Investment Pitches

Pitch Summary:
Hertz experienced volatility during the period due to fleet strategy adjustments and electric vehicle residual value pressures. Management has taken steps to rationalize fleet composition and improve utilization rates. We believe operational improvements and disciplined capital allocation can restore profitability over time.

BSD Analysis:
Hertz Global Holdings is in the midst of a multi-year technology transformation and fleet refresh, aiming to stabilize its margins after a period of significant operational volatility. The company is partnering with Kyndryl to modernize its infrastructure and is focusing on high-utilization airport and off-airport rentals to drive EBITDA recovery. Analyst sentiment remains neutral, with a "Hold" consensus reflecting concerns about the company’s negative profit margins and the ongoing pressure on used vehicle pricing. Management’s 2026 targets focus on reducing leverage and improving return on equity through disciplined fleet management and a more diverse range of electric and internal combustion vehicle offerings. While the stock currently implies some upside to median price targets, it remains a speculative turnaround play that depends heavily on the successful execution of its technology and fleet optimization strategies.

Pitch Summary:
Fannie Mae remains a core position reflecting our view that the company’s earnings power and capital accumulation meaningfully exceed its current market valuation. Credit performance has remained resilient, and retained earnings continue to build capital. We believe long-term reform of the housing finance system could unlock substantial value for shareholders.

BSD Analysis:
Fannie Mae continues to operate in a complex regulatory limbo, but its 2026 outlook is supported by a robust recovery in the secondary mortgage market as housing activity stabilizes. The company remains a critical source of liquidity for U.S. residential finance, benefiting from a "run it hot" economic environment that favors growth-positive policies and a resilient labor market. While the stock remains an OTC play with significant legislative uncertainty, institutional interest is bolstered by the firm’s strong credit quality and the administration's desire for a stable housing market. Analysts are increasingly viewing Fannie Mae and Freddie Mac as beneficiaries of potential structural reforms that could eventually lead to an exit from conservatorship. For now, the company offers a unique, high-beta exposure to the macro-housing cycle and the evolving landscape of government-sponsored enterprise reform.

Pitch Summary:
Brookfield benefited from improving fundraising trends and realization activity across its private funds. Management continues to recycle capital into higher-return opportunities while maintaining a strong balance sheet. The company’s exposure to real assets and long-duration infrastructure provides inflation protection and stable fee-related earnings growth.

BSD Analysis:
Brookfield is capitalizing on a once-in-a-generation investment supercycle in 2026, driven by the massive infrastructure requirements of the AI revolution and the global transition to clean energy. The company is leveraging its one trillion dollar asset base to meet explosive demand for data centers and renewables, with its 2026 outlook highlighting grid modernization and "behind-the-meter" generation as primary growth catalysts. Management expects to maintain a 28 percent compound annual growth rate in distributable earnings, fueled by its expanding Wealth Solutions business and a shift toward business transformation in its private equity arm. While high-interest rates remain a factor, Brookfield’s disciplined capital recycling and focus on inflation-indexed revenue streams provide a resilient floor for total returns. As institutional allocations to infrastructure and credit continue to rise, Brookfield’s role as a premier global owner-operator makes it a top-tier pick for the current structural shift in the global economy.

Pitch Summary:
Amazon continued to demonstrate operating leverage across its North American retail segment and AWS cloud platform. Cost rationalization initiatives and logistics efficiencies drove margin expansion, while AWS growth reaccelerated amid enterprise AI adoption. The advertising segment also contributed meaningfully to profitability. We believe Amazon’s diversified earnings streams and scale advantages provide substantial long-term upside.

BSD Analysis:
Amazon is positioning 2026 as a major rebound year, as the massive capital constraints that previously limited AWS capacity give way to a fresh 200 billion dollar investment cycle. Analysts project that AWS revenue will maintain a 23 percent growth rate, potentially reaching a 250 billion dollar annual run rate as the company’s custom Trainium and Neuron chips gain widespread enterprise adoption. In the retail segment, profit margins for North American operations have hit record highs near 10 percent, driven by the expansion of high-margin advertising and subscription services that now contribute billions to the bottom line. Although the heavy infrastructure spending has temporarily pressured free cash flow, the company’s long-term backlog of 244 billion dollars provides high visibility into future earnings. As "Agentic Commerce" tools like Rufus and Alexa+ begin to drive a 400 billion dollar potential market by 2030, Amazon’s valuation appears increasingly attractive relative to its long-term profit-generating power.

