Investment Pitches

Pitch Summary:
Glencore was a contributor during the quarter. The U.K.-listed and Swiss-headquartered diversified metals and mining company’s stock price rose as copper prices reached near-record highs in September. This momentum allowed Glencore to overcome relatively lackluster first-half of 2025 results. We met with the management team, which has expressed confidence that industry conditions, specifically in the copper market, will grow more favorable, and that Glencore is well-positioned to execute going forward. We continue to believe this is a well-run business with leading positions in attractive commodities markets.

BSD Analysis:
Glencore remains one of the most compelling diversified resource plays, with unmatched leverage to energy transition metals—copper, cobalt, nickel—while retaining cash-flow stability from its high-quality thermal and trading arms. The marketing segment continues to deliver outsized returns, providing earnings resilience and smoothing commodity volatility in ways peers can’t replicate. Its industrial portfolio has near-term noise, but longer-term supply deficits in copper and battery metals provide a structural tailwind for NAV expansion. Capital allocation remains disciplined, with strong buybacks and a pragmatic approach to growth investment. Despite possessing one of the strongest asset bases in the sector, Glencore trades at a discount to long-term earnings power due to ESG skepticism and commodity-cycle fatigue. As supply tightens and trading profitability normalizes at higher levels, GLEN offers meaningful upside with a robust income profile.

Pitch Summary:
Alibaba Group was a contributor during the quarter. The China-headquartered technology conglomerate’s stock price rose significantly following earnings that reflected rapid Chinese AI growth. Its Cloud segment posted healthy revenue growth, and management indicated that this momentum is expected to continue in the coming quarters. Additionally, Alibaba has solid traction in both its International and Instant Commerce businesses. We continue to believe the company is well-positioned for long-term growth, having been one of the early investors in Chinese AI. Over time, we believe it can leverage its advanced capabilities and leading market position to unlock further value.

BSD Analysis:
Alibaba’s operational reset continues to gain traction, with clearer execution across core commerce and accelerating traction in Cloud as enterprise AI workloads scale. Taobao/Tmall stabilization reflects a healthier competitive environment and sharper product focus, while cost discipline is driving steady margin repair across multiple segments. Cloud’s pivot toward AI infrastructure, proprietary silicon, and verticalized solutions is expanding wallet share and improving revenue visibility. Despite these improvements, the stock still trades as if regulatory pressure and structural headwinds are frozen in time—an increasingly outdated narrative. With a fortress balance sheet, buybacks accelerating, and multiple engines re-accelerating, Alibaba offers one of the strongest value-to-quality setups in large-cap tech. Sentiment remains overly depressed relative to the underlying compounding potential.

Pitch Summary:
Trex’s R&R skew provides relative defensiveness versus new-build cyclicality, while category share gains in composite decking support above-market growth. As mix shifts to premium boards and accessories, margins should expand with scale. Balance sheet flexibility enables ongoing capacity and channel investments. A recovery in housing turnover is the key catalyst; watch resin costs and promotional intensity.

BSD Analysis:
Trex is the category-defining monopoly in high-margin wood-alternative composite decking, positioning it as a structural winner in the secular shift away from traditional lumber. The company's model is inherently resilient, driven by the less-cyclical Repair & Remodel (R&R) market, which provides a defensive buffer against new-build volatility. Its entrenched brand leadership and commitment to sustainable materials (recycled wood/plastic) support durable pricing power and a sustained upward mix shift to premium boards and accessories. Trading at a high-end valuation of roughly 25x earnings, the multiple reflects its high margins and dominant position but could face near-term pressure from macro housing indicators. The core catalyst for a multi-year expansion is the eventual stabilization of housing turnover and the easing of mortgage rates, which should reignite remodeling activity and volume growth.

Pitch Summary:
Medpace’s bookings resilience and exposure to small-biotech R&D support sustained double-digit top-line growth, with operating leverage driving expanding margins. The CRO model’s cash conversion is typically strong, supporting buybacks and selective capacity additions. Valuation remains reasonable versus faster-growing peers, and improving biotech funding sentiment adds upside optionality. Watch capacity utilization and pricing as leading indicators for 2026 pipeline visibility.

