Investment Pitches

Pitch Summary:
We were also publicly outspoken in Mayne Pharma Group Limited (MYX.ASX), where the bidder, Cosette Pharmaceuticals, got cold feet and attempted to walk from the deal. Despite Justice Ashley Black delivering a comprehensive verdict against Cosette and the Takeovers Panel making a landmark intervention into a scheme of arrangement to declare Unacceptable Circumstances, the Treasurer ultimately blocked the transaction on spurious “national interest” grounds. Justice Black’s ruling unequivocally increases deal certainty and sets a very high threshold for a bidder to walk from its contractual obligations.

BSD Analysis:
Mayne Pharma is a specialty generics and women’s health player rebuilding credibility after years of volatility. Generics pricing pressure is real, but portfolio focus and cost control matter more than industry headlines. Investors anchor to past capital missteps and overlook incremental operational stabilization. Specialty brands provide higher-margin ballast against commoditized exposure. Balance sheet repair is the gating factor for rerating, not revenue growth alone. Execution discipline determines survival in this segment. This is pharma turnaround math — not glamorous, but potentially asymmetric if stability holds.

Pitch Summary:
With the exception of Xref Limited (XF1.ASX), where shareholders voted the deal down, and Mayne Pharma (MYX.ASX, more below), deals sailed through without issue. The main detractors for the year were more limited, namely shareholders (surprisingly) voting done the Xref Limited (XF1.ASX, -0.95%) and Mayne Pharma Group Limited (MYX.ASX, -3.34%), discussed in more detail below.

BSD Analysis:
Xref operates in a narrow but sticky corner of HR tech: reference checking and candidate verification where compliance risk outweighs software novelty. Hiring workflows are increasingly digitized, and automation reduces time-to-offer in competitive labor markets. Investors dismiss the company as niche and subscale, but embedded integrations with ATS platforms create quiet switching costs. Growth depends more on enterprise penetration than logo count. Margin leverage improves quickly once sales efficiency tightens because the product is lightweight and repeatable. Competition exists, but trust and compliance create friction for new entrants. This is workflow software solving a specific pain point, not chasing broad HR budgets.

Pitch Summary:
Had the ADNOC transaction stuck, the acquisition of Santos Limited (STO.ASX) would have been the largest cash takeover of an Australian company on record (following Blackstone’s acquisition of Airtrunk in 2024 but behind Block’s scrip acquisition of Afterpay in 2021). Instead, the deal failed to even get off the starting blocks when it was spectacularly withdrawn to the market’s surprise. Similar NBIOs for AUB Group (AUB.ASX, $5b) and Abacus Storage King (ASK.ASX, $2b) failed to fire, highlighting the need for caution in the non-binding stages of a deal lifecycle.

BSD Analysis:
Santos is a gas-heavy producer positioned for long-term LNG demand across Asia-Pacific. Low-cost reserves and infrastructure integration support durable cash flow. Commodity prices drive volatility, but disciplined capex protects downside. Energy transition narratives haven’t erased global gas demand. Expansion projects add optionality but require execution discipline. Balance-sheet strength has improved materially. This is not a speculative energy play. It’s LNG infrastructure with cash flow gravity. Santos works when pragmatism beats ideology.

Pitch Summary:
The Fund also participated in the IPO of Neptune Insurance Holdings Inc., the leading underwriter of private flood insurance. Neptune utilizes a proprietary underwriting model and easy-to-use technology to enable third-party insurance agents to offer flood insurance to their clients. The purchase of flood insurance is often mandatory in certain areas that are designated as high-risk, although flood damage also occurs outside of these zones since flood maps are often outdated and updating them is politically contentious. Flood insurance in the U.S. is dominated by the government-run National Flood Insurance Program (NFIP). Neptune offers a private market alternative that is faster and easier for insurance agents to quote. This has allowed Neptune to expand the market by winning business outside of flood zones where insurance is not mandatory. In the recent quarter, over 80% of new business sales came from non-mandatory purchases. The company’s proprietary underwriting model leverages a large claims database and is updated twice a week to improve performance. Neptune is an MGA (Managing General Agent) meaning that it doesn’t bear the risk of losses, which makes the business very capital efficient. The company writes business on behalf of 39 capacity providers, who in turn pay Neptune commissions for sourcing and underwriting the business. Because of Neptune’s quoting speed, ease-of-use, and competitive pricing, the company has been able to sign up over 80,000 insurance agencies to use its product and has grown to 260,000 policies. Neptune’s distribution, underwriting model, and diverse capital sources are challenging for a new entrant to replicate, and its competitive advantages become stronger as the company scales. The company has a large opportunity to penetrate the 25 million properties that Neptune considers high-risk and take share from the NFIP, which is raising its rates following years of underpricing. We think this can support 15% to 20% EBITDA growth in our base case. We see the potential for further upside should the federal government take action to reform the NFIP and reduce its role in the flood insurance market since the program has lost $36 billion since 2005 and relies on borrowing from the U.S. Treasury to remain solvent.