Pitch Summary:
Alphabet delivered strong operating performance supported by resilient search trends and accelerating growth in Google Cloud. The company’s AI initiatives, including Gemini, are enhancing user engagement and expanding monetization opportunities across products. While competitive dynamics in search have intensified, we believe Alphabet’s distribution advantages and data scale remain unmatched. Continued capital allocation discipline and share repurchases further support per-share value creation.

BSD Analysis:
Alphabet is entering 2026 with a clear focus on agentic commerce, leveraging its Gemini AI models to transform Search from a directory of links into a transactional engine where users can complete purchases directly. The company’s Google Cloud division has reached a massive inflection point, exiting the previous year with a 240 billion dollar backlog and generating revenue at a nearly 50 percent annual growth rate. To sustain this momentum, management is committing up to 185 billion dollars in capital expenditure this year, a move supported by a record-breaking 20 billion dollar bond issuance specifically for AI and cloud infrastructure. While these investments may create near-term margin pressure from depreciation, Alphabet’s proprietary TPU and Axion chips provide a critical cost advantage that is increasingly unmatched by its peers. With a dominant 90 percent share of global search and a rapidly scaling enterprise AI business, Alphabet remains the foundational utility of the digital economy.

Pitch Summary:
Meta Platforms was a significant contributor to performance during the year. The company delivered strong revenue growth driven by improving advertising demand and enhanced ad targeting powered by artificial intelligence. Management’s disciplined expense control and operating leverage resulted in expanding margins and robust free cash flow generation. The market’s earlier concerns regarding heavy investment in AI infrastructure and the metaverse have moderated as returns on these investments have become more visible. We continue to believe Meta’s scale, network effects, and AI capabilities position it well for sustained growth in digital advertising and adjacent services.

BSD Analysis:
Meta is executing a massive AI acceleration in 2026, with a capital expenditure budget projected between 115 billion and 135 billion dollars to build out foundational "superintelligence" infrastructure. This aggressive spending is being met with record financial performance, as revenue growth at the start of the year maintains a robust 30 percent trajectory supported by AI-driven ad personalization and high engagement across the Family of Apps. The company’s multi-generational partnership with NVIDIA to deploy millions of next-generation GPUs underscores its commitment to leading the frontier of both training and inference. While the market remains sensitive to the rising operating expenses, Meta’s operating margins remain exceptionally healthy at over 40 percent, providing the cash flow needed to fund its massive R&D without diluting its 70 billion dollar buyback program. As the first major LLM models from its Superintelligence team begin to roll out this spring, Meta is uniquely positioned to own the application layer of the generative AI era.

Pitch Summary:
We appreciate our engagement with you over the past year, during which time Riot Platforms, Inc. (“Riot” or the “Company”) has begun a meaningful transformation. Just over one year ago, Riot launched its high-performance computing and artificial intelligence (“AI/HPC”) data center strategy. Over the same period, Riot has taken steps to begin improving its corporate governance and reducing expenses. While, of course, improving governance and managing expenses is critically important with still more work to be done, we, and other investors, are highly focused on seeing Riot execute on sizable and value creating AI/HPC deals in the near future. The recently announced transaction with Advanced Micro Devices, Inc. (“AMD”) is a positive signal and confirms our views regarding the intrinsic value of Riot’s key sites, but it is a small proof of concept deal, and we, like you, expect significantly more. Although this underperformance is frustrating, we believe that Riot is better positioned to do higher-quality deals than its peers. Time is of the essence, and a renewed sense of urgency is required to get more material deals completed. It is an exciting time in the data center market. AI/HPC companies have announced ambitious plans to scale their capacity exponentially over the next few years. Perhaps the biggest constraint on this build-out is the availability of power in locations suitable for high-quality data centers. This only makes Riot’s already-powered sites more valuable. Riot’s two primary sites, Corsicana and Rockdale, together comprise 1.7GW of fully available power. Riot announced its inaugural data center deal on January 16, 2026 with AMD, demonstrating the Company’s ability to attract highly sophisticated, investment-grade tenants. The initial 25MW lease is expected to generate $311 million of revenue across an initial 10-year term with an EBITDA margin of ~80%, translating to approximately $1 million of EBITDA per CIT MW. Critically, the Company can retrofit existing infrastructure at Rockdale for a capex cost of just $3.6 million per CIT MW, making the yield-on-cost highly attractive. With 1.4GW of gross capacity remaining to be monetized, Riot is in an enviable position. If Riot can monetize its power in-line with recent precedent transactions, we believe it could generate more than $1.6 billion of annual EBITDA. Factoring in buildout costs and applying valuation multiples at a discount to public data center REITs, we believe the equity value contribution from AI/HPC data centers could be $9 to $21 billion, implying a pro forma share price of $23 to $53 per share, even without ascribing any value to its bitcoin mining or engineering businesses or its NOL carryforwards. We believe Riot is on its way to a transformation from a bitcoin miner to a best-in-class AI/HPC data center company, but it must execute with urgency.

