Investment Pitches

Pitch Summary:
Astera Labs was a leading contributor to performance, benefiting from continued AI infrastructure investment. The company’s semiconductors support advanced data movement across hyperscale data centers, a critical bottleneck in AI deployment. Management continues to execute well, with expanding design wins and margin improvement. Astera remains a core AI hardware enabler in the portfolio.

BSD Analysis:
Astera is riding the AI interconnect wave with purpose-built CXL, PCIe, and memory-connectivity chips that relieve bandwidth bottlenecks in data centers. It’s a pure-play on data movement, and demand is accelerating as AI architectures get more complex. Margins are strong, design wins are piling up, and the TAM expands with every new accelerator generation. If Astera executes, it becomes a core piece of the AI infrastructure stack. High-growth, high-quality silicon story.

Pitch Summary:
Amazon remains a key beneficiary of AI infrastructure investment. Capex acceleration within AWS is positioning the company for outsized growth in generative AI workloads. While retail margins remain under pressure, advertising revenue and cloud profitability continue to expand. We believe valuation remains reasonable relative to long-term earnings potential.

BSD Analysis:
KAR maintains a bullish stance on Amazon due to AWS leadership and advertising tailwinds. Trading near 20x EBITDA, improving operating leverage, and strong cloud demand support upside. e-commerce, AI, cloud, advertising, growth, valuation

Pitch Summary:
Microsoft continues to benefit from strong demand for AI-related cloud services. While capital expenditures are rising rapidly due to data center buildouts, we believe these investments will entrench Microsoft’s competitive advantage in AI infrastructure. The company’s diversified business mix and recurring revenue base underpin resilient growth even amid macro uncertainty. We view recent free cash flow weakness as transitory.

BSD Analysis:
KAR highlights Microsoft’s durable moat and leadership in AI-driven enterprise computing. Trading at ~29x forward earnings, strong Azure growth, and consistent buybacks reinforce the long-term bull case. cloud, AI, software, recurring revenue, capex, moat, growth

Pitch Summary:
Kennametal, Inc. (KMT) declined after reporting disappointing quarterly results and restating 2026 guidance below consensus. The company expects another down year for EPS, driven by negative volumes and continued end-market weakness. While broader economic uncertainty may affect the timing of a recovery, we anticipate an inflection in organic growth during the second half of 2026, supported by improving U.S. industrial activity, potential Fed rate cuts, reshoring trends, rising global auto production, and sustained strength in aerospace and defense. Meanwhile, KMT continues to maintain its commitment to shareholder returns via cash dividends.

BSD Analysis:
Kennametal’s near-term softness reflects cyclical industrial weakness, but structural efficiency gains and reshoring trends support medium-term recovery. Trading at ~12x forward earnings and yielding over 3%, the stock offers an attractive income and re-rating opportunity as U.S. manufacturing accelerates. Its exposure to aerospace, defense, and automotive end markets provides diversification, and management’s cost discipline should drive operating leverage once volumes rebound.

Pitch Summary:
Sphere Entertainment Co. (SPHR) advanced over the period, supported by strengthening business fundamentals and demand for The Wizard of Oz, which continues to outperform expectations. We expect financial results will keep ramping as Sphere scales its concert residencies, launches the capital-light ‘Sphere Network’ of smaller immersive venues domestically, and drives higher utilization across show types. We also anticipate incremental upside from advertising, sponsorship, and suite revenue. Additionally, international expansion plans beyond Abu Dhabi remain a strategic priority.

BSD Analysis:
Sphere’s scalable business model and strong demand for immersive live entertainment underpin long-term growth potential. The Las Vegas venue continues to exceed projections, and its expansion strategy into global markets can materially increase EBITDA. While early-stage and capital-intensive, the concept offers durable economics once utilization normalizes. Advertising and licensing revenues add recurring exposure, and at ~9x 2026E EBITDA, valuation appears attractive relative to growth trajectory.

Pitch Summary:
Brink’s Company (BCO), a provider of logistics and cash management services, jumped after surpassing quarterly earnings expectations and raising guidance. Financial highlights included broad-based organic revenue growth, stronger-than-anticipated profitability, and accelerating free cash flow generation. Additionally, the ATM Managed Services and Digital Retail Solutions segments expanded, with management anticipating sustained momentum through 2026. Strategic investments in technology and ongoing share repurchases underscore the company’s commitment to long-term growth and capital discipline.