BSD Analysis:
Neptune operates in digital-first homeowners and flood insurance, targeting a niche often underserved by traditional carriers. Technology-driven underwriting aims to streamline a historically clunky process. Growth potential is real as climate risk reshapes insurance demand. That said, catastrophe exposure is always lurking. Reinsurance partnerships matter more than marketing. Capital adequacy and risk modeling define survival. This is not a high-margin SaaS business. It’s tech-enabled underwriting with real exposure. Neptune works if risk pricing stays ahead of reality.

Pitch Summary:
During the quarter, the Fund invested in Morgan Stanley, a leading global investment bank and wealth management firm. Morgan Stanley has successfully diversified its business beyond cyclical banking and trading fees into more recurring wealth and investment management. These businesses collectively oversee $9.3 trillion in client assets that generate predictable, capital-light revenue that grows from inflows and market appreciation. Morgan Stanley has a unique client acquisition model that includes financial advisors, self-directed accounts, and workplace accounts, providing multiple avenues to serve clients. In 2025, the company amassed over $350 billion in net new assets, with a 7% net inflow rate in the fourth quarter. These businesses provide a durable base of revenue and earnings for Morgan Stanley even when banking activity is slow. At the same time, Morgan Stanley remains a top three global investment bank, enabling the firm to generate considerably higher earnings during periods of strength in the capital markets. Morgan Stanley benefits from numerous competitive advantages. It has a leading brand in banking and wealth management, long-held customer relationships, and access to premier industry talent. Its unique customer acquisition model gives Morgan Stanley a strong relationship with clients earlier in their wealth lifecycle and the ability to grow with clients as they build wealth. As Morgan Stanley grows revenues, we expect continued margin expansion from operating leverage and efficiencies from the broader usage of AI. The company has significant excess capital, which could be used to invest in the business or returned to shareholders, especially as capital requirements ease under a more business-friendly administration. Through savvy acquisitions and disciplined execution, Morgan Stanley has leveraged its position as a top investment bank to build a global wealth platform, which provides earnings ballast and higher returns on equity. CEO Ted Pick and his two co-presidents have an average of 30 years’ experience at Morgan Stanley and were instrumental in building the business up to its current state. We expect the company to continue compounding in its wealth and investment businesses and to gain market share in its investment bank. Together with margin expansion and capital return, this should drive considerable earnings growth and 20%-plus returns on equity.

BSD Analysis:
Morgan Stanley transformed itself from a trading-heavy investment bank into a diversified wealth and asset management powerhouse. Wealth management now anchors earnings with more stable, recurring fee income. Capital markets remain cyclical, but diversification dampens volatility. Net interest income adds leverage to rate cycles without dominating risk. Capital levels are strong, supporting buybacks and dividends. Execution has been disciplined since the financial crisis reset. This is not a pure investment banking bet. It’s a fee-based financial platform with real scale. Morgan Stanley wins when discipline beats bravado.