BSD Analysis:
Medpace is an elite, founder-led Contract Research Organization (CRO) that has consistently compounded value for over three decades, targeting the high-growth small-to-mid-sized biotech segment. The company's unique, single-campus model in Cincinnati is a formidable competitive advantage, enabling seamless culture, efficient training, and superior operating leverage through a lower cost of living. Medpace consistently delivers high-teens to 20% organic growth and EBITDA margins exceeding 21%, translating into industry-leading cash flow conversion. With management holding a substantial 20% ownership stake, capital allocation is highly disciplined, prioritizing accretive share repurchases to amplify per-share growth. Trading at roughly 22x forward EPS, the premium valuation is justified by its execution, strong bookings resilience, and rising confidence in biotech funding normalization.

Pitch Summary:
Part of the reticence towards synergies is that the word is somewhat a euphemism for transformation/change, which in turn often means job cuts (not just employees but Board Directors also!). This reticence was definitely the case with Pointsbet (ASX:PBH), which was a long, but very rewarding arbitrage trade in 2025 (along with New World Resources it has been the standout merger arbitrage trade of 2025 to date). We are generally more than happy to see takeover timelines extended where they have become contested situations. In the vast majority of cases the time decay effect on annualised returns is more than compensated by higher prices. Pointsbet received its first takeover offer in February 2025 and another horse immediately joined the race, with the potential appeal of synergies helping to drive the final price higher. The Pointsbet takeover event, where you have one all cash offer and a competing cash and scrip offer, which then transformed into an all scrip and selective buy back proposal, is not rare but it’s not overly common either.

BSD Analysis:
The PointsBet takeover saga serves as a classic case study in how competitive bidding and perceived synergy value can materially reshape merger-arbitrage outcomes. Investor hesitation around “synergies” is common—often a euphemism for restructuring, job cuts, or governance changes—and PointsBet’s drawn-out process reflected exactly that: stakeholders scrutinizing whether the bidders’ synergy claims were credible or merely financial engineering. Once the first all-cash offer emerged, the presence of an immediate competing bidder fundamentally shifted the payoff profile, with each party attempting to justify higher valuations through different deal structures, including cash-and-scrip combinations and a later selective buyback mechanism. This type of bidding war is not frequent—particularly where structures change mid-process—but when it unfolds, arbitrageurs typically benefit from extended timelines. The time decay of IRR is often more than offset by incremental bid revisions, and PointsBet followed that pattern as the contest pushed the final implied consideration meaningfully higher than the initial bid. The transaction also highlighted how regulatory constraints in online gaming, balance-sheet restrictions, and cross-border listing issues can complicate deal structuring, leading bidders to rely more heavily on post-merger efficiency gains to justify price escalation. In the end, PointsBet became one of the standout arbitrage opportunities of 2025, demonstrating how contested takeovers in specialized regulated industries can produce unusually attractive, low-correlated returns for event-driven investors.

Pitch Summary:
Broadcom’s pivot to AI accelerators and custom silicon is translating into multi-year revenue visibility, underpinned by >$100B backlog and marquee $10B NRE order. Networking leadership (including merchant silicon) complements accelerators, supporting margin durability. Integration discipline and FCF yield add downside support; key watch items are customer concentration and cadence of 2026 custom-chip ramps.

BSD Analysis:
Broadcom has carved out one of the most enviable positions in semis, sitting directly at the intersection of AI compute, custom silicon, and high-margin infrastructure software. Its $100B+ AI semiconductor backlog and marquee $10B custom-chip engagements make the growth runway unusually visible in an industry known for volatility. Networking leadership and disciplined integration keep margins elevated even as the company scales aggressively into accelerators. While the stock screens expensive on headline multiples, free-cash-flow generation north of $20B a year and consistent capital returns more than justify the premium. Customer concentration remains the bear case, but long-term design wins and sticky custom-silicon relationships sharply reduce churn risk. As hyperscalers race to differentiate their AI stacks, Broadcom is positioned as a must-have strategic partner with decades of growth embedded in existing contracts.

Pitch Summary:
NVIDIA remains the linchpin of AI compute with a defensible moat spanning silicon, software (CUDA), and networking. Data-center revenue momentum and expanding customer breadth support elevated growth and cash generation. As-sold backlog and ecosystem lock-in reduce near-term downside, though capex normalization is a medium-term risk; continued platform innovation (Blackwell/GB200) is the catalyst.

BSD Analysis:
NVIDIA doesn’t just dominate AI — it is the AI cycle. The company has turned silicon into a religious experience for hyperscalers, with demand so overwhelming that even multi-billion-dollar capex budgets can’t keep up. Its CUDA software moat is practically impenetrable, locking customers into an ecosystem competitors can’t replicate without burning a decade and billions in R&D. The Grace Hopper platform and next-gen Blackwell architecture ensure NVIDIA stays a generation ahead in performance-per-dollar, which is the only metric that matters when training trillion-parameter models. Gross margins remain obscene, free cash flow is detonating upward, and every major cloud provider is building data centers around NVIDIA’s product roadmap, not the other way around. Valuation looks rich, but when a company controls the entire AI compute stack — chips, networking, software, and developer mindshare — normal valuation rules stop applying. NVIDIA isn’t just a semiconductor company anymore; it’s the toll operator for the entire AI economy.

