Investment Pitches

Pitch Summary:
Comcast is the largest multinational telecommunications and media conglomerate in the US, with brands including Xfinity cable, NBCUniversal (theme parks and TV stations with Peacock streaming service) and UK-based pay-TV company Sky. The company reported better-than-expected results for its most recent quarter, but shares traded lower due to ongoing declines in broadband subscribers. Our investment thesis remains intact, as we believe Comcast has the scale, density and cost advantages to outperform both fixed wireless and other fiber internet providers over the long term. Meanwhile, the other parts of the business have been performing well, and Comcast continues to generate strong cash flows and return capital to shareholders through both dividends and share buybacks.

BSD Analysis:
Despite broadband churn, CMCSA’s network economics and converged offerings underpin durable cash generation. Parks and content drive diversification; disciplined capex and buybacks support EPS growth. Valuation at ~9–10x EBITDA is attractive versus peers if broadband trends stabilize and ARPU lifts.

Pitch Summary:
Tobacco company Philip Morris reported better-than-expected earnings for its most recent quarter, but slightly soft sales weighed on the stock. The company attributed the sales weakness to supply issues in Indonesia and Turkey due to regulatory changes. However, its noncombustible products continue to lead growth. We remain constructive on this cash flow-generative business and are pleased with Philip Morris’s commitment to returning cash to shareholders through reliable dividends and stock repurchases.

BSD Analysis:
IQOS and other RRPs drive mix upgrade and resilient cash flows, offsetting combustible volume pressures. Temporary supply/regulatory issues should ease; dividend growth and buybacks enhance TSR. Shares trade at a discount to staples with superior FCF yield and pricing power.

Pitch Summary:
Shares of Elevance Health, the health insurer and healthcare-services provider formerly known as Anthem, traded lower on concerns about reductions in Medicaid coverage and increased utilization of services. The company reported a decline in earnings for its most recent quarter and reduced its forward guidance. We believe that margins will eventually stabilize as higher premiums cycle through its customer base. We continue to view Elevance as a well-managed company positioned to benefit from long-term secular demand for its managed care services in the US.

BSD Analysis:
Near-term MLR pressure appears cyclical; pricing resets and acuity adjustment should restore margins in 2026. ELV’s diversified book, disciplined underwriting, and services adjacencies (Carelon) support EPS compounding. Trading below peers on P/E with strong FCF and buybacks, the setup is favorable for multiple normalization.

Pitch Summary:
Japan’s Shimano, which manufacturers bicycle parts, fishing components and rowing equipment, lowered its forward guidance during the quarter because of weakness in overseas markets and ongoing inventory adjustments. Our investment thesis remains intact, as we are confident that Shimano can work through accumulated inventories after the strong but unsustainable demand for its products during the Covid-19 era. In addition to high-quality products and dominant global market share, the company has a strong history of returning capital to investors.

BSD Analysis:
Inventory normalization should trough over the next few quarters, setting up volume recovery into 2026. With net cash, dominant share, and premium brand, Shimano can sustain high teens ROE through cycles. Valuation has compressed; dividend and potential buybacks offer downside support while outdoor demand stabilizes.

Pitch Summary:
C.H. Robinson is the largest freight broker in North America, linking transportation providers to businesses across industries. The company has implemented automated AI processes to cut costs and expand margins. Improved pricing may be in prospect as stricter licensing requirements promulgated by the US Department of Transportation in September take hold and capacity tightens.

BSD Analysis:
Automation and pricing discipline should lift CHRW’s gross profit per load as the cycle tightens. Cost takeout and network density support EBIT recovery; balance sheet is solid to fund buybacks/dividends. Shares trade near mid-teens forward P/E—undemanding if volumes normalize and contractual pricing resets higher.

Pitch Summary:
Shares of tech giant Alibaba were strong during the quarter. With large infrastructure/data centers and leading open-source models, the company’s cloud business has accelerated to capitalize on the AI boom in China. Its partnership with Nvidia, announced in September, further underscores Alibaba’s commitment to its AI and cloud operations. At the same time, the company’s core e-commerce business continues to grow, with improved operating efficiencies that enable it to return cash to shareholders through dividends and stock repurchases.

