Investment Pitches

Pitch Summary:
Applied Materials (AMAT) is the arms dealer of the semiconductor revolution. It dominates wafer fabrication equipment just as AI, advanced packaging, and memory capex ramp globally. Secular demand for AI chips, 3D NAND, and foundry upgrades offsets near-term export-control noise. Insiders are buying, margins are expanding, and free cash flow is explosive. It’s the quiet engine behind every chip cycle—cyclical, yes, but structurally indispensable.

BSD Analysis:
The Insiders Fund views AMAT as essential to the AI semiconductor supply chain. Strong FCF, margin expansion, and capital returns underpin bullish sentiment. Valuation remains compelling at ~17x forward earnings.

Pitch Summary:
It’s the undisputed king of GLP-1 weight loss/diabetes drugs with Mounjaro and Zepbound, creating a multi-hundred-billion market. Alzheimer’s drug donanemab adds a second blockbuster growth engine. Strong IP, manufacturing scale, and payer adoption build a moat. Risks—pricing pressure, competition (Novo Nordisk), and trial setbacks—are dwarfed by secular tailwinds in obesity and aging demographics. In short: Lilly is a generational growth story worth owning despite nosebleed valuation.

BSD Analysis:
Alpha Wealth’s bullish thesis highlights Eli Lilly’s GLP-1 dominance and innovation pipeline. With >30% revenue growth, 20%+ margins, and robust IP, valuation at 45x earnings is justified by durable secular demand.

Pitch Summary:
AppFolio is a stealth fintech wrapped in boring property management software. Sticky SaaS base, expanding payments, AI-powered workflow automation, and a landlord class that can’t function without it. The Street still values it like a mid-tier vertical SaaS, but it’s morphing into the Stripe of rental cash flow. Every rent check, every late fee, every maintenance payment—skim, scale, repeat. Margin expansion is baked in; the multiple isn’t.

BSD Analysis:
The fund’s conviction in AppFolio lies in its scalable SaaS ecosystem and payments growth. With 25%+ operating margins and high retention, upside remains underappreciated. AI tools and vertical dominance create structural leverage.

Pitch Summary:
Rockwell Automation is the pure-play bet on factory digitization. Its moat is sticky, mission-critical automation software and hardware that enable manufacturers to boost efficiency, safety, and uptime. Secular tailwinds—reshoring, labor shortages, electrification, and AI-driven industrial automation—give it years of demand runway. With recurring revenue growth, strong pricing power, and capital-light margins, ROK is a high-quality compounder in a world where industrial efficiency is gold. It’s the picks-and-shovels play for the smart factory revolution and riding the wave of U.S. industrial policy ‘build it here.’

BSD Analysis:
The Insiders Fund’s thesis sees Rockwell as a prime beneficiary of automation and reshoring. With robust FCF yield (~4%) and structural growth, it commands premium valuation at ~25x EPS. Digitization and AI integration reinforce long-term compounding.

Pitch Summary:
Axon isn’t just tasers—it’s a monopoly on public safety tech. The real play is its SaaS cloud empire (Evidence.com), locking in police with recurring revenue, AI video tools, and sky-high switching costs. Government budgets make it recession-proof, and global + enterprise expansion adds a decades-long runway. Think “AWS for law enforcement data” with a razor-and-blades model. Owning Axon is betting on mandatory tech, sticky contracts, and unstoppable growth in transparency and accountability.

BSD Analysis:
The Insiders Fund underscores Axon’s SaaS transformation and dominant ecosystem. With recurring revenue exceeding 75% and 25% EBITDA margins, valuation remains justified. Secular tailwinds in public safety digitization sustain growth.

Pitch Summary:
Energy Transport is a tollbooth on the energy highway—mission-critical pipelines moving natural gas to power-hungry regions. With regulated contracts, inflation-protected cash flows, and a yield north of 8%, it offers steady income while the world scrambles for reliable energy infrastructure. In a market chasing tech momentum, ET is the boring cash machine nobody wants until they realize utilities can’t run without it.

BSD Analysis:
The Insiders Fund highlights ET’s low-risk cash flow model and high dividend yield. With stable EBITDA growth, 1.8x coverage, and insider accumulation, the 8% yield looks sustainable. The fund views it as a core inflation-hedge asset.