Pitch Summary:
Astera sits in a sweet spot of the AI stack, alleviating data-center connectivity bottlenecks as hyperscaler deployments accelerate. Surging Scorpio adoption signals strong product-market fit and supports rapid operating leverage. With AI infrastructure still early, revenue visibility is rising; execution and competitive moat in PCIe/CXL connectivity are the swing factors.

BSD Analysis:
Astera Labs is one of the purest — and most underappreciated — plays on the exploding AI interconnect economy. Every hyperscaler is hitting bandwidth ceilings, and Astera’s CXL memory controllers and high-speed connectivity chips are becoming mandatory if you want to push GPU clusters past today’s constraints. The company is riding a tidal wave of AI infrastructure spend, yet the stock still trades like a small-cap semiconductor story rather than a mission-critical enabler of the next-gen data center. Margins have room to expand as volumes scale, and the company’s partnership network with the biggest cloud players gives it credibility startups usually need years to earn. Astera isn’t trying to beat NVIDIA — it’s selling the picks and shovels that make NVIDIA clusters usable at scale, which is often the better business model. With hyperscalers scrambling for memory bandwidth and coherent interconnect solutions, Astera’s runway is far longer than the market is pricing. This is an AI plumbing play with real torque.

Pitch Summary:
I fully exited the Cirata position during the quarter. The investment thesis required clear, repeatable growth in what it now calls “Data Integration,” which ultimately failed to materialize. While I credit management for executing well on controllable items, divesting non-core assets ($2.5m), refocusing the company, and cutting quarterly cash burn from $3.2m to $0.8m, the revenue engine never accelerated. Reported contract wins remain too small to validate the thesis. Consistent with my evolving approach to be less forgiving when business execution fails to meet expectations, I sold the position and realized the tax loss in applicable accounts.

BSD Analysis:
Cirata’s turnaround effort ultimately ran into the hard wall of insufficient demand, exposing a business model that never scaled at the pace required to validate the Data Integration thesis. Management executed well on controllable levers—cutting burn, divesting non-core assets, and refocusing operations—but contract wins remained too small and too sporadic to shift investor confidence. The company’s inability to generate repeatable, high-velocity bookings signaled weak product-market fit in a segment that rewards scale and switching costs. With revenue traction stalled and visibility limited, the equity story became increasingly dependent on hope rather than fundamentals. While operational cleanup created a leaner base, it wasn’t enough to overcome structural headwinds. Given the persistent growth gap and lack of catalysts, stepping aside preserves capital until the company can demonstrate consistent demand or a strategic reset.

Pitch Summary:
Fairfax’s fundamental performance remains impressive, despite the modest share price pullback in Q3, a natural consolidation following its significant multi-year run. The Q2 results, reported in July, underscored this strength, driving book value per share up 10.8% year-to-date to $1,158, supported by a disciplined 93.3% combined ratio and strong investment results. The company has established a significantly higher and more durable earnings baseline than before 2021. As I’ve noted previously, earnings quality has also markedly improved, with the majority of income now generated by predictable sources like interest, dividends from associates, and underwriting. This structure makes Fairfax significantly more resilient to the P/C insurance cycle than traditional peers As the hard market inevitably softens, it is helpful to remember Fairfax's strong track record of capital allocation. They focus on buying more of what they already own at good prices. Since 2021, they have deployed $6.5 billion into buybacks ($3.2B) and acquiring minority stakes in core subsidiaries ($3.3B). The buybacks alone cut the share count by 17% well below book value. This approach directly boosts per-share value by increasing earnings while reducing the share count. This discipline is also evident in their counter-cyclical management. They acquired aggressively during the 2014-2019 soft market when assets were cheap and pivoted to organic growth during the recent hard market when margins were high.

