Investment Pitches

Pitch Summary:
Updating my model for PAR Technology after Friday's financial statements. Rereading the transcript from the conference call. When I read the financial statements and listened to the conference call on Friday, it was quite disappointing. But after a closer look, the drop looks like a huge overreaction. Decided to buy up a lot of the stock. PAR is a stock that constantly gives us opportunities. We bought before and during Covid around 10-20 USD. Sold the majority in 2021 around 60-90 USD. Bought up a lot again in 2022 around 20-35 USD. Sold a lot in 2024 at 60-80 USD and have now bought up a lot again in 2025 - most recently in the 45-50 level after the financial statements. PAR has grown its ARR consequence over the entire period, delivered attractive acquisitions and has become profitable. Yet the stock market has given us 3 opportunities to buy the stock cheaply. Volatility in the market is truly an advantage for the long-term investor.

BSD Analysis:
PAR Technology is a high-growth, specialized restaurant technology provider whose stock is a conviction bet on the successful, multi-year shift of the restaurant industry to a cloud-native SaaS model. The core thesis is driven by its dominance in point-of-sale (POS) systems and its crucial ability to provide enterprise-level solutions for large, multi-location restaurant chains. The company is converting its legacy hardware base into a sticky, high-margin recurring revenue stream, with its Subscription Services segment driving strong growth. This is an indispensable provider, leveraging its deep domain expertise to integrate software, hardware, and services for maximum efficiency in a non-cyclical consumer sector.

Pitch Summary:
Credit Acceptance, a 50+ year old subprime auto lender, has compounded shareholder value dramatically (170x since IPO). The stock has stagnated for 6 years as weak 2021–23 loan cohorts underperformed, depressing revenue yields and EPS despite a 50% larger loan book and 50% fewer shares outstanding. Rising interest costs also pressured returns. Now, with problem cohorts seasoning out and new originations performing better, revenue yields are beginning to inflect. Q2’25 EPS was understated due to a $23m legal accrual; normalized earnings already suggest consensus underestimates. With $65+ EPS projected by 2026, shares trade at ~7x P/E, well below historical 10–15x. Buybacks are aggressive (4.5% of shares in a quarter), and regulatory overhang eased with CFPB lawsuit withdrawal. The setup points to outsized EPS growth, front-loaded in 2025–26, and potential rerating or further value creation through capital return.

BSD Analysis:
This is a classic contrarian compounder mispriced on short-term noise. EPS has been weighed down by poorly underwritten cohorts during a volatile macro/auto cycle, but the worst is behind them. As underperforming vintages roll off and new originations improve, yields will normalize. With high dealer engagement, disciplined underwriting, and proprietary CAPS integration into DMS platforms, growth should resume. Even with limited growth, buybacks at trough multiples compound per-share value rapidly. Regulatory relief (CFPB case dropped) reduces tail risk. The key is trusting CACC’s decades-long track record of underwriting discipline despite recent missteps. At ~7x normalized earnings and with strong capital allocation, the stock offers 25–30% IRR potential over 5 years. Risks: another collections miss, intense competition, or prolonged weak demand—but downside is mitigated by buybacks and strong EVA philosophy.

Pitch Summary:
West Fraser Timber is the largest lumber producer in North America (~9% share) and the world’s largest OSB producer (~29% share NA, ~10% EU). ~45% of sales come from lumber, ~55% from OSB/engineered wood, with a small pulp & paper segment. Both lumber and OSB are currently in cyclical downturns due to high mortgage rates, weak housing starts, and depressed repair & remodel activity. Additional pressure comes from U.S. tariffs on Canadian lumber. Despite this, WFG has a net cash balance sheet, investment-grade rating, and trough-level valuation. Historically, it has traded near 6x mid-cycle EBITDA or 1.25x P/B; applying those multiples suggests fair value around $110/share vs. ~$72 today. Capacity closures are accelerating, setting up a mean-reversion in pricing and margins. WFG is well positioned to outlast weaker peers and capture upside when housing activity normalizes.

