Investment Pitches

Pitch Summary:
I also made a rotational decision to purchase Occidental Petroleum at the start of 2026. The energy sector has underperformed in recent years, and I think oil prices are currently depressed. In fact, both Occidental and the energy sector haven't performed this poorly versus the S&P 500 since the dot-com bubble. Additionally, oil appears to be the only commodity that is not performing well. Occidental seemed like a good way to play a rise in oil prices, given its tight relationship with the commodity. Additionally, it has a strong shareholder base, with Berkshire Hathaway owning more than 26% of the stock. On top of that, the five largest shareholders own a combined 51.6% of the shares, which means that most of the shares are "locked up," and if buyers step into the name, there will be fewer shares available to buy, potentially adding to an advance.

BSD Analysis:
Occidental Petroleum is entering 2026 with a disciplined focus on capital efficiency and significant cost-saving initiatives following its strategic consolidation efforts. The company is on track to achieve $2.5 billion in cumulative oil and gas cost savings by the end of 2026, a move that has allowed management to trim its 2026 capital plan to approximately $5.7 billion. This streamlined approach is projected to enhance free cash flow by over $1.2 billion this year, providing a robust buffer for debt reduction and shareholder returns. Production remains strong at over 1.3 million barrels of oil equivalent per day, with a balanced mix of oil and natural gas liquids. As a key player in carbon capture technology, Occidental offers a unique energy profile that blends traditional E&P strength with a leading role in the low-carbon transition.

Pitch Summary:
Among our holdings, Microsoft has the greatest exposure to both the software and spending sides of the AI problem, and valuation is no friend of Microsoft's these days, either. That makes it a particular risk to continue to own. Additionally, Microsoft does not have a robust in-house, organic AI product. Instead, their AI services are built on the OpenAI backbone and similar platforms. We cut our Microsoft position in half last year (somewhat too early, I might add), and I'm currently being patient to see whether this fear passes or grows.

BSD Analysis:
Microsoft has recently reported its fiscal Q2 2026 earnings, demonstrating a formidable 17% year-over-year revenue increase to $81.3 billion. A major highlight is the Microsoft Cloud division, which surpassed $51.5 billion in quarterly revenue, marking the first time this segment has exceeded the $50 billion threshold. Despite these strong top-line numbers and an earnings beat of $4.14 per share, the stock experienced a tactical pullback as investors scrutinized the massive $37.5 billion quarterly capital expenditure directed toward AI infrastructure. However, the operational launch of the Maia 200 accelerator and nearly 1 GW of new data center capacity this quarter underscore the firm's focus on "tokens per watt per dollar" efficiency. With Azure constant currency growth projected at 37-38% for the next quarter, Microsoft remains the primary institutional vehicle for capturing AI-driven GDP expansion.

Pitch Summary:
Bombardier faced a significant drawdown due to the threat of a 25% tariff under the IEEPA, which was later deemed illegal. The aerospace industry, being critical and interconnected, is expected to be protected from such tariffs. Bombardier's strategic position is bolstered by exemptions under the new section 122 global tariff and the USMCA agreement, providing dual protection. The company's strong performance, including record bookings, debt reduction, and increased free cash flow, supports its turnaround story. Bombardier's stock has tripled in value over 11 months, reflecting its successful execution and favorable market conditions.

BSD Analysis:
Bombardier's strategic focus on reducing long-term debt and enhancing operational efficiency has resulted in a significant improvement in adjusted EBIT margins, climbing from 3.6% to 11.5% over five years. The company's services revenue, which offers higher margins than jet sales, has nearly doubled since 2021, contributing to its robust financial health. The potential for further growth is supported by Canada's Defence Industrial Strategy, positioning Bombardier as a key player in domestic military aerospace development. With a projected EPS growth and a favorable market environment, Bombardier's valuation could see substantial upside, especially if defense investments accelerate.

Pitch Summary:
ClearPoint Neuro is positioned as a critical player in the delivery of therapies for neurological diseases. The company's technology is essential for the precise delivery of treatments, such as the FDA-approved Upstaza for AADC deficiency. Recent clinical success with uniQure's AMT-130 program for Huntington's Disease highlights ClearPoint's potential. Despite a recent share price correction due to regulatory uncertainties, the company's long-term prospects remain strong. The potential for an accelerated FDA decision on AMT-130 could catalyze further growth, making the current price an attractive entry point for investors.

BSD Analysis:
ClearPoint Neuro's strategic position in the medtech industry is bolstered by its unique technology, which is indispensable for the delivery of certain neurological therapies. The company's collaboration with biopharma partners like uniQure underscores its integral role in advancing treatments for complex diseases. While regulatory uncertainties have recently impacted the stock price, the broader trend towards streamlined FDA processes could benefit ClearPoint. Investors should monitor upcoming regulatory developments, as favorable outcomes could significantly enhance the company's market position and valuation. The ongoing innovation and partnerships in the neurological treatment space present substantial growth opportunities for ClearPoint.