BSD Analysis:
BABA’s AI-driven cloud reacceleration, coupled with improved e-commerce efficiencies, sets the stage for margin recovery. The balance sheet remains strong, and resumed dividends/buybacks signal confidence. Trading at a discount to global platform peers on EV/EBITDA and P/E, a rerate is plausible as governance improves and cloud monetization scales.

Pitch Summary:
Shares of Alphabet, the parent company of Google and YouTube, were strong during the quarter as the Department of Justice delivered favorable rulings on embedding Chrome as the default browser on phones and retaining the company’s current corporate structure with no need to divest divisions. Beyond its core ad and search businesses, Alphabet provides a full stack solution within AI: spanning research, infrastructure/data centers and integrated end products. Valuation remains reasonable, in our view, and the company continues to share its ample store of cash with investors through dividends and buybacks.

BSD Analysis:
Favorable legal outcomes remove breakup risk while AI stack integration (model, infra, apps) supports multi-year monetization. Cloud profitability is improving, ads remain resilient, and net cash plus ongoing buybacks underpin EPS growth. At ~22x forward P/E with 25%+ EBIT margins, risk/reward is attractive versus mega-cap peers. Key catalysts: Gemini product velocity, Cloud backlog growth, capex ROI.

Pitch Summary:
Oracle is one of the world’s largest independent enterprise software companies. The company reported a large increase in backlogs during the quarter, including a substantial, five-year cloud-computing contract with OpenAI. In addition to a significant near-term lift to Oracle’s top line from this contract, we expect margins on these revenues to expand over time.

BSD Analysis:
The OpenAI contract boosts backlog visibility and underscores Oracle’s growing relevance in AI workloads atop OCI. With mix shifting toward cloud IaaS/SaaS and high attach on database, operating leverage should expand margins. Valuation (~20x forward EPS) remains reasonable given double-digit cloud growth, sizable buybacks, and accelerating RPO. Watch for capex productivity and Gen2 DC ramp as near-term catalysts.

Pitch Summary:
Waters is a leading manufacturer of analytical instruments, along with associated consumables and software, used to separate and identify chemical compounds, for customers in the biotech/pharma, materials, and food science end markets. Shares fell nearly 20% since Waters announced it was acquiring Becton-Dickinson’s (BD’s) Biosciences and Diagnostics business in mid-July. As owners of Becton-Dickinson, we believe the assets acquired by Waters are underappreciated in their own right and are a good strategic fit with Waters’ existing business.

BSD Analysis:
Waters’ acquisition of BD’s diagnostics unit broadens its recurring revenue base and enhances product synergies. Its defensible position in high-margin analytical instruments, low government exposure, and strong balance sheet support long-term EPS compounding. Near-term integration risk is outweighed by strategic upside.

Pitch Summary:
Ryan is a broker of specialty insurance, which is a fast-growing segment of the property & casualty insurance market. The company was founded in 2010 by Pat Ryan at age 72, two years after he retired as Aon’s founder, Chairman, and CEO. We think the management team is an A-rated group, and they are currently guiding the company through a high-growth phase with 2024 being the company’s biggest year yet for acquisitions. The stock sold off over 20% when the company incrementally cut its 2025 organic revenue guidance (from +11-13% to +9-11%) based on a down-cycle in the property insurance market. As is frequently the case, we’re willing to look through the transitory softness to establish a position in an excellent company.

BSD Analysis:
Ryan Specialty’s disciplined underwriting and double-digit organic growth profile make it a structural compounder in specialty insurance. Its scale, diversified product suite, and pricing power in hard markets support margin stability. Near-term cyclical softness provides an attractive entry for long-term compounding.

Pitch Summary:
Our investment in Cooper Companies builds our exposure to the vision care industry alongside our investment in Alcon. Like Alcon, Cooper is a leading manufacturer of contact lenses, an industry characterized by an oligopolistic structure with strong barriers to entry. The company has achieved consistent market share gains over the last 15+ years aided by its unique ability to offer both private label and branded contacts to large retailers. Recent share price weakness driven by transitory issues in the contact lens business created an attractive opportunity to initiate a position.

