Investment Pitches

Pitch Summary:
@ScorpionFund argues the bear case on TransMedics hinges on growth stalling just as the market is paying a premium multiple for continued acceleration. They point to quarterly revenue flattening and suggest near-term tracking implies the company may struggle to meet consensus expectations, undermining the momentum narrative. A key concern is management’s reluctance to provide clear forward guidance, which the author frames as inconsistent with a business entering a durable next leg of growth. The post also challenges the credibility of Europe—especially Italy—as a meaningful incremental growth driver, positioning it as narrative management rather than a scalable opportunity. They highlight reimbursement dynamics as central to the U.S. model and suggest those economics may not translate internationally. The author expects competitive alternatives and price pressure to compress economics over time, making today’s valuation vulnerable. Overall, the pitch is bearish because the setup combines decelerating fundamentals with a valuation that assumes the opposite.

BSD Analysis:
The crux is whether TransMedics is a differentiated platform with durable pricing power or a high-priced workflow solution destined to normalize as competition and procurement discipline mature. In medtech “razor/razorblade” analogs, the market eventually forces price-to-value alignment once multiple clinically acceptable options exist and hospitals gain negotiating leverage. If transplant centers can replicate outcomes with lower-cost perfusion/adjacent protocols, the long-run margin structure compresses regardless of near-term adoption momentum. The Europe discussion matters less as a geography call and more as a signal: when domestic growth slows, management often leans on “white space” narratives that may be structurally uneconomic. The key diligence items are (1) defensibility of clinical outcomes vs alternatives, (2) customer switching costs embedded in logistics/service layers, and (3) reimbursement sustainability as payers and regulators scrutinize total episode cost. A plateauing growth profile would force the stock to re-rate toward mature medtech multiples, where downside is driven more by multiple compression than near-term EPS. Conversely, a true moat would show up in sustained volume growth plus stable unit economics even as competitors enter.

Actual Post Content:
$TMDX TransMedics. The Q3 earnings call and revenue miss suggest the joyride is coming to an end. 1. The company is already ex-growth on a sequential basis, an inconvenient fact at this extreme valuation. Q1 revenue $144MM, Q2 $157MM, Q3 $144MM. Q4, by our estimate, is currently trending to $150MM. Daily flights data suggests to us that the company is struggling to hit the $156MM estimate for Q4, which is by no means guaranteed. The combination of sequentially flat quarters and an extreme valuation (13X LTM product revenue) reminds us of our BLI short several years ago (-97% or so thereafter); and NVRO (-98%), which was covered by two of the same medtech analysts now gushing about TMDX. 2. The highlight of the call was the CEO's weak, hedged answer when asked about the 2026 guide, which leads us to think the company is about to go ex-growth on a year-over-year basis as well - "...2026, which we fully expect to be a growth year for TransMedics over 2025..." Currently it has the benefit of lapping exceptionally weak quarters a year ago when the stock collapsed. The market expects $727MM revenue in FY26, which strikes us as delusional given the last 3 quarters. The Q1 2026 estimate is >$170MM - good luck! The company issued informal FY25 guidance in early Dec last year at its investor day, but the CEO punted on the question today: "...we plan to issue our guidance for 2026 at our next earnings call. I think 2025, our focus right now is to end 2025 strong and achieve our stated guidance. And then, that gives us time to evaluate our initiatives, the clinical programs that are underway, then we will issue guidance for 2026, which we fully expect to be a growth year for TransMedics over 2025, but allow us the time to state our 2026 expectations with the benefit of finishing the year and adding these data points that will be crucial to providing guidance for the full year 2026." (Source: Capital IQ earnings call transcript) 3. The other key takeaway of the call was the constant redirection and deflection to Europe as the next growth opportunity, Italy in particular (where we understand NRP to already be mandatory for DCD, thus making this notion bizarre). We count 20 mentions of Italy in the call transcript. Shitcos frequently seem to look for other carrots to dangle in front of the horse, no matter how preposterous, as their core business begins to hit the wall. US medtech schemes are often creatures of CMS reimbursement loopholes and abuses, which don't exist abroad. In our opinion, TMDX is the outcome of perverse incentives created by the CMS standard acquisition charge/cost report system for organ transplantation. We think this loophole is already in the crosshairs in the US. Given the lack of these perverse reimbursement incentives abroad, we think TMDX has no meaningful EU opportunity, especially since NRP is already mandated in various countries - a mere $3K alternative and a small fraction of TMDX device cost. As an aside, a cursory review suggests that some centers in Italy do use machine perfusion in combination with NRP, but these studies reference the VitaSmart perfusion system, which we understand to be only $5K and indicative of what EU centers are willing to pay for machine perfusion. That system is already extensively used in Europe, which helps explain TMDX's absence of meaningful revenue there. We hear it's on the cusp of FDA approval (early Q1), which we expect to accelerate TMDX share loss on the heels of OrganOx’s ongoing rollout. Machine perfusion is a commodity, and we see no reason why the price wouldn't trend to $3K to $5K over time, as in Europe - versus TMDX at an unsustainable $60-90K, by our estimates and research. Disclosure - We remain short TransMedics. Please refer to the disclosures in our Jan 10, 2025 report which this post incorporates fully by reference and may be downloaded at http://scorpioncapital.com.