BSD Analysis:
Riot is leveraged bitcoin infrastructure that lives and dies by power contracts and hash rate, not marketing slogans. Scale and access to cheap energy determine survival in mining, not brand awareness. Investors treat it as a pure BTC proxy and miss operational execution differences between miners. Volatility is the business model, but consolidation favors larger, better-capitalized operators. Capital intensity is high, yet marginal economics explode in upcycles. Regulatory risk cuts both ways by squeezing weaker competitors. This is digital commodity production with asymmetric torque when crypto runs.

Pitch Summary:
Chugoku Marine Paints Ltd. (1.0% of net assets as of December 31, 2025) (4617.T – $28.19/¥4,415.00 – Tokyo Stock Exchange) has a 60% market share for coatings for new ships in Japan and 20% globally. CMP has particular strength in ‘anti-fouling’ paints, which prevent marine organisms like barnacles and algae from attaching. Japan plans to double shipbuilding capacity by 2035, anticipating strong growth in marine transportation volume in Asia, Africa, and Latin America. In addition, orders for U.S. naval repair work are expected to increase as the U.S. administration refocuses on the shipbuilding sector, including those in allies Japan, South Korea, and Singapore, to counter China’s maritime rise. CMP’s ROE is currently 17.8%, normalizing at 15%; this is a net cash company.

BSD Analysis:
Chugoku Marine Paints sits in a specialized, regulation-driven niche where coatings determine vessel efficiency and compliance. Anti-fouling technology directly impacts fuel consumption, making pricing power more defensible than generic chemicals. Investors overlook the company because shipping cycles grab headlines. Yet environmental regulation tightens performance standards, reinforcing demand for advanced coatings. Switching suppliers mid-dry dock is operationally risky, creating stickiness. Margins reflect technical expertise, not volume alone. This is industrial chemistry paid by physics and regulation.

Pitch Summary:
National Fuel Gas Co. (2.0%) (NFG – $80.06 – NYSE) is a gas and pipeline utility with a growing exploration and production business. The gas utility serves 754,000 customers in Buffalo, New York, and Erie and Sharon, Pennsylvania. The pipeline & storage (P&S) business operates 3,000 miles of pipe and 34 storage facilities primarily in the state of New York. The E&P business, Seneca Resources, operates in Appalachia (where it owns 1.2 million net acres), primarily in the Marcellus and Utica shales and ended FY 2025 with nearly 5.0 Tcfe of proved gas reserves, making it one of the most resource-rich utilities in the U.S. These reserves are strategically important as natural gas demand in the Northeast accelerates, driven in part by rising electricity consumption from data centers and AI-related load growth. NFG’s extensive pipeline and storage network further enhances the value of its upstream assets by providing reliable access to premium regional markets. Higher gas production and prices have helped drive very strong EPS and cash flow growth in recent years and will continue given legacy hedges roll off and are replaced at higher prices. NFG’s pending $2.6 billion acquisition of CenterPoint Energy’s Ohio gas utility will roughly double NFG’s regulated utility rate base, expand its customer footprint, and increase the percentage of earnings derived from regulated operations.

BSD Analysis:
National Fuel Gas is vertically integrated gas infrastructure that the market treats like a commodity producer. Its regulated utility and pipeline assets provide stability that upstream optics obscure. Investors fixate on gas price volatility and miss the ballast from rate-based earnings. Appalachian production remains relevant as LNG exports expand. Capital discipline has improved materially versus prior cycles. Dividend durability is supported by diversified cash flows, not hope. This is natural gas exposure with built-in shock absorbers.

Pitch Summary:
Microsoft Corp. (2.4%) (MSFT – $483.62 – NASDAQ) is one of the world’s largest software companies. The firm, with strong presence across all layers of the cloud stack, is aggressively expanding its cloud infrastructure business and investing in artificial intelligence (AI) businesses. Microsoft continues to be well positioned to capitalize on long-term, multi-industry transformation spending and is at the forefront of developing an AI ecosystem. Currently, the company expects to significantly accelerate capex spending in the near term to double its data center footprint where it sees cloud demand exceed supply. Investors see Microsoft as a leader among big tech companies in AI. The company can leverage AI solutions across its wide range of offerings, including personal computer, gaming, enterprise IT solutions, cloud, and new AI solutions.