Pitch Summary:
Herbalife has been facing challenges since the end of the COVID-19 pandemic, but there are signs that these headwinds are subsiding. The stock was trading below $10, with earnings per share between $2 and $3, presenting a potential bargain. Recent developments, including a revenue beat and progress in debt reduction, suggest that the company is stabilizing. The market cap remains modest at $2.2 billion, and the company is expected to generate significant free cash flow by 2028. The rollout of personalized nutrition offerings and increased digitization are expected to drive future growth.

BSD Analysis:
Herbalife's recent 20% stock jump indicates a positive market response to its improving financial health and strategic initiatives. The company's focus on debt reduction and product innovation, such as personalized nutrition, positions it well for future growth. Despite the stock's recent doubling, it remains undervalued given its potential for double-digit free cash flow yields. The market's previous skepticism, partly due to competition from weight loss drugs, seems to be waning as Herbalife demonstrates resilience and growth potential. Investors should consider the company's strategic moves and improving fundamentals as indicators of its long-term value.

Pitch Summary:
In the fourth quarter, we made a significant new investment in IHS Towers (IHS), a leading operator of telecommunications towers in emerging markets. While our exposure to emerging markets will always be limited, we see attractive potential in this recovery story—in an industry we have known for years. IHS is the 5th largest independent tower company in the world, operating approximately 37,000 towers across seven countries in Africa and Latin America. For details, please see our recent synopsis, IHS Towers: A Comeback Story for 2026.

BSD Analysis:
IHS Holding is currently at the center of a landmark $6.2 billion merger agreement with MTN Group, announced on February 17, 2026. Under the terms of the deal, shareholders will receive $8.50 per share in cash, representing a significant premium over recent trading levels. This transaction enables IHS to crystallize the value created during its recent strategic review, which included the divestment of non-core fiber and tower operations in Latin America. Upon completion in late 2026, IHS Towers will become a wholly owned subsidiary of MTN, consolidating Africa’s largest mobile network operator with its premier digital infrastructure platform. For current shareholders, this deal provides immediate liquidity and a successful exit from a volatile public market, while the combined entity is poised to dominate the African telecommunications landscape for the next decade.

Pitch Summary:
For the third year in a row, Talen Energy (TLN) was a major contributor to our results. Recall that Talen is an independent power producer (i.e., electricity) that owns the 2.5 GW Susquehanna nuclear facility in Pennsylvania. Since our profile of the company in mid-2023, Talen’s energetic management team has made great strides to enhance shareholder value. In 2025, Talen expanded its relationship with Amazon Web Services to provide carbon-free energy for data centers, and management announced a $3.8 billion acquisition of two gas-fired power plants. So, what’s next? From here, Talen could benefit from rising electricity demand and smart capital allocation. However, there is growing public backlash over utility bills, and in an election year, we expect this issue to feature prominently on state ballots in November. As always, we will monitor developments and act accordingly.

BSD Analysis:
Talen Energy is entering 2026 as a pivotal player in the high-stakes PJM capacity market, where prices for the 2026/2027 delivery year recently hit the regulatory cap of $329.17/MW-day. This 21% surge in capacity prices provides a massive revenue tailwind for Talen’s baseload generation assets, particularly its Susquehanna nuclear facility. The market tightness—driven by a 5 GW increase in power demand and lagging supply—has turned Talen into a mission-critical utility for reliability. Furthermore, the company’s strategic focus on colocated data center deals is gaining regulatory momentum as states reassess the auction system’s ability to incentivize new firm generation. With capacity prices pinned at the cap for the foreseeable future, Talen is well-positioned to deliver record free cash flow as it fuels the growing electricity requirements of the digital economy.

Pitch Summary:
Our top performer was Carvana (CVNA), a vertically integrated e-commerce platform that buys, reconditions, transports, finances, and sells used cars across the United States. By eliminating traditional physical dealerships (and associated costs), Carvana has become a low-cost provider of used vehicles. Buyers enjoy a "haggle-free" experience and the company’s vast nationwide inventory. We were attracted to Carvana as an investment for many reasons, not least its numerous competitive advantages in the enormous used-car industry. With a current market share of less than 2%, Carvana appears to have a long runway of profitable growth ahead.

BSD Analysis:
Carvana enters the first quarter of 2026 with significant momentum, recently reporting fiscal 2025 results that showcased a stunning 98% year-over-year gain in EPS. The company’s "transparency-led turnaround" is yieldiing fruit, as analysts highlight its ability to achieve greater profitability even as top-line growth moderates. Market share expansion is a key pillar for 2026, with consumer acceptance of online car buying increasing 1.5-fold in the latter half of 2025, potentially adding up to 4 million units to Carvana's addressable market. Despite a seasonal sequential revenue dip typical of the first quarter, the firm’s disciplined focus on GPU (Gross Profit per Unit) and operational efficiency has led to a consensus "Buy" rating. For investors, Carvana represents a high-conviction recovery story that is successfully transitioning from a high-growth disruptor to a structurally profitable industry leader.

Pitch Summary:
Flywire (FLYW) – new purchase Flywire provides payment software for business accounts receivable, with industry-specific software built on top of a proprietary payment network and payment platform. Its largest end market is Education, where it helps universities process cross-border tuition payments. It also has a Travel segment that enables payments for luxury tours and other events.