URL: https://x.com/ScorpionFund/status/1983889635274076371

Pitch Summary:
@finance_schmidt characterizes Imdex’s update as mixed but ultimately constructive. On the positive side, the likelihood of utilizing tax losses as planned has improved, supporting future earnings quality. ADT Guard is highlighted as a key bright spot, with management reportedly seeing much stronger unit economics than previously expected. Guidance appears to be tracking market expectations, with brokers pointing toward roughly $46m in EBITDA. The main concern raised is weak cash flow, although this is framed as largely seasonal and driven by working capital timing rather than structural weakness. Overall, the tone leans cautiously bullish, with operational execution offsetting near-term cash flow noise.

BSD Analysis:
This update reinforces that the core investment debate around Imdex is shifting from strategic direction to execution and cash conversion. Improving unit economics at ADT Guard suggest the acquisition strategy can generate real operating leverage if volumes scale as expected. The NOL utilization point matters because it effectively boosts free cash flow and equity value without incremental operational risk. Weak cash flow is a legitimate watch item, but seasonality and post-acquisition working capital swings are common in roll-up style models. The more important question is whether normalized cash generation converges toward EBITDA over the next 12–18 months. If so, leverage concerns should fade and valuation support strengthens meaningfully.

Actual Post Content:
$IMB.AX as usual, a mixed bag Pros: • NOL utilization now more likely than not to proceed as planned • ADT Guard reportedly performing well with much stronger unit economics • Guidance aligns with market expectations (latest broker note pointed to ~$46m EBITDA) Cons: • Weak cash flow, though arguably not a major concern given expected seasonality and working capital impact. Cash position already recovered above pre-acquisition levels after the recent $4.2m deal.

URL: https://x.com/finance_schmidt/status/1984013175877202260

Pitch Summary:
Cigna is argued to be undervalued largely because its PBM business has historically dragged down the company’s overall multiple despite robust long-term EPS growth. Management has announced a structural shift away from the traditional rebate model toward a transparent fee-based PBM offering, which will require substantial investment in 2026–2027 and temporarily reduce segment profitability. Contract extensions with the three largest PBM customers to 2030 provide improved certainty around future revenue and reduce perceived regulatory risk. Meanwhile, the company’s health insurance and specialty care segments—representing 70% of the business—are expected to offset PBM weakness, allowing consolidated EPS to continue growing in 2026. As PBM cash flows stabilize and margins return to historical norms, the pitch argues that investors should apply a higher valuation multiple than the sub-10x levels seen historically. With peers trading between 12x and 20x forward earnings and Cigna’s Medicare-free insurance portfolio offering relative stability, the author believes a re-rating is justified. Using $30 EPS and a 13x multiple, the pitch arrives at a $390 price target, implying more than 50% upside.