BSD Analysis:
Brink’s continues to deliver consistent earnings growth supported by its global cash logistics network and technology-enabled services. With FCF yields near 9% and EBITDA margins expanding, valuation remains compelling at ~9x EV/EBITDA. Structural tailwinds from digital cash management and efficiency initiatives should drive sustained high-single-digit revenue growth. The company’s disciplined capital allocation—balancing M&A, debt reduction, and buybacks—reinforces long-term compounding potential.

Pitch Summary:
Resideo Technologies, Inc. (REZI) was the top contributor in the quarter driven by strong earnings and a subsequent raise in guidance. Organic revenue, EBITDA and adjusted EPS all exceeded expectations. The company also finalized its agreement with Honeywell, eliminating future financial obligations under their indemnification arrangement. In our view, REZI remains undervalued, with long-term growth supported by rising demand for connected smart home solutions and continued product innovation.

BSD Analysis:
REZI’s improving fundamentals, margin expansion, and exit from Honeywell indemnity constraints strengthen its balance sheet and valuation case. Trading at ~10x forward earnings and below peer multiples, the company’s focus on connected-home automation and smart security supports mid-teens EPS growth. Demand tailwinds from IoT adoption and resilient housing repair markets underpin long-term growth. Share buybacks and debt reduction further enhance capital efficiency. The combination of solid cash generation and underappreciated product innovation offers compelling upside potential.

Pitch Summary:
Prestige Consumer Healthcare Inc. (PBH), a marketer and distributor of over-the-counter pharmaceutical products. The company has a strong track record of innovation and strategic acquisitions to address unmet consumer needs. Since an acquisition in 2017, PBH has focused on deleveraging the balance sheet through free cash flow. As the company continues to address customer-need through innovation, we expect earnings growth to drive multiple expansion.

BSD Analysis:
Prestige continues to showcase the resilience of its niche OTC brand portfolio, with consistent pricing power and stable category demand supporting robust cash generation. Management’s playbook—acquire defensible brands, streamline costs, invest selectively—has produced dependable margins and steady deleveraging. The company’s asset-light model and disciplined expense control make earnings less cyclical than most consumer peers, and recent execution has kept gross margins firm even in a volatile retail environment. Prestige doesn’t chase big, flashy innovation; instead it leans into predictable, repeat-purchase categories where it can maintain leadership. The market still assigns a discount because the growth is steady rather than spectacular, but the reliability and cash conversion justify a higher valuation. As leverage declines and the M&A engine reopens, PBH remains a smooth, low-volatility compounder.

Pitch Summary:
Global provider of payment processing and financial services technology solutions, Fiserv, Inc. (FI) declined during the quarter amid investor concerns over increased competition and slowing growth. We believe much of the softness reflects weaker non-Clover U.S. small/medium business trends and tough comparisons in Argentina. However, we expect organic growth to reaccelerate, led by strength in the enterprise segment. Clover remains well positioned in the $3 trillion+ U.S. SMB market, supported by strong software capabilities. FI’s broader fintech portfolio—including card issuing, digital banking, and embedded finance for clients like DoorDash and Walmart—offers exposure to secular growth drivers. The company continues to generate strong free cash flow and return capital via buybacks. We believe near-term concerns are overstated and view FI as a compelling opportunity to own a leading fintech platform with durable growth potential.

BSD Analysis:
Fiserv continues to compound quietly but relentlessly, leveraging its broad footprint in acquiring, digital banking, and core processing to deliver steady, high-quality earnings growth. Clover remains the crown jewel, gaining share across SMBs with expanding software monetization and improving unit economics. Bank technology remains sticky and highly recurring, providing an earnings base that offsets competitive noise in merchant acquiring. Operating discipline is strong, and free-cash-flow generation continues to rise as integration efficiencies deepen. Despite its scale, Fiserv is still underappreciated for its mix of resilience and secular growth, trading at a lower multiple than its profitability profile warrants. With digital payments adoption accelerating and Clover scaling into a true platform asset, FI remains one of the strongest long-term compounders in fintech.

Pitch Summary:
Toy manufacturer Mattel, Inc. (MAT) also traded lower on mixed earnings, which were impacted by timing shifts in retailer order patterns due to tariff uncertainty while consumer demand remained healthy. Despite macro headwinds, gross margins expanded and EPS topped consensus, reflecting continued progress on profitability initiatives. While 2025 guidance was set slightly below initial expectations, management still expects revenue growth and market share gains. With resilient point of sale, disciplined cost control and active buybacks, we believe the quarter highlights operational momentum. Mattel’s ability to monetize its IP through future media projects supports our view that shares remain undervalued.