BSD Analysis:
Cooper’s entrenched market share, improving cash flow post-investment cycle, and defensive health care exposure present a strong total-return setup. Trading at a discount to historical averages with leverage declining, margin expansion and steady demand recovery should catalyze rerating.

Pitch Summary:
Spun off from Novartis in 2019, Alcon has a rich, 75-year history as a global leader in ocular health. The company commands supermajority market shares in optical surgical equipment and implantable premium intraocular lenses (IOLs) and is one of four companies that dominates the contact lens and over-the-counter vision care market. Alcon’s end markets are characterized by strong secular tailwinds, including an aging and wealthier population, increasing rates of myopia (nearsightedness) globally, and advances in technology and comfort that increase adoption of premium IOLs and daily/weekly contact lenses.

BSD Analysis:
Alcon’s leadership in ophthalmic surgery and contact lenses offers stable, secular growth exposure. With underappreciated innovation pipelines, double-digit R&D intensity, and aging demographics tailwinds, valuation appears compelling post-earnings dip. Expect steady EPS growth as elective procedure volumes normalize and premium lens adoption accelerates.

Pitch Summary:
Oracle shares appreciated sharply following the company’s fiscal first quarter earnings report. The company’s contracted backlog, which primarily reflects its cloud infrastructure business, grew substantially from $138B at the end of last quarter to $455B in the most recent quarter. As discussed in the Portfolio Activity section, much of this increase was related to one customer, which led to our decision to exit the position.

BSD Analysis:
This exit underscores Kovitz’s disciplined approach to risk management. While Oracle’s RPO surge signaled immense AI-driven demand, concentration risk—primarily from OpenAI—posed earnings volatility concerns. With ORCL trading at peak multiples and limited diversification in backlog, the risk/reward skewed negative. The manager’s trim appears prudent given the inflated expectations versus cash realization timeline.

Pitch Summary:
UnitedHealth rebounded after earlier losses, adding 0.9% to the fund. Investors were encouraged by the new CEO’s optimistic comments and Berkshire Hathaway’s initiation of a position. The fund added to its holdings during the quarter.

BSD Analysis:
UnitedHealth’s rebound reflects renewed investor confidence following leadership change and strategic execution. With strong Optum growth, stable medical ratios, and recurring cash flow, the firm trades below intrinsic value despite near-term cost noise.

Pitch Summary:
The main event for the fund this quarter was the favorable antitrust ruling for Alphabet’s Google. The judge decided to mandate limited sharing of search data but did not implement harsher penalties, leaving Google’s core search business intact. The jump in Alphabet’s shares added 3.1% to the fund this quarter.

BSD Analysis:
Alphabet’s minimal regulatory impact from the antitrust case underscores resilience of its search franchise. The outcome maintains its economic moat and cash-generating power. With 20%+ FCF margins, AI integration, and multiple tailwinds in cloud and ads, GOOGL remains a core growth holding.

Pitch Summary:
CBL has been working to upgrade its portfolio of malls, selling some weaker class C properties and buying out its partners in high quality locations. The trust has also announced refinancing agreements on multiple properties, reducing interest costs and pushing out maturities. These actions, combined with continued debt reduction, leave the company on stronger financial footing and with substantial cash flow for distributions and investment. But at the end of the day, it’s simply tough for a tiny REIT with less than $500 million in free-floating shares to get much attention, particularly when it owns malls.

BSD Analysis:
CBL is what happens when a mall REIT gets beaten to the brink of death, restructures, survives, and comes back with a chip on its shoulder. This is not a premium mall operator — it’s a gritty, cash-flow-focused portfolio of middle-tier malls, open-air centers, and value-focused retail assets that actually benefit when consumers trade down. The company wiped out a mountain of debt through bankruptcy, and the post-reorg entity has a cleaner balance sheet and far healthier margins than the pre-2020 version. Leasing spreads are stabilizing, tenants are paying rent, and redevelopment projects are adding relevance to assets most investors assumed were unsalvageable. CBL is far from risk-free, but the stock trades as if mall traffic is in freefall — and it’s not. If management continues executing at this pace, the equity upside is far larger than the current distressed REIT multiple implies.