BSD Analysis:
Cigna presents an interesting rerating setup driven by structural changes to the PBM model that may ultimately align the business with regulatory trends rather than fighting them. The shift to a transparent fee-based PBM structure reduces headline risk and could help normalize investor perception of the segment, historically the biggest valuation overhang. Long-dated customer renewals create cash flow visibility while the core insurance franchise—absent Medicare/Medicaid exposure—adds defensive stability. If PBM margins recover post-investment, a broader sector-like multiple becomes plausible given peers’ 12–20x ranges. However, execution risk around transitioning PBM operations is material, and the industry as a whole may experience long-term margin compression as transparency increases. The company’s ability to maintain client retention and manage operating leverage during the transition will be crucial. Still, the multi-year path back to double-digit EPS growth and the potential for multiple expansion make the risk/reward profile attractive if management delivers against guidance.```

Actual Post Content:
Bought $CI today @ ~$261. I managed to make a quick +18% over a couple of months in early in '25. Will a 2nd bite at the 🍎 be as sweet? Stock -17% today after mgmt unveiled new strategy for PBM segment. I see it as a +ive but podshop bros don't agree. Thread 🧵 (1/n) Company: $CI has 3 businesses. Health insurer (~40% of biz), Specialty & Care (~30%) and PBM (~30%). Co has historically traded at a discount to peers because of its PBM segment. It's a favorite punching bag for politicians looking for someone to blame for high drug prices. PBM segment's regulatory risk has been a millstone on $CI's valuation. Despite growing EPS at a 13% CAGR over 10 yrs, it has traded

Pitch Summary:
Topicus and Lumine are two Canadian companies that specialise in acquiring small, mission-critical software platforms. Both are performing well and had been excellent investments for the Fund up until the shock announcement that the founder and CEO of Constellation Software, the majority owner of both Topicus and Lumine, would be retiring on health grounds. Shares in Constellation, Topicus and Lumine were all hit on the news. We feel that the sell-off is overdone and have been adding to both positions on weakness.

BSD Analysis:
Lumine focuses on communications and media software assets carved out of Constellation Software. These businesses benefit from sticky customers and high switching costs, but operate in slowly growing end markets. Cash flows are durable, though not exciting. The challenge is finding enough accretive acquisitions within a narrow vertical. Execution quality matters more than innovation. Pricing power exists, but growth is incremental. The market prices Lumine on trust in capital discipline rather than upside optionality. Any drift toward growth-for-growth’s sake would be punished. Lumine is about compounding quietly, not changing narratives.

Pitch Summary:
Topicus and Lumine are two Canadian companies that specialise in acquiring small, mission-critical software platforms. Both are performing well and had been excellent investments for the Fund up until the shock announcement that the founder and CEO of Constellation Software, the majority owner of both Topicus and Lumine, would be retiring on health grounds. Shares in Constellation, Topicus and Lumine were all hit on the news. We feel that the sell-off is overdone and have been adding to both positions on weakness.

BSD Analysis:
Topicus is a European vertical market software compounder spun from Constellation Software’s playbook. It targets mission-critical software with high switching costs and low customer churn. Capital allocation discipline is the real product, not the software itself. Growth relies on repeatable small acquisitions rather than organic acceleration. As the base grows, maintaining acquisition quality becomes harder. Decentralization protects margins but limits operational synergies. The stock often trades as a proxy for Constellation quality, which sets a high bar. The bear case is multiple compression if growth slows. Topicus rewards patience and penalizes short-termism.

Pitch Summary:
Judges Scientific: we have been admirers of Judges, the acquirer of niche scientific instrument businesses, since we first met their founder and CEO, David Cicurel, back in 2019. Judges have been going through a rough patch, caused chiefly by Donald Trump slashing funding to scientific institutions. We have met with the management team of Judges several times this year and are monitoring the situation closely.

BSD Analysis:
Judges Scientific is a quiet roll-up of niche scientific instrument businesses with extreme customer stickiness. Its moat comes from technical specificity, long product lifecycles, and academic inertia. Growth is driven by bolt-on acquisitions and modest organic expansion. The risk is classic roll-up fatigue: overpaying or integrating poorly as scale increases. End markets are defensive but not immune to research funding cycles. Pricing power exists, but volume growth is incremental. Cash conversion is strong, supporting dividends and reinvestment. The valuation embeds trust in management discipline. Judges works because it avoids excitement—and excitement usually destroys returns.

