Investment Pitches

Pitch Summary:
Arkema underperformed as continued weakness in its Coatings and Intermediates segments pressured margins. The company also underwent a leadership change, which added uncertainty regarding integration of recent acquisitions amid soft global demand.

BSD Analysis:
Pzena’s bearish note reflects margin compression risks and weak near-term visibility. While Arkema’s focus on high-value specialty materials remains intact, execution risk around recent M&A and cost inflation weigh on sentiment. Valuation near 7x EBITDA limits downside, but reacceleration in end markets will be required for meaningful recovery.

Pitch Summary:
Daimler Truck detracted from performance after lowering sales volume guidance amid concerns about a newly announced 25% U.S. tariff on heavy-duty truck imports. The company faces near-term headwinds from demand softness and tariff exposure, offsetting otherwise resilient operations.

BSD Analysis:
Pzena acknowledges Daimler Truck’s cyclical exposure but sees long-term potential as electrification and hydrogen adoption progress. Near-term valuation pressure from tariffs may obscure mid-cycle earnings power. The company’s dividend discipline, strong European market share, and structural cost savings provide a floor to downside risk. Longer-term, its eTruck and fuel-cell segments could reaccelerate growth beyond 2026.

Pitch Summary:
TDK gained during the quarter as product innovation and portfolio optimization supported strong performance. The company’s adoption of silicon anode batteries and expanding demand for AI-driven hard disk storage contributed to renewed investor enthusiasm.

BSD Analysis:
Pzena’s thesis underscores TDK’s transformation from a legacy electronics supplier into a critical enabler of AI hardware infrastructure. Its leadership in silicon anode batteries and data storage aligns with secular AI and EV adoption trends. With EV/EBITDA below 8x and FCF yields near 7%, valuation remains compelling. Sustained innovation in battery chemistry and industrial sensors positions TDK for multi-year margin expansion.

Pitch Summary:
Alibaba was a top contributor in Pzena’s International Value ADR portfolio for the third quarter of 2025. The market grew more optimistic about Alibaba’s cloud and AI divisions, following robust growth reports in both segments. The company also stabilized its share in e-commerce and regained momentum in quick commerce. These improvements, alongside disciplined cost management, positioned Alibaba as a central beneficiary of China’s digital recovery.

BSD Analysis:
Pzena’s bullish stance on Alibaba reflects its view that the company’s diversified revenue base—particularly cloud computing and AI—is now reasserting dominance following regulatory headwinds. Cloud growth above 20% y/y and early monetization of AI tools provide meaningful catalysts for multiple expansion. Trading near 10x forward EPS and with over $60B in net cash, Alibaba’s valuation is deeply discounted versus global peers. Key catalysts include continued AI integration, domestic consumption rebound, and potential restructuring of Ant Group.

Pitch Summary:
Astronics was a top contributor to micro-cap performance. The company benefited from strong order activity across its aerospace and defense segments as air travel and defense spending recovered.

BSD Analysis:
Astronics is well-positioned to capitalize on the aerospace upcycle and defense modernization, supported by an $800M+ backlog and improving supply chains. Its core electrical power and lighting systems remain critical to aircraft production growth, while defense contracts add stability. EBITDA margins are trending toward 10%, and leverage has declined significantly. With secular tailwinds in avionics and power management, the company’s valuation at 9x forward EBITDA remains attractive for continued re-rating.

Pitch Summary:
Bloom Energy contributed positively to returns as investors recognized the company’s potential in AI and data center-related energy infrastructure. Its modular fuel cell systems address rising demand for efficient, resilient power solutions.

BSD Analysis:
Bloom’s differentiated fuel cell technology provides scalable energy efficiency advantages versus traditional backup generators, making it integral to AI data center power reliability. Backlog grew 22% YoY, and margins expanded 300bps, aided by higher production volumes. The company’s shift toward higher-value commercial deployments and partnerships with hyperscalers bolster its growth profile. Trading near 2.5x forward sales, Bloom offers asymmetric upside as energy resilience becomes mission-critical for digital infrastructure.

Pitch Summary:
Xometry was a top contributor to small-cap performance. The company leverages AI and data analytics to connect buyers and suppliers of custom manufacturing services efficiently. Strong growth in order volumes and improving margins highlight execution strength.

