Investment Pitches

Pitch Summary:
CD Projekt, our third-largest contributor since inception and still a top-three position, exemplifies what we’re finding offshore: quality businesses undergoing structural transformations that create significant mispricings. The company has historically been constrained by single-track game development, which capped reinvestment opportunities despite exceptional returns. With the transition to dual-track AAA production—Witcher 4 and Cyberpunk 2—and incremental projects through 2035, CD Projekt is moving from a cyclical hitmaker to a steady-state compounder. Margins remain among the highest in the industry (~39%), supported by a robust back catalogue and disciplined capital deployment. The shift to Unreal Engine 5 improves efficiency and scalability while reducing development risk. Dual AAA pipelines and geographic expansion to the U.S. diversify execution risk. We believe CD Projekt can now deploy capital at high returns across multiple projects, transforming the business from cyclical to compounding.

BSD Analysis:
CD Projekt’s multi-track model unlocks capital efficiency and growth durability. With 5 projects in the pipeline and strong IP in Witcher/Cyberpunk, earnings visibility improves substantially. Margins may compress modestly but remain elite. Valuation at ~7B USD versus peers suggests re-rating potential as execution proves out. Unreal 5 transition, external partnerships, and geographic diversification de-risk development cycles.

Pitch Summary:
I remain extremely bullish on our portfolio. Our gold mining equities remain very undervalued, and gold prices should skyrocket when the US superbubble inevitably bursts. For more information, please see my recent letters and interviews.

BSD Analysis:
The manager’s conviction in gold miners stems from macro dislocation risk and undervaluation relative to bullion. With global central banks accumulating gold and miners trading at ~0.8x NAV and 8–10x cash flow, upside could be material if real yields compress. Balance sheets are lean, and capital discipline remains high. The position serves as both a defensive inflation hedge and leveraged play on gold price appreciation.

Pitch Summary:
Lear was a contributor this quarter as shares rose following the announcement of a multi-year supply agreement with a leading EV manufacturer. The company’s Electrical Distribution Systems segment posted record revenue and backlog growth, offsetting softness in seating volumes. Management reiterated its long-term operating margin targets and capital return plans. We believe Lear remains undervalued relative to its strong free cash flow profile and exposure to secular electrification trends.

BSD Analysis:
Kennedy’s thesis emphasizes Lear’s transition to high-value electrical content and software integration. EV penetration and cost efficiencies enhance earnings visibility. At ~9x forward earnings and a 2% dividend yield, the risk/reward remains attractive.

Pitch Summary:
Rogers Corporation was a top contributor during the quarter as the company continued to benefit from robust demand for its advanced materials used in electric vehicles and high-frequency communications. The stock rallied following better-than-expected quarterly results driven by margin expansion and cost controls. Management raised full-year guidance citing stronger automotive and industrial end markets. We continue to view Rogers as well-positioned to capitalize on structural growth in EV adoption and 5G infrastructure buildouts.

BSD Analysis:
Kennedy Capital sees Rogers as a high-quality mid-cap materials play with cyclical tailwinds in EVs and communications. Trading near 13x forward EBITDA, the firm’s operational leverage and innovation pipeline provide upside. ROIC improvement and resilient margins justify continued bullishness amid secular demand for advanced materials.

Pitch Summary:
Siemens Energy, a leading gas-turbine manufacturer, is well placed to benefit from rising power demand. AI data centers are driving a step-up in electricity consumption and, given extended grid-connection timelines, gas turbines are uniquely positioned to meet this need through rapid deployment, low execution risk, and reliable output. Beyond AI demand, there are additional structural drivers including coal-to-gas transitions, renewables intermittency support, and load growth tied to EV adoption and reshoring.

BSD Analysis:
Stenham highlights Siemens Energy as an overlooked beneficiary of AI infrastructure growth and electrification. With an improving order backlog and margin recovery trajectory, valuation at ~8x EBITDA offers deep value amid secular power demand.

Pitch Summary:
TSMC is the world’s leading manufacturer of semiconductors, including those used in AI applications. Whilst the company has benefitted from the current demand environment, its position as a capacity-constrained near-monopoly in leading-edge chipmaking helps their ability to allocate capacity towards a variety of long-term secular growth trends if required.

BSD Analysis:
Stenham maintains a bullish stance on TSMC as the key enabler of global semiconductor manufacturing. With industry-leading process technology and structural pricing power, the firm trades near 17x forward earnings with strong ROIC. Capital intensity remains high but manageable given its near-monopoly scale.