Pitch Summary:
Cicor: we first came across Swiss-listed Cicor when they acquired the defence assets of UK-based TT Electronics at a bargain price – we have been complaining about enterprising foreign buyers exploiting the UK’s unpopularity to pick up strong assets on the cheap since 2016. If one can’t beat them join them! We recently met with their CEO, Alexander Hagemann, and were struck with his energy and particularly liked the new exposure to increased European defence spending that Cicor brings – sadly, a big growth area.

BSD Analysis:
Cicor is a European EMS player benefiting from reshoring, defense spending, and supply-chain de-risking. Its value proposition is reliability and proximity rather than lowest-cost manufacturing. Margin expansion depends on mix shift toward high-reliability and regulated end markets. Acquisitions drive growth, which raises integration and execution risk. Scale improves bargaining power but also complexity. The company sits in a sweet spot for customers who cannot tolerate disruption. The bear case is cyclical destocking and pricing pressure from Asian competitors. The bull case is sustained demand for secure, regional manufacturing. Cicor is a geopolitical hedge disguised as an industrial.

Pitch Summary:
Perimeter Solutions: are the lead supplier of wildfire retardants in California. They have an all-star board including Nick Howley (founder of TransDigm and no relation of the Welsh rugby legend Rob Howley) and William Thorndyke (author of The Outsiders and a brilliant investor in his own right), who have set out to double the size of the business every five years.

BSD Analysis:
Perimeter Solutions sells fire retardants and safety products into an end market that is tragically growing. Wildfire intensity and frequency are secular tailwinds, not cyclical noise. The business benefits from regulatory mandates and mission-critical demand, supporting pricing power. Earnings are lumpy due to seasonality, which the market often misreads as structural volatility. Capital intensity is manageable, but operational execution during peak fire seasons is crucial. The bear case centers on normalization of fire seasons and political pressure on chemical usage. Litigation and environmental scrutiny are non-trivial risks. The bull case is infrastructure-like demand with improving margins. Perimeter is an uncomfortable but rational climate-adaptation investment.

Pitch Summary:
Hikari Tsushin: invests in consumer-facing businesses in Japan, from energy suppliers to insurance brokers. It was founded by Yasumitsu Shigeta in the 1990s when he was just 22 years old and today he remains Chairman and the largest shareholder. Hikari has delivered stellar shareholder returns since the early-2000s and there is plenty more to go for.

BSD Analysis:
Hikari Tsushin is a misunderstood Japanese compounder built on aggressive sales execution and relentless cost discipline. The company operates like a distribution machine, monetizing telecom, energy, insurance, and SME services through a vast sales network. Its reputation for hard-nosed tactics obscures the reality of strong cash generation and disciplined capital allocation. Growth is not glamorous, but returns are driven by repeatable economics rather than innovation risk. The model thrives in fragmented, inefficient markets where switching costs are behavioral rather than contractual. Regulatory scrutiny and reputational risk are constant overhangs, especially outside Japan. Capital returns have been shareholder-friendly, reinforcing the compounding story. The bear case is saturation of addressable SMEs and rising compliance friction. Hikari works because it optimizes incentives ruthlessly, not because it reinvents industries.

Pitch Summary:
OTC Markets Group operates U.S. OTC trading infrastructure and monetizes it through three segments: OTC Link (trading services), Market Data Licensing, and Corporate Services subscriptions. Despite historically high ROIC and durable margins, the stock is perceived as low/no growth due to a modest decline in legacy corporate subscribers. The pitch argues this view is wrong and that a revenue/earnings re-acceleration is already “baked” into near-term results, supported by real-time segment-level indicators and subscription signups. Key drivers include (1) Market Data Licensing price increases effective Jan 1, 2025 with limited attrition, (2) Corporate Services monetization from the new paid OTCID tier launched Jul 1, 2025 to convert free-rider issuers into paying customers, and (3) potential incremental contributions from overnight trading initiatives. The business is largely recurring (~80%+) with a mostly fixed cost base, creating operating leverage into Q3/Q4 prints. The author estimates ~12% YoY revenue growth and ~20%+ operating earnings growth near term and targets ~30–50% IRR through YE26 as the market re-rates once growth is visible. Risks include volume sensitivity in OTC Link, competitive/structural limits to overnight trading economics, and slower-than-expected OTCID uptake, but the setup is framed as a misperception-driven rerating with measurable lead indicators.