BSD Analysis:
This is a classic cyclical mean-reversion bet. Lumber and OSB markets are at a trough, with producers announcing mill closures. WFG, with scale, diversified geography, and net cash, is the safest and most liquid proxy for the eventual recovery. Tariffs and demand uncertainty could delay the upturn, but history shows capacity reductions cure low prices. Valuation at ~0.8x P/B and <4x normalized EBITDA provides margin of safety. For investors comfortable with cyclicals, WFG offers asymmetric upside into the next housing/construction rebound.

Pitch Summary:
The recent rally in Tesla's stock price, driven by news of robotaxi developments in Texas, is unsustainable. The stock's technical indicators suggest a potential sell-off, and the news appears to be strategically timed to counteract negative sentiment from a significant legal ruling against Tesla.

BSD Analysis:
Tesla's stock has been buoyed by strategic news releases, such as the announcement of a ride-hailing permit in Texas, which has excited retail investors. However, these developments may not be as significant as they appear, given that the permit is similar to those held by companies like Uber and Lyft. Furthermore, the stock's recent technical performance, breaking above key moving averages, may not hold due to underlying legal challenges, including a substantial punitive damages ruling related to Tesla's Autopilot. The potential for further legal issues and regulatory scrutiny could weigh heavily on Tesla's future performance, making the recent stock price increases potentially short-lived.

Pitch Summary:
Beacon Minerals is positioned for significant upside due to its strategic location in Western Australia's Tier 1 mining jurisdiction, which offers political and legal stability, world-class infrastructure, and a skilled workforce. Despite current negative gross margins and high costs, the company is expanding its plant capacity and improving ore grades, which should enhance production efficiency and profitability. The acquisition of the Lady Ida project, with its higher-grade reserves, is expected to be a game-changer, potentially doubling production and significantly boosting cash flow. The company's strategy of holding gold as a liquid asset instead of cash provides leverage to rising gold prices, while its unhedged production allows full exposure to market price increases. Insider ownership is high, and recent insider buying indicates confidence in the company's future prospects.

BSD Analysis:
Beacon Minerals' enterprise value is supported by a strong balance sheet, with liquid assets including cash, gold in transit, and shares in Astral Resources. The company's focus on expanding its processing capacity to 1.2 million tonnes per year aligns with its strategy to increase production through higher-grade ore from the Lady Ida project. The joint venture agreement for Lady Ida allows Beacon to incrementally increase its stake as production milestones are met, eventually leading to full ownership. The company's exploration efforts in Timor Leste, although currently paused, add optionality for future growth. Beacon's management demonstrates a commitment to shareholder value through potential buybacks and a focus on returning capital via dividends when feasible. The company's leverage to the gold price, combined with its strategic initiatives, positions it as an attractive investment in the gold mining sector.

Pitch Summary:
Exposure to online gaming companies such as Entain and Flutter added alpha over the quarter, supported by strong user engagement trends and favourable regulatory dynamics in key markets. Entain was up over +50% in the second quarter after upgrading 2025 guidance for its US business. Investors are starting to ascribe value to this segment as it is starting to generate meaningful profitability. We previously viewed Entain's US arm as a free call option that was not baked into valuation. We still see significant upside in Entain shares - US state governments are under pressure to generate tax revenues given the binge in spending and borrowing. Today online casino gaming (iGaming) has only been legalised in seven US states compared to 38 states with legalised online sports betting. We believe it is only a matter of time for new iGaming state legalisations, which will drive meaningful upside to earnings estimates.

BSD Analysis:
Entain is a global sports betting and gaming giant whose stock is a high-beta bet on the successful monetization of the U.S. sports betting market through its joint venture, BetMGM. The core thesis is driven by Entain's dominance in over 30 regulated or regulating markets (excluding the US), which are forecast to grow mid-single-digits annually. The company maintains an unparalleled portfolio of more than 35 iconic brands tailored to local markets. The company is positioned for growth, having achieved 7% year-over-year Group Revenue growth and 9% growth in Online Net Gaming Revenue. Entain is a conviction play on the long-term, non-cyclical growth of the global regulated gaming market, amplified by the immense upside potential of the U.S. sector.