BSD Analysis:
Flywire Corporation is approaching a major financial milestone in 2026, entering the year near break-even as quarterly payments volume hits a record $9.3 billion. The company reported a 34% year-over-year revenue surge to $157.5 million for Q4 2025, driven by its dominance in high-stakes education and healthcare payments. Management provided an upbeat 2026 outlook on February 24, emphasizing its ability to maintain mid-30s growth while scaling its gross margins toward the 60% mark. Flywire’s specialized vertical focus allows it to capture complex, international payment flows that traditional fintechs struggle to manage. For investors, Flywire represents a high-growth, "software-plus-payments" play that is successfully proving its operational leverage as it transitions into a structurally profitable global platform.

Pitch Summary:
Remitly is capable of sustaining a mid-teens or higher growth rate while steadily expanding margins. The price doesn’t ask much, and it is beginning to show a clear focus on profits. Modest execution gives you a business earning well in excess of the current multiple, while the bear case means a structural break in a trend that has persisted for a decade. This is a company I suspect will improve over time, not deteriorate. The path to 20%-plus operating margins seems credible and not overly dependent on pricing power. A new customer typically generates gross profit in excess of the upfront cost in the first year and remains active for years, producing the 6x LTV/CAC the business has maintained to date.

BSD Analysis:
Remitly Global's stock rocketed 30% higher this week following an impressive fourth-quarter report that showed a shift toward GAAP profitability. The mobile remittance platform grew active customers by 19% and revenue by 26% year-over-year, demonstrating its ability to gain rapid market share from traditional incumbents. Management is guiding for up to 20% revenue growth in 2026 and has authorized an expanded share repurchase program to capitalize on its "cheap" 10x adjusted earnings multiple. Analysts are bullish on Remitly's operating leverage, noting that its marketing and product development investments are beginning to yield substantial profit gains at scale. With a market cap still under $4 billion and consistent double-digit growth, the company is a premier "small-cap gem" in the fintech sector.

Pitch Summary:
Thryv is a different story. I own it because I think the market is mispricing the immediate cash flows, and I have confidence in management. To be clear, this is not some mission-critical vertical software business. It’s a marketing tool, a fairly undifferentiated product selling into a high churn end market, with slow organic growth and the looming threat of AI ahead. Still, the valuation is hard to reconcile; the company should produce more cash in the next five years than the current enterprise value. The bet is simple: if Thryv can get reasonably close to its 2030 ambition of $1 billion in SaaS revenue, the equity has room for something on the order of an 8x return. $800 million of SaaS revenue in 2030 requires a ~12% CAGR from 2025. The math works if cash flow takes down the debt, and the pure SaaS business reaches a 2x revenue multiple (or roughly 10% free cash flow yield for a business that should run 20% margins, without the egregious stock-based compensation at many other software companies). I don’t think that’s a far-fetched outcome, and that type of potential reward justifies taking some risk.

BSD Analysis:
Thryv Holdings enters 2026 with cautious optimism, as its recent survey of small businesses reveals a mix of hope and hesitation regarding growth and employment costs. The company is successfully pivoting its marketing platform toward AI-enabled solutions, specifically targeting home services businesses to drive operational efficiency. While many SMBs remain unsure about the economy, Thryv is leveraging this uncertainty to position its technology as an essential tool for turning "cautious optimism into success." The firm's focus on high-margin SaaS revenue and its recent expansion of marketing software are intended to drive shareholder value through the mid-term. As small businesses increasingly adopt technology to combat rising costs, Thryv's role as a primary digital enabler provides a stable growth runway.

Pitch Summary:
I think the calculus looks a lot different at 22x revenue than 2x revenue. I think we’ve seen a huge chunk of returns in a very short period. I think the market was too pessimistic before, and maybe too optimistic today. Today, everyone buys the space stock glory, views Planet as an AI winner, and has high confidence in the company’s ability to capture a large market. I’ve been thinking along those lines for a few years and think Planet is a generational business. But price is important, and the current price calls for a reassessment of the argument. Nothing is a guarantee in this game, which presents a challenging question: do I sell a winner, a company I still believe in for the long run, strictly because of valuation? Druck’s game is not my game – trading, timing the market and such – but I do believe in being opportunistic. At times, that can mean shortening my time horizon; an excessive price can be just as damaging to long run results as selling too early, and while my confidence in Planet’s business and prospects has strengthened over the past year, my argument has diminished. I expect lower returns looking forward, but I still want outsized exposure over the long run.

BSD Analysis:
Planet Labs is currently navigating a "growth versus profitability" narrative, reporting strong Q3 2026 revenue of $81.3 million but continuing to post quarterly losses. Supporters point to a transition toward solution-based revenue and major long-term contracts, such as the $230 million JSAT deal, as the eventual path to positive margins. While the top line is growing at a 20% annual clip, bears remain cautious about the stubbornly negative earnings and the high 19x sales multiple. Management is betting heavily on its AI-enabled satellite offerings to accelerate data monetization and drive margins toward industry levels by 2028. For high-risk investors, Planet Labs offers a unique play on the "New Space" economy, but its premium valuation leaves little room for execution missteps.