BSD Analysis:
Fairfax is what happens when an old-school insurance conglomerate is run by someone who actually understands capital allocation instead of just collecting premiums and praying. Prem Watsa has built a balance sheet that can take a punch, and the company’s mix of underwriting discipline and investment opportunism gives it a playbook most insurers simply aren’t equipped to copy. The underwriting side has tightened up dramatically in recent years, with combined ratios consistently proving that Fairfax can write business profitably without relying on investment income as a crutch. Meanwhile, the investment portfolio — long criticized for being too conservative — has quietly repositioned into higher-yielding, opportunistic credit and equity exposures that thrive in a higher-rate world. Book value compounding is accelerating, yet Fairfax still trades at a valuation that suggests it’s stuck in its 2010s identity crisis. If rates stay elevated and underwriting remains tight, Fairfax has the rare potential to deliver insurance-like downside protection with private-equity-like upside torque.

Pitch Summary:
The investment thesis for Cogent still hinges on substantial revenue growth from wavelength services. The company is targeting approximately 500 installations per month, with an average monthly revenue per wave of $2,000, implying a potential revenue run rate of roughly $144 million (500 installations x 12 months x $24k/year) at a very high contribution margin of over 90%. While we are seeing positive signs, wavelength revenue grew 27% sequentially (and 147% year-over-year) to a $36 million run-rate, the headline pace of reported installations, at 147, was still far below the targeted 500/month run-rate needed to validate the thesis. But a closer look at the numbers reveals that Cogent also installed and billed for approximately 330 additional wave connections, which were not yet reflected in the reported revenue. The sum of these two figures, approximately 477, gets very close to the target. CEO David Schaeffer attributes the recent miss not to a lack of demand, highlighting a strong funnel and zero pre-install cancellations, but to a lag in customer acceptance. He argues that customers, conditioned by competitors’ multi-month delays, are “caught off guard” by Cogent’s ability to deliver within 30 days (vs. months for competitors). This creates a temporary gap between installation and revenue recognition as Cogent builds credibility in this new market and convinces customers to change long-held procurement habits. The market has clearly not reacted well to this short-term execution risk. This was combined with the average performance of the rest of the business (strong performance of the IPv4 business, but weaker headline numbers for other divisions due to the final stages of “grooming” low-margin connections from the Sprint acquisition). The next quarter will be important as Cogent must now show actual evidence of execution

BSD Analysis:
The investment thesis for Cogent Communications Holdings (CCOI) hinges entirely on the successful scaling of its wavelength services, which possess a target 90% contribution margin. While near-term revenue recognition lags mask the operational progress, the company's installation data suggests momentum is building to validate the thesis. Management highlights a strong funnel and zero pre-install cancellations, arguing that customer acceptance delays are the temporary friction point. This conversion rate from installed connections to recognized revenue is the critical execution catalyst to watch for in the coming quarters. If conversion accelerates, the company's EBITDA should inflect sharply, aiming for the target annual run-rate of approximately $144 million in wavelength revenue. However, investors must monitor risks from the ongoing integration and "grooming" of low-margin connections from the Sprint acquisition that could drag on near-term results. Success in this high-margin vertical would amplify Cogent's intrinsic value and drive a significant re-rating of the equity.

Pitch Summary:
TVK is a key manufacturer of steel storage tanks, transport trailers, and related processing equipment. They serve a wide array of durable, essential end-markets, including agriculture, energy distribution, and construction. The stock’s decline following its August earnings report was not entirely surprising; given the strong run it has had over the last year, any perceived “miss” was bound to cause a pullback as short-term holders locked in gains. The third-quarter results did miss expectations. While headline revenues grew due to recent acquisitions, “same-store sales” of the base portfolio businesses actually declined by 2%. Management pointed to several factors for this softness, including reduced demand for certain storage tanks and energy equipment, as well as uncertainty created by recent tariffs. Net income and free cash flow, however, declined 8% and 38% respectively, driven mainly by a significant increase in finance costs. Terravest has had a very active M&A year, including the acquisition of LBT, Simplex, Tankcon, and its largest to date, Entrans. The increased debt taken on to fund this spree has led to financing costs rising 195% in the quarter. Terravest should reduce its relative funding costs as it integrates these new businesses and ramps sales through cross-selling and organic growth. The Entrans acquisition, its largest to date, meaningfully expands TVK’s US footprint and opens up new, high-growth areas, such as defense contracts and a newly developed liquid hydrogen trailer product line. TerraVest’s core business serves durable end markets, providing a relatively stable platform for its high-ROI M&A strategy. Given its relatively small size, TVK can find ample opportunities to reinvest capital and continue compounding for a long time to come.