Pitch Summary:
Logic Instrument is positioned to benefit from increased defense spending in Europe, with significant contracts and a strong presence in the rugged computing market.

BSD Analysis:
Logic Instrument has secured an €11 million contract with German Defense, reflecting its strategic advantage in the European market amid rising defense budgets. The company has demonstrated significant revenue growth, particularly in France and Germany, driven by increased military expenditures. As EU countries prioritize local procurement, Logic Instrument's European production and partnerships enhance its competitive edge. The company's financial performance shows robust growth, with a 41% increase in net profit and a 32% rise in sales in the first half of 2025. Despite risks such as dependence on large orders and strong competition, Logic Instrument's niche market position and innovative capabilities present a compelling investment opportunity.

Pitch Summary:
Beacon Minerals is undervalued due to its current negative gross margins and high costs, but it has significant upside potential. The company is expanding its plant capacity and improving its gold grades, particularly with the acquisition of the Lady Ida project, which is expected to boost production and cash flow significantly. The stock is poised for a rerating if the gold price holds, supported by a strong financial position and strategic management decisions.

BSD Analysis:
Beacon Minerals operates in a top-tier mining jurisdiction with political and legal stability, which reduces operational risks. The company's strategic expansion of its plant capacity to 1.2 million tonnes per year and the development of the Lady Ida project are expected to enhance production efficiency and profitability. The Lady Ida project, with its higher-grade reserves, is a game changer for Beacon, potentially doubling its production. Additionally, Beacon's decision to hold gold as a liquid asset rather than cash positions it well to benefit from rising gold prices. The company's management has demonstrated a commitment to shareholder value through strategic acquisitions and potential share buybacks, further supporting the investment thesis.

Pitch Summary:
Gold has now risen into the $3,400/oz area (as of the time of writing). Although the prices of junior gold miners have risen overall, they still appear to be lagging the implied valuation of their businesses. There is a wide margin of safety between the prices of these stocks, if one thinks of them as a series of quarterly call options struck at the AISC5 for each business, and with the gold selling price as the price of the underlying. Gold December futures now stand at $3,404/oz and, at these levels, the businesses we own are still trading on an earnings multiple of 3-4x; cheap, especially given the expected growth in production. Last summer, when we began to notice the junior gold miners, the price of gold was around $2,500/oz. An example miner had an AISC around $1,900/oz, and set to decrease costs to $1,800/oz. That implied a selling margin of $600/oz, and the company was producing 10,000oz per quarter. This equated to an operating profit of $6 million per quarter, or $24 million per year. At the time it was value at $75 million and looked set to have cash of $20 million by the end of the year. Cheap on the face of it, or conversely, showing a large margin of safety against a fall in the gold price. This same business is now producing 11,000oz per quarter, likely rising to 12,000oz before year-end. At a gold selling price of $3,200/oz, with no AISC improvement, the margin would be $1,300/oz, implying annual operating profit of $62.4 million. It’s now valued at $244 million and has net cash of $25 million, likely increasing well above $30 million by year-end. On an enterprise valuation of $214 million, it still trades at 3.4x; a great business even after the share price has risen has risen 220%. To answer the question the reader may be asking at this point: Serabi Gold plc. But it’s not the only one. There are many other similar stocks in the gold and broader precious metals space, with a common theme of underpricing relative to current gold levels and sustaining costs, alongside growth opportunities from exploration.