BSD Analysis:
Mattel continues to benefit from brand revitalization and disciplined portfolio management, with Barbie’s resurgence proving the company can still generate cultural relevance and outsized licensing economics. Cost efficiencies and supply-chain improvements are bolstering margins even as demand remains choppy across toy categories. The company’s entertainment strategy — films, content, and licensing — provides attractive high-margin revenue streams beyond traditional toys. Despite execution improvements, Mattel trades at a discount to its IP quality and cash-flow potential, partly due to macro toy demand noise. With a healthier balance sheet, better capital allocation, and expanding brand monetization, MAT remains a credible turnaround-to-compounder story.

Pitch Summary:
CarMax, Inc. (KMX), a leading used and wholesale vehicle auction operator, was the largest performance detractor during the period, following disappointing earnings resulting from lower unit sales and increased loan loss provisions. Management cited normalized demand after customers sought to buy in advance of potential tariffs last quarter. The rise in provisions was concentrated in pandemic-era loans, which have underperformed, while newer vintages are tracking in-line with expectations indicating the credit deterioration is largely contained. We view the weakness as cyclical, reflecting broader macroeconomic and industry volatility rather than structural concerns. As the market share leader in used vehicles, we believe CarMax’s scale and omnichannel capabilities position it well for long-term growth once conditions stabilize.

BSD Analysis:
CarMax remains the dominant used-car retailer, with its omnichannel platform providing a structural advantage in sourcing, pricing, and customer experience. Affordability constraints and tight credit have weighed on volumes, but margins remain resilient due to disciplined inventory management and strong retail/wholesale mix dynamics. The company’s appraisal and sourcing engine is unmatched, giving CarMax an information advantage in a fragmented market. As credit conditions ease, KMX should regain volume momentum with attractive incremental margins. Despite near-term softness, the long-term thesis — scale, data, omnichannel leadership — is intact. The stock trades below normalized earnings power, offering a compelling setup for patient investors.

Pitch Summary:
Knowles Corporation (KN), a leading provider of audio components and precision electrical devices, rose on the back of strong quarterly results. Demand remains healthy across key markets, with the Precision Devices segment returning to growth as channel inventories normalized and improved operational efficiency aided margins. The company also returned capital to shareholders through share repurchases. Longer-term, we believe KN remains well-positioned to benefit from its focus on niche, market-leading positions in hearing health and precision devices.

BSD Analysis:
Knowles is reshaping itself into a more focused engineered-components business with stronger margin visibility and a clearer path to growth. The Precision Devices segment remains the standout asset, benefiting from secular demand in defense, medical, and industrial applications where performance and reliability command premium pricing. MEMS microphones remain steady, though not a major growth engine, and portfolio simplification continues to enhance returns. Cost actions and operational improvements are lifting margins, and cash flow is strengthening as non-core assets are pruned. Despite progress, the stock still trades below intrinsic value due to legacy skepticism and slow industry cycles. With a stronger portfolio and improving execution, Knowles looks primed for multiple expansion.

Pitch Summary:
Sphere Entertainment Co. (SPHR) advanced over the period, supported by strengthening business fundamentals and demand for The Wizard of Oz, which continues to outperform expectations. We expect financial results will keep ramping as Sphere scales its concert residencies, launches the capital-light ‘Sphere Network’ of smaller immersive venues domestically and drives higher utilization across show types. We also anticipate incremental upside from advertising, sponsorship, and suite revenue. Additionally, international expansion plans beyond Abu Dhabi remain a strategic priority. In our view, Sphere’s Las Vegas venue and its scalable franchise potential represent a compelling long-term opportunity that remains meaningfully undervalued.

BSD Analysis:
Sphere is an early-stage but high-upside experiential entertainment asset with a unique technological moat in immersive media, LED architecture, and live-event production. The Las Vegas Sphere is proving the concept, with strong demand and premium pricing validating the model’s earnings power once utilization ramps. MSG Networks provides a stabilizing revenue base, but the real story is Sphere’s long-term monetization — brand partnerships, IP licensing, global replica venues, and immersive content. Execution risk is high given capital intensity, but early performance suggests a path to strong incremental margins as scale builds. The stock trades with significant volatility due to uncertainty around profitability timing, but the long-term optionality remains enormous. If Sphere continues on its current trajectory, it could evolve into a high-margin experiential IP platform.