BSD Analysis:
OTCM is a "hidden-in-plain-sight" monopoly. the decline in US-listed companies hurts OTCM; in reality, Corporate Services subscribers are growing +8% CAGR because international firms (80% of volume) are desperate for US investor exposure via OTC. The OTCID launch is a masterclass in "free-rider" monetization. Market Data Licensing has immense untapped pricing power; management just realized they were subsidizing Bloomberg/LSEG margins and started regular hikes. With headcount actually reducing, the incremental dollar is almost 100% margin. This is a high-performance engine that just shifted from neutral into third gear. The tight 21-27x LTM P/E range provides a reliable exit valuation anchor.

Pitch Summary:
International Personal Finance is a UK-listed subprime consumer lender operating across Europe and Mexico, currently in an advanced take-private process that the market continues to discount. BasePoint Capital has submitted a non-binding all-cash proposal at 235p per share, raised from 220p following due diligence, with the board stating it would recommend the offer if a firm bid is made. The PUSU deadline has been extended to 19 November, signaling ongoing engagement rather than a stalled process. Despite this, the shares trade roughly 13% below the proposal, implying a low probability of completion. The author argues this skepticism is misplaced given completed diligence, a price increase post-DD, and a credible financial sponsor. Importantly, recent trading has been solid, with customer numbers up 2.3% year over year and lending/receivables up 14%, suggesting downside is overstated even if the deal were to fail. The setup is therefore framed as an asymmetric event-driven opportunity with limited fundamental deterioration risk.

BSD Analysis:
deal risk is binary and financing uncertain, justifying a wide spread. The market is missing that diligence is complete, financing sources are credible, and activist risk has already cleared. Valuation implies sub-50% completion probability, which appears mispriced given process maturity. Governance alignment favors completion. Position sizing reflects deal-risk discipline. The thesis breaks if financing collapses or regulatory timelines slip materially.

Pitch Summary:
The pitch frames SJT as a passive royalty trust that distributes essentially all net proceeds from a 75% royalty interest in San Juan Basin oil & gas properties, with ~97% of revenue tied to natural gas. Distributions stopped in 2024 because Hilcorp’s large capital program created “excess production costs” that must be earned back before cash can be paid out again. The core catalyst is an expected restart of monthly distributions once the deficit and required cash reserve are rebuilt, with the author estimating resumption in early 2026 under reasonable gas price and capital-charge assumptions. Recent drilling and workovers have lifted volumes, helping accelerate the earn-back period. After distributions resume, the trust can offer an attractive yield at current gas prices with leveraged upside to higher realized basin pricing. Longer-term optionality comes from potential tightening in US gas supply/demand driven by LNG export capacity growth and incremental power demand (including data centers), while associated-gas growth may slow if oil activity cools. Main risks are another large Hilcorp capex program, warm weather, and a scenario where incremental AI/LNG demand disappoints.

BSD Analysis:
The setup is essentially a “distribution restart” special situation layered on top of a long-duration gas-price option. The trust structure is simple and cash-pass-through, so once the excess-cost overhang clears, the equity should re-anchor to a yield-driven valuation tied to realized basin pricing and volumes. The key analytical fulcrum is timing and magnitude of the earn-back, which depends on Hilcorp’s ongoing capital charges and local differentials—not just Henry Hub. The bull case doesn’t require a big gas rally; it requires normalization of distributions and no repeat of a large capex shock that would again subordinate unitholders to development spend. Optionality exists if LNG buildout and incremental power demand tighten the market, but that’s upside rather than the base case. The primary downside is that trusts can look “cheap” right up until operators decide to reinvest heavily again, resetting the deficit clock. If distributions resume as expected and remain steady, SJT can screen like a high-yield gas royalty with embedded cyclicality.