Pitch Summary:
The Losers, or as I prefer to call them, “Pre-Winners” Of course, not everything in the Alluvial portfolio has performed well this year. The fund has an 11% allocation to real estate investment trusts in out-of-favor sectors. Peakstone Realty is having a good year, up 20% as the trust’s transition from mixed office and industrial properties to purely industrial properties gains momentum. But while sentiment around offices has improved, shares of Net Lease Office Properties have not responded. The pace of property sales has been slower than I expected, but there is reason to believe we will see some significant property sales soon. The trust is now marketing its single largest asset, a one million plus square feet office building in central Houston. At $29 per share and excluding all properties encumbered by mortgages, Net Lease trades at a cap rate of nearly 18% and $87 per square foot of real estate. The trust also has multiple vacant properties it is working to sell that represent additional sources of value.

BSD Analysis:
Net Lease Office Properties is basically the REIT market’s problem child — a portfolio of office assets at a time when “office” might as well be a four-letter word. But here’s the twist: NLOP isn’t your typical trophy-tower wannabe. It’s mostly long-duration, single-tenant, mission-critical office real estate with leases structured to throw off stable cash flow even when the broader office market is melting down. The spin from W.P. Carey created a misunderstood, high-yield vehicle that screens ugly but has clearer cash visibility than most multi-tenant office REITs. Yes, lease roll-down risk is real, and refinancing in this rate environment is no picnic. But the market isn’t giving NLOP any credit for durability — it’s priced like a liquidation even though its tenants aren’t going anywhere. If management stabilizes occupancy and refinances sensibly, NLOP could be one of the more violently mispriced office names out there.

Pitch Summary:
McBride plc, our British soap and detergent producer, remains a core holding. Shares dipped in July following the mid-year trading update, only to rebound in September when the company reported exactly the same information they had provided in July. Perplexing, to say the least. McBride remains cheap by any measure, changing hands at less than 5x operating income and 6x earnings. The company’s balance sheet has been restored to health and dividends resumed. I can’t help but think a big factor in McBride’s persistently low valuation is its status as a UK-domiciled, London-listed company. The British economic outlook remains gloomy, and the London Stock Exchange is grappling with declining relevance and investor interest. McBride does have several large holders in its share register. Presumably, these shareholders are invested with an eye toward achieving good returns, not for the psychic rewards that accrue to owners of dishwasher pods and laundry powder manufacturers. If McBride shares continue to languish, I expect that one or more of these holders will push for the company to sell itself.

BSD Analysis:
McBride is a deeply undervalued European private-label powerhouse that is quietly compounding value despite being overlooked due to its UK listing discount. The stock trades at a perplexing 5x forward P/E and low single-digit earnings multiple, a massive anomaly when comparable consumer staples peers trade at 10x or higher. Management has successfully restored the balance sheet to health, beating its net debt/EBITDA target (1.2x), which enabled the crucial reinstatement of the annual dividend. The core business is benefiting from a structural consumer switch toward high-quality, high-value private-label products amid persistent cost-of-living challenges, ensuring margin durability. With Return on Capital Employed (ROCE) jumping to over 30% and consistent cash generation, the market's skepticism is creating a prime opportunity. Analysts believe that as confidence in the sustainability of its profits grows, the stock is poised for a significant multiple re-rating.