BSD Analysis:
Serabi is a small Brazilian gold miner focused on high-grade underground deposits in the Tapajós region — a geology that gives it strong grade profiles but naturally higher operating complexity. Production levels are modest, but when grades cooperate, Serabi can generate solid cash flow relative to its size. The company’s investment case hinges on expanding resource life and improving throughput, both of which could unlock meaningful re-rating if executed well. Brazil risk, permitting timelines, and local infrastructure constraints are always part of the equation. Gold prices add another layer of volatility, magnified by the company’s small scale. But for investors who want asymmetric exposure to gold with operational leverage, Serabi offers torque that larger producers can’t match. This is a classic high-risk, high-reward junior miner story.

Pitch Summary:
In late April we wrote a post about TSS, Inc. when it was trading at $7.53, giving it a market value of $189 million. Revenues had grown 172% from 2023 to 2024, driven by a 264% year-on-year increase in the systems integration segment through Q4 2024. Assuming more moderate growth and similar margins, the stock was trading at 12–13x forward earnings, or in the high single digits under more aggressive assumptions. The name re-rated within weeks, helped by shifting sentiment during the tariff relief rally, and further accelerated on May 15 when Q1 results showed revenues of $99 million, up 523% from the prior-year quarter. The stock re-rated to above $30 by late June, pushing the valuation above $750 million. This was a difficult situation to assess with a rapidly growing company. On the one hand, growth had been exceptional; on the other, such momentum rarely lasts indefinitely, and we believed it was only a matter of time before it slowed. At that point, the earnings-based valuation appeared far less attractive. We therefore sold the position but continued to monitor the name along with several other AI infrastructure stocks, particularly those with multiple business segments that can support sales growth over a long horizon. As of the time of writing, TSS, Inc. has fallen to the $17 area, partly due to results that disappointed the market and partly due to a public offering of common stock priced at $17 per share. Q2 revenues of $44.0 million were lower than Q1, but still represented a 262% year-on-year increase. Revenues remain lumpy at this stage in the company’s life cycle, but the overall growth has been extraordinary. We will continue to look past short-term noise around these kinds of stocks and continually compare the price presented by the market to our assessment of the fundamental value of the business.

BSD Analysis:
TSS is a micro-cap data center infrastructure and services provider operating in the slipstream of the hyperscale and edge build-out cycle. The company focuses on modular power, cooling, and integration services — unglamorous but essential components that must scale as AI workloads explode. Because TSS plays in specialized niches, it can win business where speed, customization, and technical reliability matter more than brand recognition. The balance sheet is tight, and revenue concentration can make quarters swing violently, but the long-term demand backdrop is structurally favorable. If management can capture a larger share of edge deployments and modular data center upgrades, operating leverage becomes meaningful fast. Investors often overlook TSS entirely due to size, but the company sits in a growth pocket few understand. High risk, high torque.

Pitch Summary:
This shift has already proven its worth . During our proxy contest at AstroNova, AI tools helped us produce the extensive ISS deck and other materials that would have been vastly more costly to prepare otherwise (i.e., we would have needed to spend an incremental six figures, and/or developed far lower quality work -product). We earned endorsements from both ISS and Glass Lewi s, and the incumbent board requested the CEO’s resignation . I believe, though it is of course impossible to verify, that we may well have run the first AI -powered proxy contest in history. Although we are still early in implementing this technology, and further advances (such as GPT -5) are arriving in real time, we are mostly through rebuilding all of our core tools we have relied on for a decade to be AI -first – from our research documents to our watchlist. Some of this is still under construction, which is why we ask for your patience for another month or two before we return to full tear -sheets and portfolio commentary .

BSD Analysis:
AstroNova is a specialty printer and data-acquisition company tied to aerospace, industrial labeling, and proprietary printing tech. Its aerospace business benefits from high retrofit and replacement demand, and industrial labeling is a sticky, consumables-heavy category. Margins are improving thanks to mix shift, and the company’s intellectual property in specialty printing keeps competition thin. It’s a slow-burn industrial-tech compounder the market barely watches.