Pitch Summary:
Resideo Technologies, Inc. (REZI) was the top contributor in the quarter driven by strong earnings and a subsequent raise in guidance. Organic revenue, EBITDA and adjusted EPS all exceeded expectations. The company also finalized its agreement with Honeywell, eliminating future financial obligations under their indemnification arrangement. In our view, REZI remains undervalued, with long-term growth supported by rising demand for connected smart home solutions and continued product innovation.

BSD Analysis:
Resideo is quietly shifting from a chronic underperformer into a more disciplined operator as management drives meaningful cost reductions, simplifies the product lineup, and strengthens channel execution. The Products & Solutions segment is stabilizing with cleaner inventories and sharper pricing, while ADI Distribution continues to demonstrate durable growth and healthy margins. Operational improvements are finally showing up in cash flow, and restructuring charges that masked progress are now fading. The balance sheet is in better shape, giving the company room to selectively invest where it has clear competitive advantages. Yet sentiment remains anchored to its messy post–spin history, creating a valuation disconnect that doesn’t reflect the improving fundamentals. As execution firms up, Resideo screens like a credible self-help story with more upside than the market is willing to price in.

Pitch Summary:
Fiserv, Inc. (FI), leading global provider of payment processing and financial services technology solutions. The company possesses unmatched scale and cross-selling abilities across its businesses, including its core financial technology solutions, merchant acceptance and payment processing. These innovative technologies are deeply entrenched in client operations, providing attractive and predictable recurring economics representative of a wide moat, high switching cost service business. A recent pullback in the stock provided an attractive entry point. Shares came under pressure due to investor concerns around Clover volumes decelerating. However, the deceleration was due to one-time items and growth is expected to accelerate later this year. In our view, FI offers a rare opportunity to own a best-in-class financial technology business that should benefit from the secular demand for innovative financial technology.

BSD Analysis:
Fiserv continues to demonstrate why it’s one of the most durable payment-infrastructure platforms, combining merchant acquiring, banking technology, and digital payments into a sticky, high-recurring revenue machine. Clover remains a standout asset, delivering strong growth and increasing monetization as it scales with SMBs. The company’s cost discipline and ongoing integration efforts continue to expand margins and free cash flow. While competition in acquiring is real, Fiserv’s breadth of solutions and deep client relationships provide meaningful insulation. The stock trades below its quality profile, reflecting lingering noise around integration rather than fundamentals. With accelerating digital adoption and strong operating leverage, FI remains a core compounder in fintech infrastructure.

Pitch Summary:
We added Arthur J. Gallagher & Co. (AJG), the world’s largest insurance broker focused on middle-market clients. Shares came under modest pressure during the quarter due to a delay in closing its $13.4 billion acquisition of AssuredPartners. The deal ultimately closed in August 2025, with management now projecting stronger synergies than initially anticipated. Looking ahead, we believe AJG’s scale, specialized expertise, and highly scalable platform position it well for continued organic growth and margin expansion. The resilience of the global insurance market further supports its long-term outlook, reinforcing our confidence in AJG as a core holding.

BSD Analysis:
Gallagher continues to deliver an elite combination of steady organic growth, disciplined M&A, and durable margin expansion. Its brokerage engine benefits from firm pricing across multiple commercial lines, while the company’s scale and specialty expertise give it a competitive edge in placement and advisory. The company’s tuck-in acquisition strategy remains one of the best in the industry — low-risk, highly accretive, and seamlessly integrated. Cash flow is robust, credit metrics are pristine, and the company’s recurring revenue profile makes earnings remarkably resilient through cycles. While valuation screens full, AJG has consistently earned its premium. With strong pricing, expanding global presence, and disciplined capital deployment, Gallagher remains a top-tier compounder in financial services.

Pitch Summary:
Schlumberger Limited (SLB) traded lower during the quarter, pressured by a challenging macroeconomic environment. OPEC+ supply increases and heightened geopolitical uncertainty weighed on oil prices, dampening upstream investment activity. Revenue softness and margin pressure in the Reservoir Performance and Well Construction segments impacted results, despite solid contributions from Digital and Production Systems services. Looking ahead, we see medium-term tailwinds as national oil companies accelerate investment in long-cycle projects to offset expected production declines. With unmatched scale, broad technical capabilities, and strong exposure to resilient international markets, we believe SLB remains the best-positioned oilfield services provider to meet rising global energy demand.