Pitch Summary:
FitLife Brands also had a busy August, announcing and then closing a deal to acquire Irwin Naturals. Irwin is a major vitamins and supplements producer that decided to expand into ketamine therapy clinics. The results were disastrous, and FitLife was able to acquire Irwin Naturals’ assets (not including the shuttered clinics) out of bankruptcy. The $42.5 million purchase price was funded with balance sheet cash and bank debt. At $18, FitLife shares are trading at around 11x my estimate of 2026 free cash flow. Here is the part where I confess to not being a particular fan of FitLife’s industry. The vitamins and supplements space is competitive and the evidence for the effectiveness of most products is dubious. But this negativity is more than overcome by my glowing view of FitLife’s leadership. CEO and largest shareholder Dayton Judd has proved himself immensely capable in both operations and acquisitions strategy. Mr. Judd has a particular talent for identifying valuable brands and product lines owned by companies in financial distress or bankruptcy, acquiring those assets, and plugging them into FitLife’s existing distribution. The Irwin Naturals acquisition is impressive and the market has responded accordingly, but I am confident that FitLife is just getting started. I suspect that FitLife shares will have a home in Alluvial Fund for many years to come.

BSD Analysis:
FitLife Brands is a high-conviction roll-up play in the volatile nutritional supplements industry, leveraging the proven execution talent of CEO Dayton Judd to compound capital. The core of the thesis is the disciplined acquisition of high-value, bankrupt assets like the $42.5 million purchase of Irwin Naturals (excluding its disastrous ketamine clinics). This acquisition, funded with cash and bank debt, immediately doubles the company's size and brings in strong distribution and brands, which Judd can plug into the existing platform for margin expansion. Pro forma valuation near 11x 2026 FCF looks undemanding for a consolidator with this level of high-ROI tuck-in capability. The management's owner-operator mindset and ability to acquire brands cheaply from financial distress mitigates the inherent category risk and supports a multi-year cash conversion and growth profile.

Pitch Summary:
Our largest position continues to be Zegona Communications and my, what a year the company has had! In August, Zegona announced a binding agreement to sell a portion of its fiber optic network joint venture to Singapore’s sovereign wealth fund. When completed this quarter, the transaction will result in a large cash inflow for Zegona, enabling it to distribute a meaningful special dividend and effectively redeem the preferred shares it issued to Vodafone in the Vodafone Spain buyout. Zegona continues to work toward monetizing another fiber optic joint venture, which should result in another large cash inflow. Together, these transactions substantially derisk the Zegona story. When we first invested, we were buying into a leveraged buyout situation where value creation was dependent on deleveraging through asset sales. Though I considered it unlikely, the process could have been derailed by skeptical regulators, jittery capital markets, or any number of macroeconomic troubles. Management has come through for shareholders in a big way with these asset sales. These transactions crystallize the value embedded in Zegona’s fiber optic network, normalizing the balance sheet and allowing Zegona to focus on operational improvements. “Multiple arbitrage” is a well-known corporate strategy where a company trading at, say, 10x earnings attempts to buy companies for 5-8x earnings, hoping the market will continue to capitalize the resulting combined earnings at 10x. Happily, it also works in reverse. The market values Zegona at about 6x cash flow, but the company keeps on finding assets it can sell for 12x or more. Zegona is rumored to be considering a sale of its mobile network infrastructure in conjunction with competitor MasOrange, and may also be considering a sale of data centers it acquired with Vodafone Spain. Either transaction would result in material additional cash proceeds that could be used for deleveraging, investment in growth and efficiencies, or returned to shareholders. Despite their excellent performance year-to-date, I continue to see upside of 50% or more in Zegona shares. The company’s efforts to return to subscriber growth and improve margins should bear fruit in 2026, and further asset sales and return of capital announcements are potential catalysts.

BSD Analysis:
Zegona is an event-driven value play executing a relentless "Buy-Fix-Sell" strategy, ruthlessly converting overlooked telecom assets into immediate shareholder value. The core thesis is a classic multiple arbitrage, successfully selling fiber assets at ~12x cash flow while the holding company inexplicably trades near 6x cash flow, creating immediate, tangible NAV uplift. The recent binding agreement to sell a fiber-optic joint venture, and the expected sale of the mobile infrastructure and data centers, substantially de-risk the balance sheet and are funding a promised special dividend. The company is injecting a veteran management team, including the former CEO of Jazztel, to orchestrate an operational turnaround of the Vodafone Spain business, stabilizing revenues and driving cost efficiencies. With a strong focus on deleveraging and a clear path for future asset monetizations, the 50%+ upside case is credible as the market recognizes the true value of its Spanish telecom platform.