Pitch Summary:
Automating the tedious parts. For companies we know well , such as Franklin Covey or LGI Homes , I had largely abandoned writing formal quarterly updates, relying on quick notes or sometimes skipping updates altogether . That saved time, but it risked missing subtle developments or losing the thread of how my thinking evolved over multiple quarters . AI changes this by handling the repetitive parts of quarterly reporting . I am restructuring our research format so that KPIs and expectations are tracked in a w ay that allows AI to auto -generate the factual quarterly updates . That frees me to spend my time focusing on understanding key shifts and qualitative nuances that AI cannot see , and writing down only these portions of the analysis. (AI now writes ~75% of our research, at least as a first draft; I simply go through and edit, add, or subtract as needed until it matches what I have in my head – but this is still vastly faster than doing it by hand.)

BSD Analysis:
Franklin Covey transformed itself from a training-seminar relic into a high-recurring SaaS-like leadership and organizational performance platform. The All Access Pass subscription is sticky, high-margin, and deeply embedded in corporate HR budgets. Renewal rates are strong, NPS is high, and the company’s shift to digital delivery massively improved operating leverage. This is a niche human-capital software play with a far better economic model than its legacy brand suggests.

Pitch Summary:
B. Fitlife acquisition of Irwin out of bankruptcy – thousands of pages distilled in hours. Last week, Fitlife Brands announced it was acquiring Irwin Naturals out of bankruptcy , doubling the size of its business. AI allowed us to produce a comprehensive update merely ~5 hours after the transformative acquisition. First, it located the bankruptcy filings in minutes , along with various news articles and financial disclosures of Irwin that otherwise would have taken us an hour or two to locate. Second, after we had pulled a few key documents, NotebookLM analyzed these documents at our behest to tell us which of the other 700+ filings likely contained important information. It referenced a few dozen, which we then downloaded to update its data -set (imagine how much time this saved vs. clicking download on 700 documents!). NotebookLM built a chronological narrative from thousands of pages of legal text, letting us focus on the filings that truly mattered. A manual approach would have taken days, yet still missed details buried in obscure exhibits.

BSD Analysis:
FitLife is a high-margin, asset-light supplement business that leaned into direct-to-consumer, brand licensing, and acquisitive growth with more discipline than most nutraceutical peers. Cash flow is strong, margins are improving, and the portfolio strategy lets FitLife scale without building bloated infrastructure. As consumers prioritize performance, weight loss, and functional wellness, FitLife has a niche portfolio positioned for premium pricing. This is a quietly profitable microcap executing a tight playbook.

Pitch Summary:
Even if we pencil in pretty good 2026 numbers – and value the stock based on these – it appears to trade at ~13.5x EV/EBITDA and 20x EV/NOPAT, which is simply too rich for a cyclically exposed, capital-intensive hardware company. Further, a meaningful percentage of Bel’s earnings come from products that are likely to be impacted by tariffs or reshoring over time, particularly its legacy networking business. We worry that investors extrapolating recent strength in earnings into the future may be underestimating both the cyclicality of demand and the durability of competition in Bel’s end-markets. While we still view Bel as a well-run business with improved operational discipline, the risk/reward at today’s valuation no longer meets our standards. As a result, we chose to exit our position and reallocate capital into opportunities with more attractive upside relative to downside.

BSD Analysis:
Bel Fuse is a small-cap power and connectivity supplier that reinvented itself through margin discipline, mix improvement, and smarter product focus. The company now sits in mission-critical niches of networking, industrial automation, and aerospace/defense — categories with long product lifecycles and high switching costs. Bel’s operational turnaround has been impressive, and the balance sheet is now strong enough to fuel more strategic moves. This is an underfollowed tech-industrial hybrid with real structural improvements.