Pitch Summary:
We leave our thesis unchanged. Alphabet is up 34% plus from where we initiated our purchase at the beginning of last quarter. Alphabet aka Google is a fortress of recurring revenue: 90%+ gross margins in Search, unmatched AI/ML scale, and YouTube/TikTok-level engagement at half the valuation. Cloud is finally profitable, advertising spend rebounds with GDP, and AI agents will supercharge monetization. Regulatory headwinds are loud but toothless—meanwhile, Google’s balance sheet is bulletproof with $100B cash and relentless buybacks. It’s the cheapest “AI monopoly” on the market, hiding in plain sight.

BSD Analysis:
The Insiders Fund is strongly bullish on Alphabet’s AI moat and recurring-revenue dominance. With >25% FCF margins, net cash, and 20x forward P/E, the stock remains undervalued versus peers. AI-driven ad and cloud tailwinds justify premium re-rating.

Pitch Summary:
With the case of Lam Research, my expectations were for the business to grow its intrinsic value at a rate greater than 10%, so our required discount at our first purchase was slightly lower than usual. We would wind up purchasing many more shares in April when that discount did approach the proverbial 65-cent-dollar. Today, I have similar expectations for Lam, yet the stock price has nearly doubled from our initial purchase and nearly tripled from the April lows! The prospective returns seem far less appealing at today’s price than they did earlier this year. Of course, the future could prove my expectations to be too conservative, but I am comfortable with the decision to trim over the course of the quarter, before inevitably selling all in the early days of the fourth quarter.

BSD Analysis:
This is a valuation-driven bear/exit: despite strong secular WFE demand, multiple expansion has outpaced intrinsic value growth. At ~20x+ forward EPS versus mid-cycle teens, upside looks limited absent a new capex leg. With memory/foundry cycles volatile and export controls a swing factor, trimming into strength is prudent.

Pitch Summary:
CSX’s business did not quite develop how I had anticipated due to some unpredictable and unavoidable issues. Shortly after our initial investment, hurricanes Helene and Milton severely impacted their network and led to service disruptions whose consequences were long-lasting. This again made it more difficult to see the improvements that CSX has made in service levels over the last several years. These were setbacks, but not insurmountable issues. Instead, the largest issue had to do with the competitive situation after the Union Pacific and Norfolk Southern merger was announced. Simply put, I believe that CSX will have a difficult time competing with a fully integrated, coast to coast network. It seems increasingly likely that the deal will be approved, and BNSF does not seem to have any appetite to merge with CSX themselves. Even worse, the commotion was a large source of distraction, and the failure to be acquired angered shareholders who decided to jettison the CEO. What a mess!

BSD Analysis:
The letter outlines a bearish shift driven by exogenous disruptions and, more importantly, structural competitive risk from a UP/NSC coast-to-coast network. With operating efficiency momentum obscured and leadership turnover, CSX faces potential share and pricing pressure. While rail valuations are mid-teens P/E, CSX’s risk/reward skews negative absent clear offsets (e.g., service differentiation or alliances). Weather normalization may help, but network reach remains a strategic disadvantage.