BSD Analysis:
Schlumberger is benefiting from one of the most robust global upstream cycles in years, with international spending and offshore development driving strong, diversified growth. Its technology lead in digital drilling, subsurface imaging, and integrated production systems positions SLB as the premium provider in an industry increasingly prioritizing efficiency. Margins continue to expand as higher-value services gain mix share, and the company’s capital-light digital platform provides incremental earnings leverage. The balance sheet is strong, buybacks are accelerating, and cash conversion is trending at peak-cycle levels. Despite strong fundamentals, the stock trades at a modest multiple given macro energy noise. With a multi-year international and offshore upcycle intact, Schlumberger remains one of the highest-quality compounders in energy services.

Pitch Summary:
New holding and distributor of over-the-counter pharmaceutical drugs and products, Prestige Consumer Healthcare Inc. (PBH), also declined following mixed earnings results and a downward revision to full-year guidance. Sales were impacted by limited inventory in the eye care segment, but the announced acquisition of Pillar5, a leading sterile ophthalmic manufacturer, is expected to strengthen supply over time. While ophthalmic recovery will be gradual, PBH reaffirmed its free cash flow outlook, supporting continued share repurchases and strategic acquisitions. Outside of eye care, the core portfolio delivered as expected, including gross margin expansion.

BSD Analysis:
Prestige continues to execute a quiet but highly effective OTC brand strategy, focusing on niche, defensible categories with stable demand and strong cash conversion. The company’s asset-light model and disciplined pricing have kept margins resilient despite inflation and retailer inventory shifts. Integration of prior acquisitions remains strong, and management maintains a credible track record of deleveraging while expanding free cash flow. Prestige lacks the excitement of high-growth consumer names, but its consistency, visibility, and predictable cash generation are exactly what make it attractive. The stock trades below intrinsic value given its clean fundamentals and low-volatility profile. PBH remains a steady cash-flow compounder that tends to outperform when investors start rewarding durability over flash.

Pitch Summary:
Amazon remains a key beneficiary of AI infrastructure investment. Capex acceleration within AWS is positioning the company for outsized growth in generative AI workloads. While retail margins remain under pressure, advertising revenue and cloud profitability continue to expand. We believe valuation remains reasonable relative to long-term earnings potential.

BSD Analysis:
Amazon is a key beneficiary of the AI supercycle, with the thesis anchored entirely to the exponential growth and continued dominance of its cloud arm, Amazon Web Services (AWS). The ongoing CapEx acceleration for generative AI infrastructure is a strategic move, positioning AWS to capture outsized growth in training and inference workloads through its fully integrated platform, Amazon Bedrock. AWS is aggressively expanding its AI reach globally, evidenced by massive infrastructure deals and strategic hardware partnerships with NVIDIA and local AI leaders. While the low-margin retail business continues to face pressures, the high-margin Advertising and Cloud segments are successfully expanding their profitability, which directly funds the AI arms race. The stock, trading near 20x EBITDA, remains reasonably valued given the secular tailwinds, improving operating leverage, and AWS's undisputed leadership in the core cloud market.

Pitch Summary:
Microsoft continues to benefit from strong demand for AI-related cloud services. While capital expenditures are rising rapidly due to data center buildouts, we believe these investments will entrench Microsoft’s competitive advantage in AI infrastructure. The company’s diversified business mix and recurring revenue base underpin resilient growth even amid macro uncertainty. We view recent free cash flow weakness as transitory.

BSD Analysis:
Microsoft remains the ultimate AI infrastructure winner and the enterprise backbone of digital transformation, wielding an unparalleled ecosystem moat. Its core competitive edge is the OpenAI partnership, valued at a staggering $135 billion, and a contract that mandates OpenAI purchase $250 billion worth of Azure services through 2032. This deep integration, coupled with massive deals with other leaders like Anthropic ($30 billion), cements Azure's dominance in cloud AI workloads. The company is converting its AI leadership directly into revenue through Copilot integration across the Office 365 and Dynamics 365 suite, creating new, high-margin, recurring revenue layers. Despite rising capital expenditure for data center build-outs, its fortress balance sheet and high-teens ROIC ensure CapEx translates to structural, long-term competitive advantage. Trading at a justified premium of around 30x forward earnings, Microsoft offers sustainable double-digit growth and cash-flow durability.