BSD Analysis:
TerraVest looks like a classic small-cap industrial that just hit a speed bump, but underneath the noise it’s still one of the most quietly effective compounders in Canadian manufacturing. The market fixated on a revenue “miss” driven by softer tank and energy-equipment demand, completely ignoring that TerraVest has been stitching together a high-ROI M&A machine that most mid-caps can’t replicate. Yes, financing costs spiked — that’s what happens when you buy four companies in a year — but the payoff comes as integration ramps, cross-selling kicks in, and the U.S. footprint expands through the Entrans acquisition. Entrans alone opens the door to defense contracts and the emerging liquid-hydrogen trailer market, both of which could be multi-year growth engines the market isn’t modeling. The balance sheet isn’t pristine in the short term, but TerraVest has historically delevered quickly once acquired assets start contributing, and management has proven it knows how to turn niche manufacturing into cash. At current multiples, the stock is priced like a tired roll-up despite having a long runway of small-cap targets and mission-critical end markets. If TerraVest executes even half as well as it has over the last decade, the recent sell-off will look like a gift.

Pitch Summary:
Melrose Industries continues its evolution into a pure-play aerospace leader. My thesis has been that the market is overly skeptical of the company’s ability to generate cash, focusing on temporary drags from its restructuring while overlooking the powerful, long-term earnings profile of its underlying assets. The company’s recent first-half results offered the first real evidence that this cash flow inflection is now underway. For the first half of 2025, Melrose reported a 29% increase in operating profit and, most importantly, a £91 million year-over-year improvement in free cash flow, beating consensus expectations. This performance was driven by strong execution; management completed its multi-year defense contract, repricing it 6 months ahead of schedule, a key step toward improving margins in its Structures division. With the broader restructuring program set to conclude by year-end, a major cash drag is being eliminated, paving the way for structurally higher cash generation from 2026 onwards. The crown jewel remains the Engines division, with its unmatched portfolio of 19 Risk and Revenue Sharing Partnerships (RRSPs) that entitle it to ~70% of global flying hours. While the market has been fixated on the cash burn from two GTF engine programs, these are on track to turn cash-positive by 2028, at which point the entire portfolio becomes a powerful, multi-decade annuity stream. The recent results reinforce my conviction in the future cash generation.

BSD Analysis:
Melrose Industries (MRO) is an aerospace pure-play that is swiftly moving across a critical cash flow inflection point, transitioning from a deep restructuring phase to a high-quality compounder. The market is overly skeptical, focusing on temporary restructuring costs and GTF engine remediation rather than the underlying long-term earnings durability. The crown jewel is the Engines division, which is entitled to an annuity stream from its 19 Risk and Revenue Sharing Partnerships (RRSPs), covering approximately 70% of global flight hours. With 17 of 19 RRSPs already generating cash and the remaining two expected to turn cash positive by 2028, Melrose is entering a multi-decade period of harvesting high-margin aftermarket revenue. Management's guidance projects substantial financial step-ups, aiming for £600 million+ of annual free cash flow by 2029 and adjusted diluted EPS CAGR of over 20%. Early execution, including ahead-of-schedule contract repricing, validates the company's ability to drive margin expansion and close the valuation gap with aerospace peers.

Pitch Summary:
The Brookfield machine continues to compound intrinsic value, delivering robust Q2 results across its diversified platform. Distributable earnings (DE) before realizations grew 13% year-over-year, driven by nearly $100 billion in capital inflows over the last twelve months, demonstrating the strength of its ecosystem spanning real assets, insurance, and credit. At its recent Investor Day, management once again laid out an ambitious plan targeting a 25% annualized growth in DE per share through 2030. This plan anticipates generating $53 billion in free cash flow, leaving $25 billion in excess cash available for opportunistic buybacks and M&A. Management is aggressively scaling the Wealth Solutions platform and investing insurance float, now calling itself an “investment-led insurance organization.” This makes sense as Brookfield's long-dated, stable life insurance liabilities align well with its expertise in investing in long-duration, essential real assets like infrastructure and renewables. This matching of duration and risk profile enhances capital efficiency and supports the scaling of BAM’s funds without materially altering the overall risk profile. Management is also leaning heavily into the multi-trillion-dollar capital requirements for AI infrastructure. In an environment where “AI” attracts significant hype and speculative investment, Brookfield’s approach is distinctly de-risked. They are building essential infrastructure such as data centers and the renewable power required to run them, underpinned by long-term commitments from the financially strong hyperscalers, such as a 3,000 MW hydroelectric framework with Google and a 10.5 GW renewable agreement with Microsoft.