Pitch Summary:
During the quarter, we made a new investment in Progressive (PGR), which I believe is a great example of sharing economies of scale with customers. Progressive is currently the second largest auto insurer in the United States, and additionally has small lines of business writing homeowners, renters, and commercial insurance. Since the 1960’s, Progressive has been a leader in using data and analytics to profitably underwrite its policies and has had a cheaply available direct to consumer channel that lowers operating costs for the insurer. This reliance on data and analytics and leaner cost structure leads to Progressive being able to offer highly competitive rates on its policies that competitors struggle to match. Since 1971, Progressive has targeted a 96 combined ratio, which means that for every $100 dollars in premiums that they collect, they aim to keep $4 in profit after paying out all claims and underwriting expenses. By sticking to a standard 4% underwriting margin, Progressive has been able to share all its scale efficiencies with its policyholders. Any savings that Progressive generates from better underwriting results in lower premiums paid by its customers, which attracts more customers, and subsequently lowers costs through better data and more policies over which to spread fixed expenses. Most other insurers do not operate this way. In fact, the only other auto insurer who is known for pursuing a similar strategy is Berkshire Hathaway’s GEICO, and is still instead known for impressive expense management rather than their loss ratios. Instead, many other insurers let the marketplace influence their pricing strategies, choosing to lower their premiums during soft markets to attract more customers, which results in losing money on those policies once the cycle turns, and then losing those customers on the other side once they are forced to ratchet up their premiums. As the low-cost option, Progressive takes share when competitor policyholders begin to shop around once their premiums rise. Admirably, Progressive aims to make money from writing insurance policies. As funny as that may sound, this is in stark contrast to the rest of the industry, which has an average combined ratio of 100 (no underwriting profits) and attempts to make up for it by investing the floated premiums. This focus on being profitable on the aggregate, but not individually, leads to a more relaxed attitude towards expense management. Progressive is different. The company was an early adopter of direct-to-consumer, which reduces agent commissions, and has also automated large components of underwriting and claims processing, which results in a lower cost structure. And again, crucially, these savings are passed on to the customer in the form of lower premiums. Insurance pricing is somewhat of a black box; what I get quoted may be very different than what you are quoted from each carrier. Each insurer can also have a wildly different policy mix, whether by customer segment or by policy type (liability or full coverage, for example). Thus, comparing average rates can be difficult. However, we know the following: (1) customers will almost always go with the cheapest policy that meets their needs, and (2) Progressive has grown policies-in-force by nearly 10% per year over the last ten years. Data from industry and consumer surveys paint a similar picture and often show that Progressive offers rates that are anywhere from 10-20% lower than the national average, and typically far below other major carriers like State Farm and Allstate. Most notably, this implies that if Progressive were to price their policies at the national average rate, their targeted 96 combined ratio would actually be in the low to mid 80s. I believe that Progressive still has a long runway for growth despite their current ~16% market share. State Farm peaked at just under a quarter of the market in the 1990s, and it does not seem unreasonable to assume that Progressive could also reach this size. The total number of registered vehicles in the United States grows between 1-2% per year, and Progressive should be able to continue to take share from large and small competitors alike. Progressive could grow their policies-in-force by an average 6% per year over the next decade before running into the 25% ceiling, and it is not clear to me that this should be the theoretical maximum. An additional 4-5% in annual rate increases implies 10% normalized growth over the next ten years, to which the market does not seem to be charging very much for. The consensus is that Progressive is currently overearning, and that a softening property & casualty market will depress earnings in the near term. That is true to some extent. However, over penalizing the company for short-term headwinds overlooks the long-term value that they will create. Progressive is an outstanding business that will strengthen as a result of the insurance cycle, and their 10-to-20-point underwriting advantage is set to grow even larger over time as they pass savings on to their customers.

BSD Analysis:
The manager’s thesis is that Progressive’s data-driven underwriting and low-cost, direct model create a compounding “scale economies shared” flywheel. With a long-term 96 combined ratio target and policy growth near 10% annually, PGR consistently gains share while sustaining underwriting profit. At ~15–18x forward EPS and sub-0.3x debt/cap, valuation is reasonable given double-digit normalized growth, improving expense ratio, and recurring rate actions. Key catalysts include continued share gains versus agency-heavy peers, automation of claims/underwriting, and favorable pricing cycles. Risks are regulatory pressure and severity inflation, but Progressive’s pricing precision and cost discipline mitigate them.

Pitch Summary:
Pennant shares underperformed due to initial proposed Medicare reimbursement cuts. However, management expects final rates to be more favorable, positioning for earnings recovery. The firm continues to execute a disciplined acquisition strategy focused on underutilized assets.

BSD Analysis:
Pennant’s local-operator model and shared service efficiencies drive scalable growth in post-acute care. Demographic tailwinds, efficient capital allocation, and likely regulatory normalization offer upside. Shares remain undervalued relative to peers, providing asymmetric risk/reward as reimbursement clarity improves.

Pitch Summary:
Limbach detracted early in the quarter on weak guidance and communication issues but rebounded as management clarified near-term integration plans and reaffirmed long-term growth. The company’s shift toward direct owner relationships enhances recurring revenue and profitability stability.

BSD Analysis:
Despite short-term volatility, Limbach’s owner-direct model drives margin resilience and recurring cash flow. Strategic focus on campus-style facilities in healthcare and industrial markets supports steady backlog growth. With improving communications and integration synergies, valuation near 10x forward EBITDA remains attractive.

Pitch Summary:
Vital Farms was a top contributor to Fund performance, supported by earnings that beat expectations and raised guidance. The company continues to grow its farm network and benefits from rising consumer demand for sustainable and ethical food sourcing.