BSD Analysis:
Xometry’s AI-enabled marketplace continues to gain traction in reshoring and precision manufacturing trends. With 35% revenue growth, improving gross margins from 27% to 33%, and positive FCF trajectory, the firm is moving toward operating leverage inflection. Its supply chain digitization platform scales with industrial automation and nearshoring. Partnerships with major OEMs and AI-based quoting tools enhance competitive differentiation. While valuation is rich, structural adoption tailwinds and execution consistency support long-term upside.

Pitch Summary:
Robinhood was a new addition during the quarter as part of the portfolio’s overweight in financials. The company has strengthened fundamentals with rising net interest income and higher user engagement across its trading and crypto businesses.

BSD Analysis:
Robinhood’s product expansion strategy—into credit cards, retirement accounts, and 24-hour trading—has diversified its revenue base beyond transaction volumes. Net interest income rose 25% sequentially as cash sorting initiatives improved yields. Crypto activity remains volatile but profitable, with management targeting consistent GAAP profitability in 2025. The platform’s 11M+ monthly active users demonstrate strong engagement, aided by UI innovation and cross-selling. Trading at 6x forward sales with zero debt, HOOD’s scalability and ecosystem expansion could drive long-term re-rating.

Pitch Summary:
GE Vernova was added during the quarter as part of the fund’s overweight in industrials tied to secular growth themes like power generation and AI infrastructure buildout. Management’s restructuring progress supports improved efficiency and margin profile.

BSD Analysis:
GE Vernova’s separation from GE Aerospace enables focused capital allocation toward electrification and grid resilience. With over $100B in backlog, it stands to benefit from global decarbonization initiatives, grid modernization, and AI data center energy demand. EBITDA margins are expanding as renewable project execution improves and supply chains stabilize. The company’s exposure to clean power and digital grid management makes it a structural play on energy transition. Valuation remains undemanding versus peers like Siemens Energy and Schneider Electric, suggesting further re-rating potential as earnings normalize.

Pitch Summary:
Oracle was initiated as a new holding this quarter. The company continues to expand its cloud computing business, with strong AI infrastructure demand and recent high-profile contracts bolstering backlog growth. Its hybrid model offers resilience and predictable revenue.

BSD Analysis:
Oracle’s $455B cloud backlog demonstrates its transformation from legacy software vendor to enterprise cloud powerhouse. Partnerships with OpenAI, NVIDIA, and Cohere accelerate its AI integration, positioning OCI as a credible hyperscale alternative. With double-digit cloud revenue growth, expanding operating margins above 40%, and steady capital returns, Oracle’s risk/reward remains compelling. The company’s hybrid cloud and database offerings benefit from sticky enterprise clients and long-term contracts. At ~18x forward earnings with a 1.5% yield, Oracle provides stable cash flows and optional upside from AI-driven infrastructure expansion.

Pitch Summary:
MongoDB was added as a new position during the quarter. The company offers a differentiated cloud-native database that enables flexibility and scalability for modern software applications. The fund sees MongoDB benefiting from secular data growth and developer adoption.

BSD Analysis:
MongoDB remains the leading independent database company with accelerating adoption of its cloud platform, Atlas, which accounts for nearly 70% of total revenue. With annual recurring revenue surpassing $2B and net retention of 120%+, MDB continues to expand its enterprise footprint while maintaining 30%+ top-line growth. The firm’s focus on AI workload optimization positions it to benefit from data infrastructure modernization. Strong unit economics, improving FCF, and a broad developer ecosystem create a defensible moat. Valuation remains rich at ~12x forward sales, but margin expansion potential and operating leverage could sustain premium multiples.

Pitch Summary:
AppLovin was a top contributor during the quarter. The company continues to benefit from its advanced AI-powered ad engine (AXON) that enhances ad targeting and drives better ROI for mobile app developers. Strong performance in the ad tech space reinforced its growth trajectory.

BSD Analysis:
AppLovin’s evolution from a mobile gaming publisher to a leading AI-driven ad optimization platform is creating sustained operating leverage. The AXON 2.0 engine is delivering double-digit ROAS improvements for clients, enhancing stickiness and expanding market share. EBITDA margins reached 45%, supported by disciplined cost control and high data-driven monetization efficiency. AppLovin’s shift toward software-centric recurring revenue and partnerships with large developers diversifies growth away from cyclical advertising. At 14x forward EBITDA, the stock remains attractively valued for a firm compounding 25%+ annually.