Pitch Summary:
Crane NXT (CXT) was initiated in the Small Cap Strategy during the quarter. CXT was spun off from Crane Corporation in 2023. The company has a strong foundation in security and authentication technologies and automated payment systems. It now operates through two segments: Crane Payment Innovations (CPI), which provides cash validation, payment acceptance, vending, kiosk automation, and cash processing systems across retail, gaming, and financial institutions, and Security & Authentication Technologies, which delivers anti-counterfeiting technologies for banknotes, identification documents, and branded goods. Since the spin, CXT has made two strategic acquisitions—OpSec Security (2024) and De La Rue’s Authentication Solutions (2025)—expanding its reach into brand protection, credentials, and digital authentication. The company’s proprietary micro-optic technologies are used by over 50 central banks. Management is applying the proven Crane Business System framework and maintaining conservative leverage. We believe CXT is well positioned in high-margin markets where security, authenticity, and trusted transactions are paramount. Its differentiated technology and disciplined capital deployment make for a compelling long-term opportunity.

BSD Analysis:
CXT’s defensive niche in authentication and payments offers secular growth tailwinds from digital security demand. With robust recurring revenue, high margins, and disciplined M&A, CXT fits SouthernSun’s focus on niche-dominant industrials. The spin-off discount provides multiple expansion potential as management executes integration.

Pitch Summary:
Stepan Company (SCL) was a detractor in the Small Cap strategy in the third quarter. The company continues to execute on its strategy to grow its functional surfactants, which serve the agriculture and oilfield market, as well as its Tier 2 and Tier 3 surfactant volumes, which represents sales to smaller customers formulating specialty products. The second quarter results reflected solid growth in these end markets. However, weakness in the commodity consumer product end markets offset growth in these areas, and overall Surfactant segment volumes were down 1%. In the Polymer segment, volumes were up 7% driven by strength in the North American and European rigid polyols end markets despite continued headwinds from a weak macro environment and tariff uncertainty. As of the end of the second quarter, SCL generated $197 million in trailing 12-month EBITDA, and management makes a strong case that the business should generate $60 million quarterly as some market headwinds abate and the recently installed new alkoxylation capacity in Pasadena, TX, comes online later this year. SCL ended the second quarter with net debt to trailing 12-months EBITDA of 2.9x, and we expect this ratio to come down now that the heavy investment period is behind them. Luis Rojo was promoted to the CEO position in October 2024 after serving as CFO for 6 years, and we have been impressed with his execution of the business strategy so far. SCL is recognized as an industry leader in formulating new products and applications for its surfactants and polymers, and we believe the company has developed valuable, long-term relationships with customers that will continue to generate steady cash flow.

BSD Analysis:
SCL offers a blend of specialty growth and cyclical recovery. Capacity expansion at Pasadena will enhance efficiency, while mix shift toward functional surfactants supports margin stability. Deleveraging trajectory improves financial flexibility. Trading at reasonable EV/EBITDA with solid customer stickiness, SCL looks positioned for moderate re-rating as macro headwinds fade.

Pitch Summary:
Darling Ingredients (DAR) was the top detractor in the Small Cap strategy in the third quarter after being a top contributor in the second quarter. DAR is the largest publicly traded company turning edible by-products and food waste into sustainable products and a leading producer of renewable energy. DAR has faced significant headwinds which have affected the share price for the past 2 years. This downturn is, in our opinion, at or near a bottom. We see several fundamental and regulatory changes supporting our view that top line and bottom-line results will inflect higher in 2026. Recent announcements from DC and from the company are supportive of our view. The base Food and Feed businesses are providing significant support for the struggling Fuel business – a natural hedge we have long discussed. In addition, the company’s vertically integrated supply chain and low-cost position have proven resilient in the face of such headwinds. We expect results for the remainder of 2025 to be challenged and believe this reality is more than accounted for in today’s share price. As the cycle turns, the operational improvements made the past couple of years together with an upgraded asset base will, in our opinion, provide a substantial boost to operating profitability and discretionary cash flow. While frustrated with the recent performance, we do believe some meaningful relief is on the horizon.

BSD Analysis:
Darling sits near cyclical trough with improving fundamentals. Regulatory clarity around renewable fuel credits and demand recovery in sustainable feedstocks should drive margin normalization. Strong vertical integration and cash generation from food/feed units cushion volatility. With FCF yield in mid-teens and leverage manageable, upside potential outweighs near-term weakness.