BSD Analysis:
Brookfield continues to operate as one of the most sophisticated compounding machines in global alternatives, with fee-bearing capital, insurance float, and opportunistic M&A all reinforcing a self-funding growth engine. The firm’s distributable earnings algorithm—driven by nearly $100B in annual fundraising and disciplined deployment—gives it visibility few asset managers can match. Its AI-infrastructure push is notably de-risked versus hype-driven peers, anchored by long-duration contracts with investment-grade hyperscalers who need power, data centers, and renewables—not speculative equity bets. Management’s 2030 plan, targeting 25% DE-per-share growth, is backed by $53B in expected free cash flow and $25B of excess capital earmarked for buybacks and acquisitions, giving the company multiple levers to drive per-share value. The insurance platform is scaling quickly and efficiently, matching long-dated liabilities with Brookfield’s core expertise in real assets. Despite this setup, the stock still trades at a discount to its intrinsic growth rate, weighed down by macro noise. With capital rotation into hard assets and AI-linked infrastructure accelerating, Brookfield looks primed for a multi-year rerating as investors recognize the durability of its model.

Pitch Summary:
Alphabet’s shares rose this quarter, partly driven by the resolution of a major regulatory overhang. On September 2nd, Judge Mehta issued the remedies decision in the DOJ antitrust case concerning Search. The outcome was far less severe than feared, as the court rejected the most draconian measures, including the structural divestiture of Chrome or Android and a broad ban on distribution payments. While Google is now restricted from paying for exclusive default placement (e.g., with Apple), it can still compensate partners for non-exclusive default status. The enacted remedies, which include tailored data sharing and syndication on commercial terms, appear manageable. With one major legal overhang out of the way (another case on the Ad tech monopoly remains outstanding), focus can now return to Alphabet’s fundamentals, particularly its strong positioning in Artificial Intelligence. Google’s advantage lies in its vertically integrated stack, spanning proprietary infrastructure (TPUs), leading models (Gemini), and scaled global distribution platforms (Search, Android). This full-stack approach allows for optimization and efficiency that competitors cannot easily match; for example, Google claims it has twice the power efficiency of competitors and a 33x efficiency in inference, demonstrating its progress in managing the cost of AI deployment. AI is enhancing Search utility through features like AI Overviews and Lens, driving increased user engagement. Additionally, Google Cloud is rapidly gaining traction, now exceeding a $50 billion annual run rate (growing 32% YoY) with a $106 billion backlog, as enterprises choose Google for its differentiated AI capabilities. This leadership is evident in Google's support for 9 of the top 10 AI labs and its processing roughly 4x the token volume of other providers. The company continues to deliver strong financial performance, with 14% revenue growth and strong operating margins in the last quarter, allowing it to fund an aggressive $85 billion capex plan for AI infrastructure

BSD Analysis:
Alphabet Inc. (GOOGL) remains a long-duration AI compounder underpinned by a resilient, diversified business model. The company's unique, vertically integrated AI stack—spanning custom Tensor Processing Units (TPUs), the Gemini model, and ubiquitous distribution via Search/Android/Chrome—creates a deep, durable competitive advantage. This full-stack approach allows Alphabet to achieve superior cost and power efficiency in serving AI workloads, enabling faster iteration of its models and margin stability even with rising capital expenditure. The core Search and Advertising segment, a high-margin powerhouse, is directly benefiting from AI integration through features like AI Overviews and Gemini, which enhance query volume and monetization. Meanwhile, Google Cloud's growth is accelerating, driven by massive demand for AI infrastructure, evidenced by a $155 billion backlog of multi-year contracts. Trading at roughly 22x forward earnings with consistent double-digit revenue growth and robust free cash flow generation, Alphabet remains a compelling investment despite its recent rally, offering an attractive risk/reward profile.

Pitch Summary:
WPP PLC (WPP LN) is one of the world's largest ad agency holding companies. WPP shares came under pressure on worse than expected results that resulted in a dividend cut. While the Company has struggled recently, WPP introduced a new CEO during the quarter who brings a wealth of experience in digital transformation and artificial intelligence, capabilities which will be key to the Company’s turnaround plans.

BSD Analysis:
WPP is in the middle of a long-overdue reset as it pivots from legacy agency sprawl toward AI-enabled, data-driven marketing solutions. The new CEO brings a much-needed mandate for digital transformation, and early restructuring steps suggest a willingness to confront structural inefficiencies that prior leadership sidestepped. Near-term earnings remain pressured by muted ad spending and heavy investment, but the market’s reaction appears to over-discount execution risk while ignoring WPP’s global scale, client stickiness, and consolidated media buying power. AI automation is already reshaping workflows, offering a path to margin stabilization and, over time, expansion—something the market has yet to price in. Trading at roughly 8× forward EV/EBITDA with a reset dividend, expectations are washed out, creating room for a cleaner narrative as transformation gains traction. If management delivers even modest proof points on efficiency and integrated tech adoption, WPP has meaningful rerating potential as the industry’s mix shifts toward AI-first creative and performance marketing.