BSD Analysis:
Strong brand equity, consumer focus on animal welfare, and supply-chain transparency provide Vital Farms with durable pricing power. Expanding distribution and steady margin improvement through scale justify a premium valuation within the specialty food category.

Pitch Summary:
Impinj shares rose sharply after stronger-than-expected results and continued customer adoption of RFID technologies. Its superior read range and signal quality differentiate its offerings. Walmart’s expansion of Impinj systems from apparel into general merchandise and food, along with adoption by UPS and FedEx, reinforced confidence in the company’s growth trajectory.

BSD Analysis:
With leading IP and hardware in RAIN RFID, Impinj is well-positioned to capture a growing share of global asset tracking demand. Expanding enterprise adoption in retail and logistics supports secular tailwinds. Valuation remains justified given strong gross margins, accelerating revenue visibility, and early-stage penetration in key verticals.

Pitch Summary:
Willdan Group was one of the top contributors to the Fund during the quarter after posting strong earnings and raising guidance. The company’s software and analytics help utilities improve energy distribution efficiency, benefiting from surging demand from data centers and strained energy production due to California wildfires. Large multi-year contracts provided strong visibility into future revenue and profit growth.

BSD Analysis:
Willdan’s business model aligns with the structural shift toward grid modernization and energy efficiency. Its recurring contracts with major utilities create predictable revenue streams, while data-center demand for optimized energy distribution supports sustained double-digit growth. Trading near 18x forward earnings, Willdan’s combination of software leverage and infrastructure exposure provides a defensive yet high-growth profile.

Pitch Summary:
Knife River’s localized aggregates network offers major competitive advantages due to high transport costs. With #1 market positions in 75% of served areas, pricing discipline and acquisitions underpin its growth. Baillie Gifford expects margin expansion as management executes operational improvements.

BSD Analysis:
Knife River’s regional dominance and disciplined M&A make it a steady compounder in infrastructure spending. Strong cash flows, market leadership, and inflation-linked pricing provide resilience amid cyclical swings.

Pitch Summary:
Baillie Gifford participated in Figma’s IPO, citing its dominant 80%+ UI design market share and network effects driving enterprise expansion. The firm believes Figma will evolve from a design tool into a central AI-augmented creation infrastructure with CEO Dylan Field as a visionary founder leading growth.

BSD Analysis:
Figma’s entrenched enterprise position and scalable SaaS economics underpin robust revenue visibility. AI integration enhances productivity moat, supporting durable 30%+ growth potential. Early monetization and large TAM justify premium valuation.

Pitch Summary:
Finch’s share price rose to $12.28 at the end of the third quarter, up from $11.30 at the start of the year. As a reminder, Finch won a jury trial in August 2024 against Ferring Pharmaceuticals, with the jury finding that Ferring infringed three of Finch’s patents. The verdict awarded Finch approximately $30 million in a one-time licensing fee and pre-trial interest, plus ongoing royalties to be determined by the judge and post-trial interest. Importantly, the jury also found willful infringement, opening the door for enhanced damages up to three times the jury award. When I first discussed Finch in January, I had expected a post-trial decision by the end of the first quarter. That obviously hasn’t happened yet, but the potential outcome makes the wait worthwhile. Even under the worst-case scenario, without any enhanced damages, Finch shares are worth at least double their current price. I won’t speculate further on timing. What I can say is that this is a situation worth waiting for, and we are content to do so.

BSD Analysis:
This is a legal-process catalyst with asymmetric payoff: a $30M base award plus ongoing royalties already secured by jury verdict, with willfulness enabling potential trebling. Timing slippage is the main risk, but even the manager’s “no-enhancement” downside implies >2x valuation upside. Liquidity and cash runway should be monitored; proceeds could fund pipeline or shareholder returns. A final judgment and royalty rate determination are the inflection points; any settlement could accelerate value realization.