Pitch Summary:
Full Truck Alliance is pitched as China’s dominant digital freight marketplace with ~70% share of the online segment, while online penetration is still under 10% of a massive RMB ~5.5tn “true TAM” (spot + contracted road freight). The thesis is that trucking in China remains inefficient and intermediary-heavy, and FTA’s platform improves price transparency, reduces empty miles/idle time for drivers, and lowers shippers’ costs via direct matching. The company’s scale and route density create strong network effects that competitors struggle to replicate nationally. Management is intentionally shifting the revenue mix away from low-margin, VAT-refund-dependent freight brokerage and toward higher-margin transaction commissions, driving margin inflection. Value-added services (credit/insurance/etc.) increase stickiness, though credit is expected to be managed conservatively due to regulatory tightening. Valuation is described as reasonable rather than “deep value,” but earnings power is expected to compound as mix improves and operating leverage persists. Key risks are China macro weakness, regulatory actions (VAT rebates / take-rate caps / lending APR caps), and unexpected aggressive competition.

BSD Analysis:
Fundamentally this is a “platform penetration + mix shift” story: the market is underappreciating how early online freight is in China, and how dominant scale players can keep taking share as penetration rises. The real edge in the pitch is the margin structure—de-emphasizing brokerage (optically large revenue, economically thin) and leaning into commissions turns the P&L from GMV vanity to high-quality take-rate economics. The network effect argument is credible because national route liquidity is hard to bootstrap, and FTA already has the dense two-sided marketplace. The regulatory overhang is non-trivial (VAT rebate tightening, APR caps on credit), but management is proactively shrinking/reshaping those exposed lines, which ironically could improve the durability of earnings. The bull case depends on shippers continuing to adopt the platform for incremental/spot needs rather than reverting to in-house or contracted logistics, and on commission expansion not triggering policy backlash. If China freight volumes remain resilient and commission coverage plus direct-shipper mix improves, the market can re-rate the quality of earnings even if headline revenue growth slows.

Pitch Summary:
We started this year with IVFH as a top five position, and with the benefit of hindsight, should have taken more profits above $2.00/share as the valuation became quite stretched. We have officially round tripped most of our investment, which has disappointed both from a business perspective and share price perspective. Like Sylogist, I believe there is a fairly easy path to a positive outcome within the next few quarters. The Board agrees, and during the quarter, instituted a management change, which should prove a net positive, as IVFH will now redirect resources to their core specialty food business. If management’s efforts in this area return stability and/or growth to the drop-ship business, historically a 20% grower, there is significant upside to today’s price.

BSD Analysis:
The manager remains optimistic about IVFH’s turnaround potential, emphasizing operational refocus on its high-margin specialty segment. The recent leadership change could stabilize execution, and the firm’s online direct-to-chef distribution model remains a niche growth play. At under $1 per share, the market implies minimal recovery; normalization to historical margins could double equity value. Balance sheet risk is moderate, making this an asymmetric opportunity for patient investors.

Pitch Summary:
Shares of Sylogist declined significantly following less than stellar Q2 results and a reduced FY25 outlook that came as unexpected. This was in direct opposition to management’s bullishness following Q1 results and after years of strong business execution. Many of the near-term issues are timing related as opposed to structural or competitive issues, but some additional hiccups were revealed in Q2 that changed my estimate of the forward return profile and risk/reward. As a result, I reduced our position as I no longer feel Sylogist meets the requirement for a top five holding, where it’s been for over three years. All is not lost for the business, which is why we have not exited completely, and I believe there is still a path to a very positive return moving forward, but my conviction level and compared to the risk/rewards elsewhere in our portfolio necessitated action on my part.

BSD Analysis:
Issuer’s weaker FY25 outlook and internal execution challenges justify a cautious stance. While Sylogist maintains recurring revenues and strong cash flow generation, growth deceleration and mixed communication from management raise red flags. Trading near 9x forward EV/EBITDA and yielding over 4%, the stock offers value if execution improves, but earnings consistency remains key. The reduction in position reflects a pragmatic reallocation toward higher-IRR opportunities, suggesting limited near-term catalysts.