Pitch Summary:
Modine Manufacturing Company (MOD) was a top contributor in the Small Cap strategy during the third quarter. MOD is a leading thermal management company and since initiating the position earlier this year, the demand outlook for AI datacenters has increased dramatically, driving increased demand for Modine’s cooling equipment. To meet this strong demand, the company will invest $100 million in the next 12-18 months to increase capacity by roughly 80%. The balance sheet is in good shape with ND/Adj. EBITDA ~1x, and management plans to pause acquisitions for the next few quarters as it integrates three recent acquisitions, explores the sale of its light duty vehicle heat exchanger business, and executes on its data center investments. We remain impressed by CEO Neil Brinker and the strong leadership team he has assembled, and we believe they are well positioned to continue creating meaningful shareholder value.

BSD Analysis:
MOD represents one of the most direct beneficiaries of AI infrastructure buildout. Its data-center cooling business enjoys high incremental margins, and the $100M capex expansion positions it for multi-year secular growth. With ND/EBITDA at ~1x and rising returns on capital, valuation still screens attractive versus peers. Execution on asset sales and integration of acquisitions can unlock further upside.

Pitch Summary:
Brink’s Company (BCO) was the top contributor in the Small Cap strategy during the third quarter. BCO, a leading global provider of cash and valuables management, digital retail solutions (DRS), and ATM managed services (AMS), was a top contributor for the quarter. In the second quarter, the company delivered 16% organic growth in AMS and DRS while continuing to stimulate customer demand for outsourcing with financial institutions and convert whitespace opportunities in retail. These higher-margin, recurring revenue businesses now represent over 25% of total company revenue and are expected to continue delivering double digit organic growth for the foreseeable future. Free cash flow continues to improve with over $100 million generated in the quarter on EBITDA growth, continued capital efficiency and strong working capital performance. In addition, management has been disciplined and opportunistic with capital deployment – buying back $130mm in stock year to date with $85mm of that coming in 2q. We believe the current price affords share owners a nice opportunity to compound double digit returns over our investment time horizon with a strong balance sheet providing a backdrop for cash flow growth and a predictable and effective capital allocation strategy.

BSD Analysis:
Brink’s remains a compelling mid-cap compounder anchored by durable recurring revenue streams in DRS and AMS. With double-digit organic growth, strong free cash flow generation, and disciplined buybacks, the setup offers continued multiple expansion potential. Leverage is manageable, margins are expanding, and secular outsourcing trends in cash logistics and ATM services reinforce long-term earnings stability. valuation, cash flow, recurring revenue, buybacks, outsourcing, margin expansion

Pitch Summary:
We initiated a new position in Crane NXT (CXT) in the SMID Cap strategy during the quarter. CXT was spun off from Crane Corporation in 2023. We owned the parent company for several years, so we know the business well. CXT has a strong foundation in security and authentication technologies and automated payment systems. It operates through two primary segments: Crane Payment Innovations (CPI) and Security & Authentication Technologies. CPI provides a suite of payment solutions, including cash validation, vending, and kiosk automation, while the Security segment is a global leader in anti-counterfeiting technologies for banknotes and identification documents. Following acquisitions of OpSec Security and De La Rue’s Authentication Solutions, CXT expanded into brand protection and digital authentication. The company maintains a conservative balance sheet and consistent cash generation. We believe CXT’s differentiated technology provides pricing power and durable high margins, making for a compelling long-term opportunity.

BSD Analysis:
SouthernSun initiated CXT for its entrenched position in secure transactions and authentication. With recurring revenues, proprietary IP, and strong capital discipline, the firm offers durable compounding. Trading at ~12x EBITDA, FCF growth and strategic M&A enhance upside potential.

Pitch Summary:
WSO is the largest distributor of air conditioning, heating, and refrigeration products in North America. While second-quarter results held up relatively well with revenue down 4% and operating income up 1%, equipment volumes have been weaker than expected, declining roughly 12% year to date. Management attributes this primarily to lower new construction activity and a consumer shift from replacement to repair, noting that Watsco’s market share remains stable. We view these headwinds as temporary and continue to believe WSO’s competitive position within the HVAC/R distribution market remains strong. With no debt and $293 million in cash and short-term investments, the company is well positioned to pursue acquisitions across the highly fragmented $74 billion North American HVAC/R distribution landscape. We remain confident in Watsco’s long runway for both organic and inorganic growth, its owner-oriented culture, and its competitive advantages that increase with scale.

BSD Analysis:
SouthernSun highlights Watsco’s conservative balance sheet and dominant market share. With cash reserves and accretive M&A opportunities, the firm’s model supports steady growth. EV/EBITDA around 11x, scale advantages, and margin discipline justify long-term confidence.