Pitch Summary:
Shares of P&C insurance software vendor Guidewire Software, Inc. declined during the quarter following strong gains earlier in the year, as the broader software sector came under pressure. After a multi-year transition period, we think Guidewire’s cloud migration is largely complete. We believe cloud will be the sole path forward, with annual recurring revenue benefiting from new customer wins and migrations of existing customers to InsuranceSuite Cloud. This progress is best exemplified by Guidewire’s landmark 10-year agreement with Liberty Mutual, the fifth-largest U.S. insurer with $45 billion in direct written premiums, to migrate its entire on-premise deployment of ClaimCenter and adopt PolicyCenter in the cloud. The deal should also help drive adoption among other Tier 1 carriers—now that Liberty Mutual has fully embraced the cloud, others are likely to follow. We believe that Guidewire will be the critical software vendor for the $2.5 trillion global P&C insurance industry, capturing 30% to 50% of its $15 billion to $30 billion total addressable market and generating margins above 40%.

BSD Analysis:
Guidewire owns the core systems of property & casualty insurers, which makes it painfully hard to displace. Once underwriting, billing, and claims run on Guidewire, switching is existential risk, not a procurement exercise. The shift to cloud subscriptions created near-term noise but improves long-term economics. Growth depends on insurers modernizing legacy stacks — a slow but inevitable process. Margins are still rebuilding as SaaS mix increases. Competition exists, but domain expertise is a real moat in insurance tech. Operating leverage should show up as migrations mature. This is not flashy fintech. It’s regulated infrastructure software compounding quietly.

Pitch Summary:
MercadoLibre, Inc., the leading e-commerce marketplace and fintech provider in Latin America, detracted from performance on concerns over competition and margin pressure. Competitive intensity rose in Brazil as Amazon and Shopee ramped promotional activity and prioritized growth. MercadoLibre responded with discounts, expanded free shipping, and increased marketing, driving fears of margin compression. At the same time, investors began to discount emerging risks from agentic AI-driven commerce, which could pressure growth by reducing marketplace product discovery and high-margin advertising revenue. Continued volatility in Argentina, one of MercadoLibre’s fastest-growing markets, also raised concerns that weaker economic conditions could result in less reliable profit contribution. We maintain conviction in the company’s long-term opportunity. In our view, MercadoLibre is uniquely positioned to capture a significant share of Latin America’s underpenetrated e-commerce and fintech markets because of its scale, customer trust, and unique ecosystem.

BSD Analysis:
MercadoLibre is Latin America’s default operating system for commerce and fintech. Logistics density and payments integration create a moat competitors underestimate. Investors worry about macro and currency volatility and miss relentless execution. Fintech deepens engagement while improving margins across the marketplace. Scale matters more in emerging markets where fragmentation is the norm. Cash generation is strengthening even as growth remains robust. This is platform dominance in underpenetrated economies, not just an e-commerce play.

Pitch Summary:
Robinhood Markets, Inc. is a digital brokerage platform serving retail investors. Shares detracted during the quarter following robust performance over the first nine months of the year. While overall activity levels remain strong, Robinhood experienced some softening in customer engagement in November, with cryptocurrency trading volumes in particular declining on both a month-over-month and year-over-year basis. We believe this moderation in activity, combined with investor profit-taking after a significant run-up in the stock, contributed to the quarter’s underperformance. Over the longer term, we believe Robinhood’s strong position with a younger generation of investors, leading user experience, and rapid pace of product development will support continued growth across market cycles.

BSD Analysis:
Robinhood is evolving from meme-stock gateway to full-spectrum retail brokerage infrastructure. Interest income and options activity stabilized earnings beyond pure trading hype. Investors anchor to past volatility and miss improving product breadth and asset growth. The platform’s UX remains a competitive weapon for younger investors. Regulatory scrutiny forced discipline rather than collapse. Monetization still has room to deepen across retirement and advisory products. This is retail access to markets being rebuilt into a durable ecosystem.

Pitch Summary:
Fair Isaac Corporation (FICO), a data and analytics company focused on predicting consumer behavior, contributed to performance. FICO reported strong quarterly financial results and solid fiscal 2026 guidance, which calls for 28% EPS growth. The company also launched its new Direct Licensing Program for mortgage lending, which provides greater flexibility to monetize its intellectual property. The initiative was well received by Federal Housing Finance Agency Director Bill Pulte, which should help temper concerns about regulatory risk. We expect FICO to retain its dominant market position in the consumer credit ecosystem and continue growing earnings per share at a rapid rate from price increases, a rebound in mortgage originations, and continued growth in non-mortgage consumer lending.