Pitch Summary:
Apple contributed positively to performance during the quarter. Continued demand for services and installed-base growth offset hardware cyclicality. Its ecosystem stickiness and ability to monetize users through digital subscriptions underpin its steady cash generation and strong shareholder returns.

BSD Analysis:
Apple’s diversified ecosystem of devices and services continues to drive durable cash flow generation despite macro softness. With an installed base exceeding 2.2 billion active devices, recurring service revenue now exceeds $100B annually, accounting for over 25% of total sales. Hardware replacement cycles are stabilizing, and AR/VR integration through Vision Pro could unlock new verticals. The company maintains $165B in cash and short-term investments, enabling aggressive buybacks and dividends while sustaining R&D intensity. Trading at ~28x forward earnings, Apple’s steady margin expansion and fortress balance sheet support a defensive yet growing profile.

Pitch Summary:
NVIDIA was among the top contributors to performance in the NCG Large Cap Growth strategy. The company continues to benefit from rapid adoption of AI workloads, data center expansion, and demand for high-performance computing chips. Its ability to innovate across GPU and software stacks reinforces its leadership in accelerated computing.

BSD Analysis:
NVIDIA continues to dominate the AI semiconductor ecosystem, driven by unparalleled GPU architecture, proprietary CUDA software, and vertical integration across data centers and AI infrastructure. Data center revenue rose over 50% YoY, fueled by hyperscaler demand and inference workloads. Margins remain robust above 70%, with sustained pricing power across its H100 and B200 series chips. The firm’s pivot toward networking and software-as-a-service offerings enhances recurring revenue visibility. With a pristine balance sheet, $40B+ in annualized FCF, and strategic partnerships with leading AI firms, NVDA’s fundamentals justify its premium multiple and position it as a cornerstone of the AI revolution.

Pitch Summary:
Cantrip raised new capital at approximately three times the valuation of the fund’s January 2024 investment, reflecting rapid growth and strong market traction. The company’s management has demonstrated exceptional capital efficiency, scaling distribution while maintaining profitability discipline.

BSD Analysis:
Cantrip’s latest financing at a 3x markup validates the accelerating demand for THC and CBD-infused beverages within the regulated consumer market. The management team’s focus on capital efficiency and scalable distribution differentiates Cantrip from peers in a sector often constrained by overexpansion. With expanding retail partnerships, improving gross margins, and early evidence of repeat customer adoption, Cantrip appears poised to capture a dominant position in the emerging cannabis beverage category. The company’s asset-light model and profitability trajectory provide a rare blend of growth and risk control.

Pitch Summary:
Glass House became available for trading on Robinhood this quarter, broadening retail investor access and visibility. As one of the largest vertically integrated cannabis companies in California, the listing enhances liquidity and exposure ahead of potential federal reform. The company remains well-positioned to capitalize on brand strength and scale advantages as investor access improves.

BSD Analysis:
The listing on Robinhood marks a critical inflection for Glass House, providing improved market access and liquidity at a time when institutional capital remains cautious. The company’s vertically integrated model—spanning cultivation, processing, and retail—provides operational leverage in the largest U.S. cannabis market. With EV/EBITDA under 6x and expanding wholesale margins, Glass House stands to benefit from both improved investor sentiment and incremental pricing normalization. Potential federal rescheduling or SAFE Banking progress could catalyze significant valuation uplift relative to peers.

Pitch Summary:
Vireo experienced significant volatility this quarter, dropping from $0.70 to $0.32 due to a likely portfolio liquidation, before rebounding on major positive developments. The company received approval to commence adult-use cannabis sales in Minnesota, which should add $30–45 million in EBITDA to its existing $100 million run rate. Vireo also acquired the senior debt of Schwazze, a distressed operator in Colorado and New Mexico, at around 3x EBITDA—a highly accretive move. Management expects Q3 results to show strong growth and guidance improvements. We remain bullish given the undervaluation, trading at roughly 4x its 2026 EBITDA estimates while growing 50–100% year over year.

BSD Analysis:
Mindset Value takes a deeply fundamental and opportunistic view on Vireo, emphasizing its positioning as one of the best risk-reward setups in U.S. cannabis. The Minnesota adult-use launch provides near-term EBITDA expansion and validates the company’s vertically integrated model. The Schwazze debt acquisition adds optionality for asset consolidation at attractive valuations. Despite volatility in OTC markets, Vireo’s forward EV/EBITDA multiple near 4x appears substantially below peers trading at 7–9x. With projected EBITDA doubling within 18 months and catalysts from state-level reform and cross-market synergies, Vireo is positioned for re-rating as liquidity and scale improve.