Pitch Summary:
Conversely, we held on to most of our Grocery Outlet (GO) stock after the 40%+ post -earnings pop, only making a modest trim, because as we continued to conduct more due diligence, including a half -dozen calls with former key leaders, we concluded that it is a special and competitively differentiated business that has suffered from a combination of excessive growth expectations (which led to a lack of focus on getting the basics right), as well as a botched ERP implementation (which caused ripple effects thr oughout the business). With new CEO Jason Potter having an excellent history of turning around grocery peer The Fresh Market (TFM) – and a refreshed Board including former Sprouts CFO Chip Molloy – the setup here reminds us a lot of Jack Sinclair’s early days at Sprouts. Given the habitual nature of grocery purchase, it takes time for operating improvements to flow through to comp growth, but there seems to be a multi -year runway for driving numerous blocking -and-tackling self -help improvements, ranging from private label penetration to better merchandising to better technology tools for stores to manage their forecasting / inventory ordering. We sold Sprouts far too soon, and don’t intend to make the same mistake here. Finally, this is a business that benefits from many of the key challenges in the world – it passes along inflation to consumers, and as an extreme -value grocer, it sees not only stable but rapidly growing demand during economic downturns (it comped somethi ng like 27% cumulatively in 2008/2009 during the GFC). Therefore, although the stock is not screamingly cheap at ~17.5x our forward estimate of NOPAT, we believe that its very stable demand profile – and a long runway of improvements – make it worth conti nuing to hold a meaningful position. Again, I want to be careful to thread the needle here; we would likel g aggressively at ~17.5x to fund purchases of vastly inferior businesses, even if those businesses trade at a meaningfully greater discount to our fair value estimate, given what we view as the very high probability that this business will achieve our expectations over the next several years.

BSD Analysis:
Grocery Outlet wins by selling quality branded goods at off-price economics — a model tailor-made for inflation-fatigued consumers. The independent operator structure gives it local flexibility with corporate buying power behind it. As mainstream supermarkets fight margin compression, Grocery Outlet thrives by turning supply-chain chaos into treasure-hunt value. Traffic is sticky, unit economics are strong, and recession risk is upside, not downside. This is a defensive consumer machine with real legs.

Pitch Summary:
LegalZoom ($LZ) is presented as an attractive short following a sharp share price move driven largely by enthusiasm around partnerships involving OpenAI and Perplexity. The author argues the rally has created a favorable entry point, with a price target below $6 implying >45% downside. Despite headline revenue momentum, implied full-year EBITDA has increased only marginally, suggesting deteriorating revenue quality due to higher customer acquisition costs, marketing spend, or pricing concessions. Sequential growth appears weak when adjusting for the Formation Nation acquisition, implying underlying organic growth near zero. Competitive pressures are intensifying, with OpenAI-linked alternatives (via Stripe and Intuit) and multiple startups offering lower-priced solutions. A conservative FCFE-based valuation yields equity value well below the current price, even before adjusting for execution and competitive risks.

BSD Analysis:
The online legal services industry is becoming structurally more competitive as AI lowers barriers to entry and commoditizes basic business formation workflows. LegalZoom’s historical advantage in brand and distribution is eroding as large platforms embed similar services at lower marginal cost and tighter ecosystem integration. The recent partnerships appear more sentiment-enhancing than economically transformative, with limited evidence they improve unit economics or pricing power. Revenue growth driven by acquisitions and promotional intensity risks masking stagnation in the core business. Capitalized software, stock-based compensation, and recurring tuck-in M&A meaningfully reduce true free cash flow, limiting equity value despite net cash. The key risk to the short is renewed multiple expansion driven by AI narrative rather than fundamentals. However, on normalized cash earnings, the stock appears priced for growth that exceeds realistic competitive and industry dynamics. Absent a clear inflection in organic demand or margins, downside skew remains compelling.