BSD Analysis:
FICO owns the scoring algorithm that underwrites modern consumer credit. Lenders can complain about pricing, but they cannot function without the model embedded in risk workflows. Investors fixate on valuation while pricing power quietly compounds. New score versions and analytics deepen lock-in rather than disrupt it. Cyclicality in lending affects volumes, not relevance. Margins reflect monopoly-like economics in a regulated moat. This is financial infrastructure hiding in plain sight.

Pitch Summary:
Jack Henry & Associates, Inc. is a leading provider of technology solutions for community banks and credit unions. Shares rose after the company reported better-than-expected quarterly results and raised financial guidance. Adjusted revenue grew 9% and earnings per share increased 21% in the quarter, reflecting a favorable demand environment, market share gains, and strong margin expansion. Management raised fiscal year guidance for both revenue and earnings while noting potential for further upside. Shares also benefited from expectations for competitive wins versus Fiserv as it undertakes a disruptive, multi-year effort to consolidate 16 core platforms. We expect Jack Henry to continue gaining share in a growing market as financial institutions increase investment in technology and automation.

BSD Analysis:
Jack Henry runs the core systems for banks that would rather not experiment. Once a community or regional bank migrates onto its platform, leaving is operationally traumatic. Investors mistake modest growth for fragility and miss brutal retention rates. Regulatory and compliance complexity only increase switching costs over time. Digital modules add incremental wallet share without destabilizing the base. Margins reflect embedded trust, not hype. This is fintech infrastructure that survives because banks cannot afford downtime.

Pitch Summary:
Leading rating agency and data provider S&P Global Inc. contributed to performance. Shares rebounded from a pullback in September that stemmed from a competitor’s cautious commentary around market demand and margins. S&P Global alleviated these concerns by delivering strong third quarter results and raising its full-year financial guidance. The company is benefiting from elevated debt issuance, rising equity markets, and resilient demand for its software and data services. Momentum carried into the fourth quarter, with rated debt issuance growing more than 30% in October and November. Additionally, management provided medium-term financial guidance calling for 7% to 9% organic revenue growth, continued margin expansion, and double-digit annualized earnings per share growth. We continue to own S&P Global given the company’s long growth runway and significant competitive advantages.

BSD Analysis:
S&P Global monetizes financial complexity rather than market direction. Ratings, indices, and data are embedded so deeply in capital markets that removing them would break plumbing, not just revenue. Investors fixate on issuance cycles and miss how indispensable benchmarks and risk analytics have become. Pricing power compounds because customers can’t realistically switch index providers or rating frameworks. M&A integration noise fades; subscription and recurring revenue do not. Capital-light economics translate volatility into long-term data demand. This is tollbooth finance disguised as information services.

Pitch Summary:
When it was announced in December that SpaceX was evaluating an IPO in 2026 and its latest valuation was $800 billion, we initiated a position in SATS as the price had not reflected this news yet, trading at a large discount to NAV. We continue to view EchoStar as an attractive risk/reward situation as SpaceX heads towards a potential IPO in mid-2026.

BSD Analysis:
EchoStar is spectrum optionality disguised as a struggling satellite business. The legacy pay-TV exposure is in structural decline, and that’s not reversing. What matters is wireless spectrum and the long game around network buildout. Capital intensity is extreme, and execution risk is high. Regulatory timelines dictate value realization more than customer growth. This is not a clean telecom operator. It’s a spectrum chess match with a volatile balance sheet. Upside exists if assets are monetized intelligently. EchoStar rewards patience — and punishes complacency.

Pitch Summary:
The Global X Data Center & Digital Infrastructure ETF (DTCR) is positioned to outperform due to its strategic overweight in Real Estate, particularly in data centers, which are less affected by the AI-driven disruptions impacting software-as-a-service stocks. Since the Q3 2025 analysis, DTCR has returned 31%, driven by its compelling valuation and strong technical indicators. The ETF's focus on digital infrastructure, a sector poised for growth, and its diversified portfolio across mid-cap blend styles, provide a balanced exposure to growth and value. With a low price-to-earnings ratio of 14.4x and a solid PEG ratio of 1.5x, DTCR offers an attractive investment opportunity.