Pitch Summary:
ENDI’s share price rose to $17.50 at the end of the third quarter, up from $11.43 at the start of the year. The company is essentially composed of two primary components: Its CrossingBridge asset management subsidiary, and a portfolio of cash and investments. CrossingBridge continues to perform exceptionally well. Assets under management grew to $4.2 billion at the end of the third quarter, up from $3.4 billion at the beginning of the year. Over the past twelve months, EBITDA totaled $9.2 million, with $3 million generated in the most recent quarter alone. On the balance sheet, ENDI holds approximately $53 million in cash and investments and $10 million in debt. At the current share price, ENDI’s market capitalization is about $95 million. Adjusting for net cash and investments and applying a forward annualized EBITDA run rate, the implied EBITDA multiple is roughly 4x. As you know, ENDI remains a highly concentrated position for us, though it now represents a smaller allocation than earlier in the year. I’m comfortable with this exposure for several reasons: • My direct involvement as a board member, • The company’s clear undervaluation, and • Its built-in diversification at the corporate level. On that last point, a look-through analysis shows that, at the end of ENDI’s most recent publicly reported quarter, it was as if Arquitos held roughly 38% of its portfolio in cash and highly liquid short-term investments, a meaningful buffer that reduces overall portfolio risk.

BSD Analysis:
The thesis is straightforward value: a cash-rich holdco with a growing, profitable asset-manager (AUM +24% YTD; TTM EBITDA $9.2M) trading near ~4x look-through EBITDA after net cash. Capital-light economics at CrossingBridge can compound as AUM scales, while balance-sheet liquidity (~$53M vs. $10M debt) provides downside protection and optionality. Key drivers are fee growth, margin expansion, and capital allocation (buybacks/specials or acquisitions). Governance alignment (PM on board) is a positive but concentrate risk warrants sizing discipline.

Pitch Summary:
Liquidia’s share price rose to $22.74 at the end of the third quarter, up from $11.76 at the start of the year. Our exposure is primarily through long-dated call options, reflecting my conviction in the company’s long-term potential. In May, Liquidia received FDA approval for its flagship product, Yutrepia, an inhaled formulation of generic treprostinil used to treat Pulmonary Arterial Hypertension (PAH) and Pulmonary Hypertension associated with Interstitial Lung Disease (PH-ILD). Yutrepia utilizes Liquidia’s patented PRINT® production technology, which creates precise, uniform drug particles. Clinical studies and now real-world experience show that PRINT improves treatment efficacy by delivering treprostinil more effectively to the deep lung with less patient effort and fewer side effects. Yutrepia’s commercial launch has been exceptional. FDA approval came in late May 2025, and Liquidia’s Q2 2025 corporate update reported more than 900 unique patient prescriptions and more than 550 patient starts within the first 11 weeks. CEO Roger Jeffs, who has previously stated that he believes Liquidia could capture 80% to 90% of the market, said that “initial demand has exceeded even [his] own high expectations.” My own channel checks, corroborated by other investment managers, suggest that Yutrepia’s launch has significantly outpaced sell-side analyst forecasts. At this stage, there is little for us to do but wait for the official data to validate what we are already seeing in the field. Despite this progress, Liquidia shares remain mispriced. The disconnect stems from two factors: 1. Overly conservative patient adoption estimates from sell-side analysts 2. Uncertainty surrounding ongoing litigation with United Therapeutics over the ‘327 patent The next month should be particularly interesting for Liquidia’s share price as the company has several corporate updates scheduled, including their Q3 report. I also expect a ruling in the ‘327 case shortly. Regarding the ‘327 patent dispute, the outcome will affect only Yutrepia’s PH-ILD indication, not its PAH sales. The most likely scenario is a complete win for Liquidia. Other potential outcomes include a modification to Yutrepia’s label or a royalty arrangement. While a favorable verdict is expected, and the judge already denied United Therapeutics’ attempts to block the PH-ILD launch at the preliminary injunction stage, legal outcomes are inherently unpredictable. Back in early 2024, I estimated a bull case of $100 per share and a base case of $75 per share by 2027. I continue to stand by those targets. Once the litigation is resolved and patient data are publicly confirmed, the door opens further for potential M&A activity.

BSD Analysis:
The manager’s case hangs on rapid Yutrepia uptake (900+ Rx / 550+ starts in 11 weeks) and favorable IP resolution—both tangible catalysts. With PRINT® enabling better lung deposition and tolerability, share capture against legacy nebulized treprostinil is plausible. Near term, Q3 data and the ‘327 verdict should reset sell-side adoption curves; downside is cushioned by PAH sales being unaffected by PH-ILD label risk. Valuation could inflect quickly if royalties or label tweaks replace injunction risk, and optionality includes strategic interest once litigation clears. Focus on gross-to-net dynamics and manufacturing scale as volumes ramp.