Pitch Summary:
CD Projekt, our third-largest contributor since inception and still a top-three position, exemplifies what we’re finding offshore: quality businesses undergoing structural transformations that create significant mispricings. The company has historically been constrained by single-track game development, which capped reinvestment opportunities despite exceptional returns. With the transition to dual-track AAA production—Witcher 4 and Cyberpunk 2—and incremental projects through 2035, CD Projekt is moving from a cyclical hitmaker to a steady-state compounder. Margins remain among the highest in the industry (~39%), supported by a robust back catalogue and disciplined capital deployment. The shift to Unreal Engine 5 improves efficiency and scalability while reducing development risk. Dual AAA pipelines and geographic expansion to the U.S. diversify execution risk. We believe CD Projekt can now deploy capital at high returns across multiple projects, transforming the business from cyclical to compounding.

BSD Analysis:
CD Projekt’s multi-track model unlocks capital efficiency and growth durability. With 5 projects in the pipeline and strong IP in Witcher/Cyberpunk, earnings visibility improves substantially. Margins may compress modestly but remain elite. Valuation at ~7B USD versus peers suggests re-rating potential as execution proves out. Unreal 5 transition, external partnerships, and geographic diversification de-risk development cycles.

Pitch Summary:
I remain extremely bullish on our portfolio. Our gold mining equities remain very undervalued, and gold prices should skyrocket when the US superbubble inevitably bursts. For more information, please see my recent letters and interviews.

BSD Analysis:
The manager’s conviction in gold miners stems from macro dislocation risk and undervaluation relative to bullion. With global central banks accumulating gold and miners trading at ~0.8x NAV and 8–10x cash flow, upside could be material if real yields compress. Balance sheets are lean, and capital discipline remains high. The position serves as both a defensive inflation hedge and leveraged play on gold price appreciation.

Pitch Summary:
Lear was a contributor this quarter as shares rose following the announcement of a multi-year supply agreement with a leading EV manufacturer. The company’s Electrical Distribution Systems segment posted record revenue and backlog growth, offsetting softness in seating volumes. Management reiterated its long-term operating margin targets and capital return plans. We believe Lear remains undervalued relative to its strong free cash flow profile and exposure to secular electrification trends.

BSD Analysis:
Kennedy’s thesis emphasizes Lear’s transition to high-value electrical content and software integration. EV penetration and cost efficiencies enhance earnings visibility. At ~9x forward earnings and a 2% dividend yield, the risk/reward remains attractive.

Pitch Summary:
Rogers Corporation was a top contributor during the quarter as the company continued to benefit from robust demand for its advanced materials used in electric vehicles and high-frequency communications. The stock rallied following better-than-expected quarterly results driven by margin expansion and cost controls. Management raised full-year guidance citing stronger automotive and industrial end markets. We continue to view Rogers as well-positioned to capitalize on structural growth in EV adoption and 5G infrastructure buildouts.

BSD Analysis:
Kennedy Capital sees Rogers as a high-quality mid-cap materials play with cyclical tailwinds in EVs and communications. Trading near 13x forward EBITDA, the firm’s operational leverage and innovation pipeline provide upside. ROIC improvement and resilient margins justify continued bullishness amid secular demand for advanced materials.

Pitch Summary:
Siemens Energy, a leading gas-turbine manufacturer, is well placed to benefit from rising power demand. AI data centers are driving a step-up in electricity consumption and, given extended grid-connection timelines, gas turbines are uniquely positioned to meet this need through rapid deployment, low execution risk, and reliable output. Beyond AI demand, there are additional structural drivers including coal-to-gas transitions, renewables intermittency support, and load growth tied to EV adoption and reshoring.

BSD Analysis:
Stenham highlights Siemens Energy as an overlooked beneficiary of AI infrastructure growth and electrification. With an improving order backlog and margin recovery trajectory, valuation at ~8x EBITDA offers deep value amid secular power demand.