Pitch Summary:
DAR has faced significant headwinds which have affected the share price for the past 2 years. This downturn is, in our opinion, at or near a bottom. We see several fundamental and regulatory changes supporting our view that top-line and bottom-line results will inflect higher in 2026. Recent announcements from DC and from the company are supportive of our view. The base Food and Feed businesses are providing significant support for the struggling Fuel business – a natural hedge we have long discussed. In addition, the company’s vertically integrated supply chain and low-cost position have proven resilient in the face of such headwinds. We expect results for the remainder of 2025 to be challenged and believe this reality is more than accounted for in today’s share price. As the cycle turns, the operational improvements made the past couple of years together with an upgraded asset base will, in our opinion, provide a substantial boost to operating profitability and discretionary cash flow. While frustrated with the recent performance, we do believe some meaningful relief is on the horizon.

BSD Analysis:
SouthernSun’s bullish stance reflects conviction in Darling’s cyclical trough. With diversified feed and fuel exposure, vertical integration, and regulatory catalysts, margins should expand in 2026. The firm trades at ~7x EBITDA with strong FCF optionality.

Pitch Summary:
BCO, a leading global provider of cash and valuables management, digital retail solutions (DRS), and ATM managed services (AMS), was a top contributor for the quarter. In the second quarter, the company delivered 16% organic growth in AMS and DRS while continuing to stimulate customer demand for outsourcing with financial institutions and convert whitespace opportunities in retail. These higher-margin, recurring revenue businesses now represent over 25% of total company revenue and are expected to continue delivering double-digit organic growth for the foreseeable future. Free cash flow continues to improve with over $100 million generated in the quarter on EBITDA growth, continued capital efficiency, and strong working capital performance. Management has been disciplined and opportunistic with capital deployment – buying back $130mm in stock year to date with $85mm of that coming in 2Q. We believe the current price affords share owners a nice opportunity to compound double-digit returns over our investment time horizon with a strong balance sheet providing a backdrop for cash flow growth and a predictable and effective capital allocation strategy.

BSD Analysis:
SouthernSun values Brink’s for its transformation into a recurring-revenue security platform. With AMS and DRS mix expansion and a 10x EV/EBITDA multiple, growth visibility is high. Buybacks, deleveraging, and recurring cash generation support consistent compounding.

Pitch Summary:
MOD is a leading thermal management company and since initiating the position earlier this year, the demand outlook for AI datacenters has increased dramatically, driving increased demand for Modine’s cooling equipment. To meet this strong demand, the company will invest $100 million in the next 12–18 months to increase capacity by roughly 80%. The balance sheet is in good shape with ND/Adj. EBITDA ~1x, and management plans to pause acquisitions for the next few quarters as it integrates three recent acquisitions, explores the sale of its light-duty vehicle heat exchanger business, and executes on its data center investments. We remain impressed by CEO Neil Brinker and the strong leadership team he has assembled, and we believe they are well positioned to continue creating meaningful shareholder value.

BSD Analysis:
SouthernSun’s thesis emphasizes Modine’s leverage to AI-driven data center cooling demand. With EV/EBITDA under 10x, disciplined reinvestment, and strong FCF, the firm benefits from secular tailwinds in electrification and computing infrastructure. Margin expansion, asset rationalization, and leadership execution support sustained upside.

Pitch Summary:
In terms of partial sales, I trimmed Wayfair(W), Ferguson (FERG), and Dream Finders Homes (DFH) due to their exposure to new home construction. I still believe there is value in the new home building sector, but trimmed some positions where I think exposure to new home construction is not being fully appreciated. Ferguson is a great business but does have significant exposure to new home construction, and a premium valuation. The combination of these factors led us to reallocate capital elsewhere. Similarly, I have owned Wayfair less than one year and the stock (not to be confused with the business) was up 140% at the time of the sales. I did not buy the stock expecting such a rapid rise in price, so recognizing the stock has gotten ahead of where I might value the business, I trimmed our position in the mid-$70's per share. Finally, Dream Finders Homes is one of two homebuilding stocks we own (the other being Hovnanian (HOV). Between DFH and HOV, I believe HOV is cheaper and has more upside as it deleverages its balance sheet at a challenging time for homebuilders. Overall, I felt our exposure to homebuilding should be lower, so I sold a bit of DFH, but still believe valuations and end market conditions are neutral for now.

