short of a full takeover, minimizes regulatory hurdles while allowing Anta significant influence through board representation. The price gap between Anta's purchase and the current market price reflects a unique opportunity for investors to capitalize on a potential re-rating as Puma's performance improves.

Pitch Summary:
Sanofi, a major player in the healthcare sector, is currently undervalued with a market cap exceeding $100 billion and a robust financial profile. Despite recent downgrades by analysts due to concerns about its long-term growth trajectory, Sanofi's short to medium-term outlook remains strong. The company has a history of consistent dividend growth and share buybacks, and it holds a significant stake in a high-value business that could be monetized for further investments. Sanofi's valuation is at a 10-year low, presenting a unique buying opportunity as it trades at a discount compared to its peers. The potential for a recovery in its PE multiple to historical averages suggests significant upside in both share price and option value.

BSD Analysis:
Sanofi's defensive characteristics, such as high profitability, low leverage, and low disruption risk, align with the profile of companies that have performed well in recent market conditions. The company's strategic initiatives, including the potential monetization of its stake in a high multiple business and re-leveraging opportunities, could unlock substantial capital for growth and shareholder returns. The incoming CEO, with prior experience at Sanofi and a competitor, is expected to drive these initiatives effectively. Despite a recent share price decline, Sanofi's low implied volatility and attractive option pricing offer additional avenues for investors to capitalize on its recovery potential. The company's ability to maintain growth in sales and earnings per share further supports the bullish thesis.

Pitch Summary:
Energy was a key contributor, led by Tamarack Valley Energy (TVE.CA), where exposure to the Clearwater heavy oil play continued to support results. Clearwater remains one of the strongest economic oil plays in North America, and Tamarack has reinforced its positioning through ongoing operational execution and tuck-in activity, supporting production strength and free cash flow generation.

BSD Analysis:
Tamarack Valley has designed a scaled 2026 capital program of approximately $400 million, specifically aimed at maximizing total returns while maintaining flexibility in a fluctuating commodity price cycle. The company's "Clearwater" asset remains the primary engine of growth, with over 70% of the budget dedicated to primary development and waterflood expansion to mitigate decline rates. At a budget assumption of $60 WTI, Tamarack is projected to generate significant free funds flow while delivering strong shareholder returns through base dividends and share buybacks. Management's focus on capital efficiency has led to a 16% reduction in sustaining capital requirements compared to the previous year, highlighting its lean operational model. For investors seeking torque to higher oil prices with a defensive floor, Tamarack's low breakeven and disciplined reinvestment ratios offer a compelling energy play.

Pitch Summary:
Lam Research (LRCX) advanced as semiconductor capital spending remained supported by AI-driven demand for advanced chips and leading-edge fabrication tools. Even with intermittent pullbacks, the market continued to distinguish between “AI-enablers” (where demand remained strong) and more cyclical parts of the chip complex, reinforcing the durability of the infrastructure buildout theme.

BSD Analysis:
Lam Research is entering a high-growth phase in 2026, recently setting its Q3 EPS guidance at $1.25 to $1.45 as it benefits from the massive global "CapEx stream" led by foundries like TSMC. The company's focus on etch and deposition technology makes it a critical beneficiary of the shift toward advanced 2-nanometer and 3-nanometer logic nodes and high-density memory. Wall Street analysts have recently lifted price targets, citing Lam's ability to drive over $3.71 in annual EPS as the wafer fabrication equipment (WFE) market expands toward $135 billion. Management's commitment to shareholder returns is evident in its consistent dividend policy, with a yield supported by robust free cash flow generation. As AI infrastructure continues to require more sophisticated semiconductor processing, Lam's technological moat in the WFE space remains a primary growth driver.

Pitch Summary:
CAT continued to benefit from robust demand in its energy & transportation business, which has become increasingly tied to expanding global power needs, particularly the build-out of AI data centers requiring reliable on-site generation capacity. Caterpillar and Finning continued to benefit from healthy equipment demand and ongoing infrastructure and power-related spending, while RTX and Howmet were supported by strong commercial aerospace conditions and sustained defense demand that helped reinforce long-cycle revenue visibility through backlogs.

BSD Analysis:
Caterpillar stands at a historic crossroads in early 2026, transitioning from a cyclical machinery manufacturer to a high-margin industrial technology powerhouse. Following a record $67.6 billion in revenue for 2025, the company is now benefiting from a massive capital windfall triggered by landmark tax settlements and legislative victories. The "Yellow Iron" giant is leveraging this liquidity to accelerate its R&D into electric mining equipment and autonomous construction fleets, meeting the rising demand of a rapidly electrifying global economy. Investors are increasingly focused on the firm's leadership transition and its ability to maintain double-digit margins despite fluctuating global infrastructure spend. With a dominant market share and a newly optimized tax footprint, Caterpillar offers a resilient defensive profile paired with significant capital appreciation potential.