BSD Analysis:
DTCR's robust performance is supported by its strategic allocation to Real Estate, which has shown resilience amid broader market volatility. The ETF's assets under management have surged to $1.16 billion, reflecting growing investor confidence. Despite its moderate expense ratio and low dividend yield, DTCR's share-price momentum is exceptional, earning it an A+ ETF Grade. While the ETF's historical volatility poses risks, its liquidity and tight bid/ask spread enhance its tradeability. The fund's allocation to ex-U.S. stocks has been a significant alpha driver, and its valuation metrics suggest continued upside potential.

Pitch Summary:
Itron, Inc. recently reported a strong end to its 2025 fiscal year, with significant improvements in net profits and cash flows despite a decline in revenue. The company's earnings per share and adjusted net income exceeded analyst expectations, driven by improved gross profit margins and operational efficiencies. However, the outlook for 2026 indicates a potential decline in profitability due to increased interest expenses from recent acquisitions and stagnant revenue growth. Despite these challenges, Itron's stock is priced attractively compared to its peers, suggesting it may perform in line with the broader market.

BSD Analysis:
Itron's strategic focus on expanding its software and services segment has resulted in higher margins and improved profitability, particularly in its Outcomes segment, which leverages AI and machine learning for data analytics. The company's recent acquisitions, Urbint and Locusview, aim to enhance its capabilities in critical infrastructure management and digital construction solutions. However, these acquisitions have not yet translated into significant revenue growth, and the additional interest expenses are expected to impact profitability in 2026. While Itron's valuation appears favorable compared to similar firms, the uncertainty surrounding its future earnings and revenue growth suggests a cautious approach, making it a suitable Hold candidate rather than a Buy.

Pitch Summary:
Estée Lauder has shown a significant recovery in 2025 after a challenging period from 2022 to 2024. The company's stock has risen by 63% over the past year, driven by improvements in its business fundamentals. The recovery is evident across all segments, with skincare returning to growth and profitability improvements being noted. Management's optimistic tone and the company's strategic initiatives, such as the Profit Recovery and Growth Plan, have contributed to this positive outlook. Despite a high valuation, the stock is considered attractive due to its long-term growth potential and improved margins.

BSD Analysis:
Estée Lauder's recovery is supported by a strategic focus on long-term growth rather than short-term gains. The company's ability to improve gross margins and return to growth in key segments like skincare is a testament to its strong brand portfolio and effective management strategies. However, investors should be cautious of the stock's high beta and potential volatility due to its exposure to market-wide movements. The company's premium product positioning also introduces cyclical risks compared to other consumer staples. Despite these challenges, the current valuation offers a higher margin of safety than in previous years, making it a compelling investment for those with a long-term perspective.

Pitch Summary:
Uber's stock has fallen by approximately 15% since the last analysis, despite improvements in its business outlook. The company's core business is accelerating, with durable margins and compounding free cash flow, which are expected to improve further with full autonomy. Uber's network value is its true strength, differentiating it from software companies. The company is generating significant cash and value at scale, with a 20% YoY revenue increase and a 35% YoY adjusted EBITDA growth. Despite AI and competition concerns, Uber's positioning as a demand layer rather than an AV technology leader mitigates these risks.

BSD Analysis:
Uber's valuation appears disconnected from its growth prospects, trading at a forward P/E of 21x and a forward EV/EBITDA of 13x, while free cash flow grows at 40% and EBITDA at mid-30s. The market seems to underestimate Uber's growth potential, with only 15% of adults in top markets using the platform. The company's international mobility and expansion into less dense markets provide further growth opportunities. Autonomous vehicles, while a potential threat, are also a tailwind, as Uber does not need to own vehicles to benefit from AV advancements. The company's strategic positioning and network utilization offer a competitive advantage that AI and competitors cannot easily replicate.

Pitch Summary:
Ceragon Networks has faced challenges in 2025, including sales declines in India due to Vodafone Idea's financial issues and deferred deliveries in North America. However, the company has shown resilience by generating strong cash flow and reducing borrowings. Management anticipates a return to growth in 2026, with expected revenue between $355 million and $385 million and improved margins. The North American market shows promise with a doubling backlog, and cost reduction initiatives are underway to counteract rising memory prices. Given these factors, the stock is upgraded from 'Hold' to 'Buy' with a target price of $3.30.