BSD Analysis:
Microsoft is the cleanest large-cap exposure to enterprise AI and cloud infrastructure. Azure growth remains the key earnings driver. Office and enterprise software form a distribution engine competitors struggle to match. AI integration through Copilot increases ARPU without reinventing the model. Margins remain elite despite heavy investment. The balance sheet gives Microsoft strategic flexibility. Execution under Nadella has been relentless. This is not hype-driven tech. It’s enterprise infrastructure compounding at scale.

Pitch Summary:
Chevron Corp. (2.5% of net assets as of December 31, 2025) (CVX – $152.41 – NYSE), based in Houston, Texas, is an integrated energy company with operations in over 100 countries. The company operates in oil and gas exploration and production, oil and gas refining and marketing, power, and chemicals manufacturing. With the completion of major projects in the Gulf of America and Kazakhstan, the ramp up of Permian production to its steady state target of 1.0 million barrels per day, and structural cost savings initiatives, Chevron is on the cusp of a free cash flow inflection. The acquisition of Hess Corp. (and its 30% interest in the Stabroek block in Guyana) in July 2025 enhances Chevron’s growth prospects and further bolsters free cash outlook. Between 2025 and 2030, we project the company can grow free cash flow greater than 10% per year to reach $30 billion. The company’s capital allocation priorities include growing its dividend, paying down debt, and repurchasing shares.

BSD Analysis:
Chevron is energy exposure with balance-sheet discipline. Its integrated model smooths commodity volatility better than pure upstream peers. Capital allocation favors returns over production growth theatrics. LNG and Permian assets provide long-term relevance. Energy transition narratives haven’t erased oil demand reality. The dividend anchors investor expectations. This is not a green energy pivot story. It’s a cash-flow machine tied to global demand. Chevron works when discipline outlasts price swings.

Pitch Summary:
ALLETE Inc. is a utility company serving customers in Wisconsin and Minnesota. On May 6, 2024, GIP and CPP agreed to acquire ALLETE for $67.00 per share in cash. After a lengthy review, the Minnesota Public Utilities Commission approved the transaction on October 3, 2025. The deal was completed on December 15 following the issuance of the written order from the Minnesota Public Utilities Commission. We view the successful regulatory approval as validation of the company’s stable regulated utility franchise.

BSD Analysis:
ALLETE is regulated utility infrastructure with a renewable tilt that the market treats like generic small-cap power. Earnings are driven by rate-base growth and allowed returns, not demand heroics. Investors worry about capital intensity and financing costs and miss the visibility embedded in regulated recovery frameworks. Renewable development adds long-duration optionality without abandoning core utility math. Political noise exists but doesn’t change asset indispensability. Balance sheet management is conservative relative to growth ambitions. This is slow, predictable compounding tied to wires and wind, not headlines.

Pitch Summary:
Hologic Inc. (3.3%) is a manufacturer of medical imaging systems and diagnostic products focused on women’s health. Hologic agreed to be acquired by Blackstone and TPG for $76.00 cash per share, valuing the transaction at approximately $18 billion. The transaction is subject to shareholder and regulatory approvals and is expected to close in the second quarter of 2026. We believe the agreed price reflects the strength of Hologic’s franchise in diagnostics and breast health imaging. The deal underscores private equity appetite for high-margin, cash-generative healthcare assets.

BSD Analysis:
Hologic is diagnostics and women’s health infrastructure that looks cyclical only because COVID temporarily distorted the base. Core franchises in breast health, molecular diagnostics, and surgical products are embedded in screening guidelines and clinical workflows. Investors fixate on post-pandemic revenue normalization and miss the durability of recurring consumables. Pricing power is subtle but real because outcomes and reliability matter more than unit cost. Installed base economics drive service and reagent pull-through for years after system placement. Capital allocation has been pragmatic rather than promotional. This is healthcare plumbing with a focused niche and steady cash generation.

Pitch Summary:
Exact Sciences Corp. (4.5% of net assets as of December 31, 2025), is a provider of cancer screening and diagnostic services. The company continues to expand adoption of its non-invasive colorectal cancer screening platform while investing in additional oncology diagnostics. We believe the long-term growth opportunity in early cancer detection remains substantial given low screening penetration rates. Operational execution and reimbursement progress are key drivers of value creation. The position reflects our view that strategic interest in the oncology diagnostics space remains robust.

BSD Analysis:
Exact Sciences built its franchise on non-invasive cancer screening, turning prevention into recurring diagnostics revenue. Cologuard remains the anchor product, though competition is rising. Growth depends on physician adoption and payer coverage expansion. R&D spend is heavy because pipeline credibility matters. Profitability remains a work in progress. Data depth and brand recognition provide some moat. This is not a quick-profit diagnostics story. It’s a long-duration bet on screening behavior becoming standard. Exact works if scale finally translates into sustainable margins.