Pitch Summary:
In an environment of persistently high prices for basic essentials, value is front and center in the minds of consumers. Warehouse clubs like BJ’s have a track record of market share gains, particularly from grocery stores, due to a structural per unit pricing advantage of typically 25%. Such a price gap is possible due to characteristics of the warehouse club model, which involve concentrated supplier buying power, high inventory turns, efficient in-store labor, and membership-funded margins. The model facilitates a powerful flywheel effect: Membership fees and efficient in-store operations fund consistently low prices, which drive higher volumes and create buyer leverage, further enhancing member value and fueling continued membership growth. BJ’s appears to be at an inflection point with membership momentum, an accelerated new store rollout, and a proven management team. The BJ’s membership base today, as measured by tenured renewal rate and higher tier membership penetration, is in a strong position. In addition, the company has refined its new store formula and plans to open 25 to 30 new clubs over the next two years, representing the fastest rate of openings in the company’s history. BJ’s has carefully crafted its new store playbook, and the current approach is working as new stores generate comparable club sales at two to three times the rate of the legacy footprint. Finally, BJ’s CEO Bob Eddy and the management team have demonstrated skill and discipline as capital allocators, consistently balancing reinvestment in member value and store growth with debt reduction and share repurchases. Overall, membership momentum combined with high performing new store openings and proven management should drive a compelling financial picture of strong comparable club sales, impressive free cash flow generation, and cost leverage.

BSD Analysis:
BJ’s continues to execute a classic warehouse-club playbook built on structural price advantage, high-turn inventory, and a membership model that quietly compounds in the background. The company is hitting an inflection point in member momentum, with higher-tier penetration and renewal rates signaling a stickier, more valuable customer base. Its refined new-store formula is working, with recent openings delivering outsized comps—proof the model still travels well. While investors worry about a stretched consumer, BJ’s value proposition widens in exactly this kind of environment, driving share gains from traditional grocers who simply can’t match its unit economics. Management has consistently balanced reinvestment with disciplined capital allocation, reinforcing a long-term earnings and FCF runway. With accelerating store growth and deepening membership economics, BJ’s looks positioned to compound steadily while the market continues to underappreciate the durability of its model.

Pitch Summary:
ITT is a diversified industrial company with three segments, led by Motion Technologies, which contains ITT’s market-leading brake pad business with margins and returns well above competitors. Motion Technologies has very high share in electric vehicles and Chinese automakers, translating to above-market growth as both categories win greater share in the global automotive market. The Industrial Process segment includes ITT’s pumps and valves businesses, where ITT has also gained market share in both customized pump solutions as well as attractive aftermarket revenues. Industrial Process’s growth will be further driven by a new innovative motor with patented embedded variable drive functionality that significantly increases power efficiency (an increasingly important focus area for many customers including energy and chemical companies). The Connect and Control Technologies segment includes ITT’s electrical connectors and cable assemblies, primarily for the aerospace and defense end markets. Connect and Control Technologies has renegotiated decade-long supply agreements to aerospace customers at significantly higher prices starting in 2026 and has exposure to growing new aircraft builds and global defense spending. CEO Luca Savi and CFO Emmanuel Caprais have proven to be excellent operators and capital allocators, with further mergers and acquisitions building on a successful track record to supplement the CEO’s “healthy paranoia for continuous improvement”. Over the next five years, ITT expects to deliver double-digit annual organic earnings growth with further upside from successful capital allocation.

BSD Analysis:
ITT is one of those industrial names that looks “boring” right up until you realize it’s quietly levered to three of the strongest secular themes in the entire sector: EV adoption, aerospace expansion, and industrial efficiency upgrades. Motion Technologies is a cash-printing machine with dominant share in premium brake pads — especially in EVs and Chinese OEMs — giving ITT pricing power that most auto suppliers would kill for. The Industrial Process segment is stepping into a multi-year tailwind as customers wake up to the cost savings from its high-efficiency pumps and valves, while the new embedded-drive motor platform could be a legitimate margin lever. Then there’s Connect & Control, which is about to see a multi-year boost from renegotiated aerospace contracts at much higher prices — something the market hasn’t fully priced in. Management’s “healthy paranoia” is not just a cute quote; it shows up in high-ROI capital allocation and enviable ROIC levels. Trading around ~18x forward earnings with double-digit EPS growth ahead, ITT looks more like a stealth compounder than a cyclical industrial.