BSD Analysis:
The manager is tactically reducing cyclical exposure amid uncertain housing demand elasticity to rates—sensible given elevated volatility in orders and margins. DFH’s land-light model supports ROE, but relative value versus HOV plus decelerating momentum warrants a trim. Watch incentives, ASPs, and backlog turns; deleveraging paths drive relative upside. Stance: cautious. :contentReference[oaicite:8]{index=8}

Pitch Summary:
Novo Nordisk (NVO) is one of two major players in the GLP-1 space, along with Eli Lilly. Novo Nordisk had some execution missteps in the major North American market and allowed Eli Lilly to take a lead in a space Novo knows very well due to its massive insulin franchise. While the near-term is foggy, GLP-1's are still not used by anywhere near the number of adults who could potentially benefit from them, and even though pricing could be a headwind for the market overall and potentially Novo's major product Wegovy specifically, I believe the current mid-teens P/E valuation does not adequately reflect the long-term growth potential of the business.

BSD Analysis:
Penetration runway in obesity and cardiometabolic indications underpins multi-year double-digit growth; capacity expansions and label additions are catalysts. Pricing pressure is a risk, but scale, manufacturing know-how, and payer access should defend margins. If the stock trades at a mid-teens P/E on depressed near-term supply dynamics, multiple expansion is plausible as supply catches demand. We agree with the constructive stance. :contentReference[oaicite:7]{index=7}

Pitch Summary:
Despite my better judgment, I purchased shares in Endava (DAVA) again based on a number of factors: 1) Endava operating margins are at trough levels, 5-10 percentage points below peers, despite being at parity in the past; 2) all-time low valuation <10x P/E without adjusting for the trough margins; 3) peak pessimism from the market about disruption from AI at the same time AI developments on the ground have actually slowed down, and 4) customer-specific delays at a major customer that have hampered growth relative to peers. There is a lot of pessimism baked into the price of this business and I believe there is a self-help story here that either management or a bidder will ultimately seek to realize.

BSD Analysis:
The thesis is a classic mean-reversion setup—cyclical demand softness and client-specific headwinds drive trough margins and a depressed multiple. If utilization normalizes and SG&A efficiencies restore margins toward peer levels, EPS power rises materially, enabling re-rating. M&A optionality adds a second path to value realization. Risks: lingering AI disintermediation fears and elongated enterprise budgets. We agree with the bullish stance given asymmetry from low expectations. :contentReference[oaicite:6]{index=6}

Pitch Summary:
I want to touch on Post Holdings (POST) first because it's been a long-time holding and my ownership pre-dates the founding of Argosy Investors. Bill Stiritz became well-known to investors through his profile in the Outsiders, a book written by William Thorndike. Mr. Stiritz ran Ralston Purina for decades and Ralcorp Holdings spun off Post Holdings in 2012. Mr. Stiritz became executive chairman of Post Holdings with Rob Vitale as CEO. They embarked on a publicly-traded LBO model similar to what Stiritz successfully did at Ralston Purina. While there have been many successes at Post, over time the long-term results have been dissatisfying relative to the results one could have earned owning a broad stock market index. While not a very large position, given the time the stock has been owned, its worth some reflection on what didn't work as well as hoped. There are 3 factors that I think made POST perform worse than expected: 1) interest rates have increased, creating a headwind for leveraged capital structures, both public and private; 2) consumer staples brands have faced long-term headwinds as brand allegiance has fragmented in the age of social media, while the cereal brands POST owned faced accelerating secular declines from consumer tastes shifting away from carb-heavy diets; and 3) POST's capital allocation track record has only been average, as certain deals such as Weetabix and Bob Evans have not meaningfully improved the business and its not clear the valuations paid were attractive in hindsight. To be sure, they made many correct moves over time, consolidating manufacturing footprints and moving away from carb-heavy diets in several of their capital allocation decisions. They have bought many smaller stranded assets and plugged them in to their operations in an accretive way, including their pet foods and Peter Pan peanut butter brand acquisitions. They also successfully built and spun of Bellring Brands, whose primary asset is Premier Protein. They have also repurchased 16% of the company over the last 7 years. All in, their long-term returns have been below-average, and I no longer feel it was an the best home for investment.

BSD Analysis:
The manager’s sell thesis hinges on structurally lower growth, rising financing costs on leverage, and mixed M&A outcomes—credible reasons to rotate. Without a clear margin-accretive growth engine beyond BellRing, valuation support relies on FCF deployment and buybacks; higher rates blunt that lever. Category headwinds in cereal and private-label pressure further cap multiple expansion. Our bias matches the manager’s: risk/reward skews negative absent a convincing catalyst. :contentReference[oaicite:5]{index=5}