BSD Analysis:
Ceragon Networks' strategic focus on North America is paying off, as evidenced by the significant increase in backlog. The company's proactive measures to address cost challenges, such as memory price spikes, indicate strong management foresight. Despite the setbacks in 2025, the projected 10% revenue growth and 50% increase in operating profit for 2026 highlight a positive turnaround. The valuation at a discount to Aviat Networks suggests potential upside, especially if Ceragon can execute its growth strategy effectively. A merger with Aviat Networks could further enhance scale and cost synergies, although this remains speculative.

Pitch Summary:
Structure Therapeutics has emerged as a leading contender in the oral GLP-1 weight-loss drug market. The company's aleniglipron has shown promising Phase II results, with weight-loss efficacy comparable to Eli Lilly's orforglipron. The stock has surged following these results, reflecting increased investor confidence. With a market cap now around $5 billion, Structure is well-positioned to capitalize on the growing demand for oral weight-loss solutions. The company's strong cash position and recent $100 million deal with Genentech further bolster its financial stability. However, the success of Phase III trials and competition from other pharmaceutical giants remain critical to its future valuation.

BSD Analysis:
Structure Therapeutics' strategic positioning in the rapidly expanding oral GLP-1 market is noteworthy. The company's ability to deliver superior efficacy and tolerability in upcoming Phase III trials could significantly enhance its market value. The scalability of small-molecule drugs like aleniglipron offers a competitive edge over peptide-based alternatives, given the anticipated high-volume, low-cost market dynamics. Despite the promising outlook, the competitive landscape is intense, with major players like Novo Nordisk and Eli Lilly advancing their pipelines. Investors should consider the potential risks, including trial failures and competitive pressures, when evaluating Structure's long-term prospects.

Pitch Summary:
The NEOS Nasdaq-100 Hedged Equity Income ETF (QQQH) is a rebranded version of the former NUSI ETF, which was known for its 'net credit collar' strategy around the Nasdaq 100 Index. This strategy involved selling covered calls and put options to create a floor on declines. However, the current iteration of QQQH, managed by Neos, has adjusted its strategy to offer more upside potential, but this comes at the cost of increased risk during market downturns. The ETF's current option positions include covered calls and puts, which provide some downside protection but expose it to significant risk if the Nasdaq 100 Index drops below a certain level. While QQQH may offer better relative returns compared to some peers, it still carries substantial risk, particularly in volatile markets.

BSD Analysis:
The transition from NUSI to QQQH reflects a strategic shift by Neos to capture more upside potential, but this has diluted the defensive characteristics that were once a hallmark of the fund. The ETF's current strategy involves a put spread that offers limited downside protection, which may not suffice in the event of a significant market downturn. The fund's performance during past market stress tests, such as the 2020 pandemic-induced crash, highlighted its ability to withstand declines better than some peers. However, the recent adjustments have made it more vulnerable to rapid sell-offs, which are increasingly common in today's markets. Investors seeking steady income may find QQQH appealing, but they should be aware of the inherent risks and the potential for significant losses if the market experiences a sharp decline.

Pitch Summary:
VYMI has shown a total return of approximately 25% since July 2025, outperforming the S&P 500's 8.5% return. The ETF's focus on international value stocks has benefited from a rotation away from US growth markets. Despite a lack of significant portfolio changes, VYMI's financials-heavy allocation and value focus have positioned it well in the current market environment. The ETF's valuation remains attractive compared to US growth stocks, suggesting further potential for outperformance. VYMI's diversified holdings and reasonable forward P/E ratio make it a compelling choice for investors seeking international diversification and income.

BSD Analysis:
The outperformance of VYMI can be attributed to a broader rotation into international value stocks, driven by factors such as a stronger Japanese market and a cooling US growth market. The ETF's financials-heavy allocation is expected to generate strong capital returns in an environment with higher global interest rates. While risks such as a potential US earnings reacceleration or a dollar surge exist, the current market conditions favor VYMI's strategy. The ETF's valuation gap with US growth stocks provides room for further rerating, making it a strong hedging tool and a potential total return bet.