Pitch Summary:
Bruker declined -18.4% during the quarter through the date of our exit. Bruker is a leading provider of high-performance scientific instruments, analytical and diagnostic solutions, and related services. BBH Mid Cap has long admired Bruker’s innovative track record that has allowed the company to consistently grow its revenue alongside operational excellence that has facilitated strong margin expansion and earnings growth. Bruker is diversified across a wide variety of end markets including academic, government, biopharma, industrial, and semiconductor. However, this diversification has provided no safe harbor from academic and government life science funding cuts and prolonged tariff uncertainty. These include restrictions on federal research funding to colleges and universities; efforts to cut the National Institutes of Health (NIH) and National Science Foundation (NSF) budgets and limit the pace of grant disbursements; tariffs on China, the EU, and Switzerland; and policy to re-shape the biopharma industry via sector-specific pharmaceutical tariffs and most-favored-nation drug pricing. While the impact was initially contained to direct funding cuts among academic customers in the US (approximately 10% of revenues), more recently we have seen a sharp slowdown in activity across Europe and China, and in industrial and biopharma end markets. Given continued policy uncertainty, both at the country and healthcare sector level, we have chosen to step aside at this time while we await a stabilization of the policy landscape and to redeploy proceeds to readily available opportunities.

BSD Analysis:
Bruker Corporation (BRKR) is a scientific instrument provider temporarily exposed to cyclical macro policy and funding headwinds in its end markets. The recent stock sell-off of -18.4% largely reflects external pressures, including delays in academic and government life science funding and prolonged tariff uncertainty on China and the EU. Despite these challenges, which are impacting revenue visibility, the core investment proposition remains structurally intact. Bruker maintains robust fundamentals, including EBITDA margins above 20% and modest leverage, which demonstrate operational excellence and resilience. The company's diverse exposure across biopharma, academia, and industrial markets positions it for a recovery as R&D spending normalizes globally. Trading at roughly 17x forward earnings, the stock offers asymmetric upside and a strong rationale for a re-rating once policy clarity and demand trends improve.

Pitch Summary:
Globant declined -37.5% during the quarter through the date of our exit. Globant is the second-largest pure-play digital software engineering vendor with a focus on front-end, custom-designed software engineering applications that are mission critical to its customers. Globant has been a strong outperformer in recent years, with double-digit revenue growth throughout 2023 and 2024. Revenue growth was well ahead of peers during this period, supported by industry-leading AI studios that help large enterprises implement and leverage AI capabilities. However, Globant has been significantly impacted by tariffs, especially among its Latin American customers, who have reduced or paused IT spending against a weak macroeconomic backdrop in the region. North American customers have also experienced a deceleration. While Globant’s AI studios continue to grow at a double-digit rate, this has not been enough to offset slowing growth elsewhere, and market sentiment has also soured out of concern that AI could compress revenues due to efficiency gains and the prevalence of new AI coding tools. Despite our frustration with the repeated cuts to guidance this year, we believe the preponderance of evidence is that Globant’s business model is not permanently impaired. While its growth has slowed to low single digits for 2025, Globant’s margins and cash flows have held up and the balance sheet remains strong with a net leverage ratio of 0.5x. However, given the decline in the share price and lack of near-term catalysts, we believe it was opportune to exit our position to harvest the tax loss for the Fund.

BSD Analysis:
Globant didn’t suddenly become a bad business — it just got caught in the macro crossfire while running one of the most forward-leaning AI consulting engines in the industry. The market punished the stock as if tariffs and LatAm budget freezes somehow erased its core value proposition, even though Globant’s AI studios are still posting double-digit growth and winning enterprise deals the rest of the industry can’t touch. Yes, guidance cuts hurt, but the balance sheet is pristine, margins held up, and the company’s ability to scale high-margin digital engineering work hasn’t gone anywhere. At ~18x forward earnings, Globant is priced like a generic IT outsourcer despite having a premium brand, deep enterprise relationships, and a track record of outgrowing peers by miles. The current slowdown looks cyclical, not structural — a narrative the market will eventually have to correct. Once macro headwinds ease and enterprise tech budgets normalize, Globant has the operating leverage and pricing power to snap back far faster than consensus is modeling.