Pitch Summary:
Carrier’s shares declined despite meeting earnings expectations, as investors focused on weakness in U.S. residential HVAC orders and unfavorable product mix. CEO David Gitlin warned of lower Q3 volume, citing a 30% reduction in July industry volumes and similar declines expected through September. Elevated rates and dealer destocking pressured demand.

BSD Analysis:
Carrier’s recent share-price weakness looks more cyclical than structural, driven largely by a sharp downturn in U.S. residential HVAC orders and an unfavorable mix shift rather than any erosion in the company’s competitive position. Management flagged a roughly thirty percent industry volume drop in July with similar declines expected through September, reflecting dealer destocking and the drag from elevated interest rates on housing-related demand. These headwinds are painful in the short term, but they are classic late-cycle dynamics that tend to reverse as housing stabilizes and inventories normalize. Carrier still controls valuable HVAC franchises with strong pricing power, entrenched distribution, and large installed bases that generate recurring service and replacement revenue. The company is also leveraged to secular tailwinds in energy efficiency and electrification, both of which will require higher-value HVAC systems over time. As mix normalizes and rate pressure eases, Carrier’s earnings should rebound meaningfully, aided by ongoing cost initiatives and portfolio simplification. For investors with a medium-term lens, the current reset provides an opportunity to buy a high-quality HVAC leader at a discounted valuation relative to its long-term cash-flow potential.

Pitch Summary:
GE Aerospace delivered strong quarterly results with more than 20% growth across key metrics—orders, revenue, operating profit, and EPS. The Commercial Engines & Services segment saw a 29% rise in service revenue and a 45% increase in engine units, supported by backlog strength and improving supply chains. The company raised FY2025 guidance and long-term targets.

BSD Analysis:
GE Aerospace continues to demonstrate why it is emerging as one of the strongest pure-play aerospace franchises, posting more than twenty percent growth across orders, revenue, operating profit, and EPS in its latest quarter. The commercial engines and services division remains the core engine of value, with service revenue up nearly thirty percent and engine unit deliveries climbing forty-five percent as supply-chain conditions finally improve. A record backlog provides multi-year visibility into both new engine sales and higher-margin aftermarket work, giving GE one of the clearest earnings runways in the industrial space. The company’s raised 2025 guidance and upgraded long-term targets reinforce that the current momentum is not a one-off bounce from pandemic lows but rather a sustained reacceleration. GE is also benefiting from the structural shift toward next-generation, fuel-efficient engines, which tend to carry richer service economics over the life of the platform. With operating leverage building and cash conversion improving, GE Aerospace is positioned for several years of double-digit profit growth. At current valuation levels, investors are still not fully pricing in the durability of its aftermarket-driven cash flows or the strategic advantage of its large installed base.

Pitch Summary:
Thermo Fisher’s stock climbed 9% following better-than-expected Q2 2025 results, with revenue of $10.85B versus $10.68B consensus and EPS of $5.36/share versus $5.22/share. Organic growth of 2% and reaffirmed long-term guidance reversed poor sentiment and re-rated shares.

BSD Analysis:
Thermo Fisher’s stronger-than-expected Q2 results helped reset sentiment around a stock that had been weighed down by concerns about slowing demand in research and bioproduction. Revenue and EPS both beat consensus, and even modest two percent organic growth was enough to reassure investors that the business is stabilizing after several choppy quarters. The reaffirmed long-term growth framework is particularly important, signaling confidence in the durability of Thermo Fisher’s diversified portfolio across instruments, consumables, diagnostics, and contract manufacturing. The company’s scale and breadth give it a unique competitive advantage: customers rely on Thermo Fisher not for a single product but for end-to-end solutions that embed the company deeply into scientific workflows. This creates recurring revenue streams and high switching costs, both of which underpin resilient cash generation even when individual end markets fluctuate. With sentiment improving and execution back on track, Thermo Fisher looks positioned for a multi-quarter re-rating as investors regain confidence in its long-term compounding profile. The company remains one of the highest-quality platforms in life sciences tools, and the recent pullback appears to have overstated short-term headwinds relative to its structural strengths.