Pitch Summary:
Chart Industries Inc. (4.8%) was among our top contributors to performance for the quarter (based upon price change and position size). The company agreed to be acquired by Baker Hughes. The transaction highlights the strategic value of Chart’s portfolio of cryogenic and gas-handling technologies. We believe the agreed acquisition price appropriately reflects the company’s long-term earnings power and its positioning in LNG and energy transition markets. The deal is subject to customary closing conditions and regulatory approvals.

BSD Analysis:
Chart sits in the infrastructure layer of energy and industrial gas systems, where cryogenic equipment is mission-critical. LNG, hydrogen, and carbon capture narratives all flow through its order book. Revenue visibility depends on project timing, not consumer demand. Margins improve when backlog converts efficiently. Capital intensity and integration risk are real. Demand volatility comes from energy capex cycles. This is not a pure-play clean energy stock. It’s industrial equipment leveraged to large-scale energy transitions. Chart works when projects move from headlines to execution.

Pitch Summary:
Newmont Corp. (3.6%) (NEM – $99.85 – NYSE) rose over 45% as gold prices surged on expectations of lower real rates and a softer dollar. The company is successfully integrating its Newcrest acquisition and simplifying its portfolio. We continue to view Newmont as a core holding for both income and diversification.

BSD Analysis:
Newmont is the closest thing to blue-chip gold exposure in public markets. Asset quality and geographic diversification matter more than quarterly gold prices. Cost discipline is the swing factor in a volatile commodity. M&A has reshaped the portfolio, sometimes messily, but scale matters in mining. Balance-sheet strength protects downside better than smaller peers. Gold price leverage remains the core thesis. This is not a growth stock. It’s a hedge with operational execution layered on top. Newmont works when uncertainty returns.

Pitch Summary:
Morgan Stanley (2.6%) (MS – $177.53 – NYSE) is a global investment bank with over 50,000 employees operating in 42 countries. In 2009, the firm purchased the Smith Barney brokerage unit from Citigroup and now operates the largest retail and institutional sales force in the United States. CEO Ted Pick has continued the strategy of former head Jim Gorman in terms of pivoting the bank to a more favorable model of fee generating businesses. The firm added to its digital capabilities with the acquisition of E*Trade and the major acquisition of Eaton Vance to bolster capabilities in asset management. We believe these corporate actions and continued growth in scale provide Morgan Stanley with a unique competitive platform in global financial services.

BSD Analysis:
Morgan Stanley is no longer a trading house living and dying by deal flow. Wealth and asset management now anchor earnings with recurring fee streams. Capital markets are cyclical, but diversification smooths volatility. Rate sensitivity adds upside without overwhelming risk. The balance sheet is strong, supporting capital returns. Execution since the financial crisis reset has been disciplined. This is not a pure investment banking bet. It’s a scaled financial platform with durable revenue. Morgan Stanley compounds when it stays boring.

Pitch Summary:
Alphabet Inc. (3.8% of net assets as of December 31, 2025) (GOOG – $313.80 – NASDAQ) shares rose again in the fourth quarter as regulatory risk continued to fade following the removal of a key overhang in September, allowing investor focus to shift back to the company’s improving core fundamentals and strong 3Q’25 results reported in late October. Looking ahead, Alphabet’s industry-leading AI capabilities should support continued Search revenue growth, while Cloud growth is expected to reaccelerate as incremental TPU sales, rising Gemini demand, and expanding infrastructure capacity gain traction. Cloud margins should also continue to improve, even as the company invests heavily in capex and infrastructure. Beyond Search & Cloud, Alphabet’s other businesses continue to perform well and offer additional long-term upside and optionality. These businesses include Subscriptions (YouTube & Google One) and YouTube Ads, while Waymo’s rapid scaling – over 14 million trips in 2025 with expansion planned to 20 new cities in 2026 – highlights Alphabet’s ability to innovate and execute across multiple platforms.

BSD Analysis:
Alphabet remains one of the most dominant cash-flow engines in the global economy, despite constant disruption narratives. Search is still habitual behavior, and AI enhances monetization rather than eliminating it. YouTube continues expanding across ads, subscriptions, and streaming dominance. Google Cloud profitability changes the earnings mix meaningfully. Regulatory scrutiny is persistent, but user behavior hasn’t shifted. Capital discipline has improved with aggressive buybacks. The balance sheet allows Alphabet to invest in AI without risking the franchise. This is not a melting ice cube. It’s digital infrastructure priced with permanent skepticism baked in.