Actual Post Content:
I am short $LZ with PT of less than $6/sh for over 45% downside. The move today creates a decent risk/reward. Not only because many shorts covered, but also due to the magnitude of this move which appears somewhat driven by the opanAI and perplexity partnership. Because of the time sensitivity of this opportunity i will summarize at a very high level the main issues. 1. The actual implied EBITDA change for the full year is something like 165m to 169m. Which is lower than the implied revenue increase. This is likely due to higher CACs and increased marketing or price concessions. I.e the quality of revenue growth may be not very strong. 2. The company closed an acquisition in 1Q25 called formation nation. This added perhaps 12m of revs or so. That means 2Q sequential growth was negative and YoY around 1.1% 3. OpenAI also has partnerships with Stripe and Intuit for business formation. And prices appear lower than what $LZ charges. Additionally there are numerous startups, I found one that partners with Gemini. 4. I estimate real FCFE in 2026 is somewhere between 20-30m. Base case if that grows at 4% into perpetuity which would be higher than its organic growth rate and i assume an 8% required return rate, i get a NPV of 5.35 after adding back its net cash. This is all a little fuzzy and do your own due diligence especially on FCFE. I'm not super confident this is correct. It's obviously below the headline and management guidance number, but I consider capitalized software, a small amount for recurring M&A, and stock comp as real expenses. May do a follow up to narrow down valuation or trade out of the position at any moment.

URL: https://x.com/fierce__beast/status/1953868760416239909

Pitch Summary:
Although outside the second quarter timeframe, we added Zoetis to the portfolio on July 1. Zoetis specializes in veterinary pharmaceuticals, and pet owners likely recognize many of their products. The surge in pet ownership during the pandemic has expanded the company’s addressable market, as pets age and require increased medical care, driving higher healthcare costs. Zoetis offers a compelling investment case due to its stable growth trajectory, strong profit margins, and current undervaluation in a market segment that has fallen out of favor, making its shares attractively priced at levels not seen in years. :contentReference[oaicite:2]{index=2}

BSD Analysis:
Zoetis is the world’s premier animal-health company, benefiting from the durability of pet spending and livestock productivity demands. Its portfolio of vaccines, dermatology treatments, and parasiticides has pricing power and strong recurring revenue. Pet ownership and premiumization trends create a structural tailwind. Margins are consistently high due to scale and formulation expertise. Regulatory barriers in animal health are real, keeping competition rational. Zoetis is a defensive growth compounder hiding inside a niche healthcare category. When consumer staples feel stale, Zoetis feels alive.

Pitch Summary:
We redeployed some of our defensive positioning by acquiring UnitedHealth on May 2. UnitedHealth is the largest health insurance company in the United States and recently faced pressure due to disappointing first-quarter results and the resignation of its CEO. Having tracked this company closely for years, I viewed the investment as a high-risk, high-reward opportunity. Although there’s always a chance the stock could decline further, the expectation is that UnitedHealth will resolve its current challenges, creating significant upside. This situation is reminiscent of our previous experience with Boeing, where a turnaround took years but eventually paid off. Considering the risk-reward balance, the decision felt justified, betting on the idea that UnitedHealth is too significant to fail entirely, and even if dismantled, substantial value would remain. :contentReference[oaicite:1]{index=1}

BSD Analysis:
UnitedHealth continues to dominate U.S. healthcare with a dual-engine model: insurance scale plus Optum’s services, care delivery, and analytics platform. Optum is steadily shifting the mix toward higher-margin, less cyclical revenue. United’s data advantage allows it to manage risk better than peers, making underwriting more consistent across cycles. Demographics and chronic-care prevalence support long-term growth in insured lives. Regulatory overhang never disappears, but the business has navigated decades of policy shifts with barely a dent. Cash flow is massive and reliable. UNH remains the cornerstone compounder of the sector.

Pitch Summary:
In the first quarter, trimming our Microsoft position appeared to be the right decision. The news at the time suggested caution, and given the stock’s considerable weighting in our portfolio, reducing the position by half seemed prudent. When the market declined sharply in April, I was relieved to have made that call. But, as fate would have it, the company reported a stunning first quarter, sending its shares soaring. Of course, we still held the stock—just not as much as before—and that weighed on our performance. Microsoft recently posted its second-quarter results, which were also impressive, accompanied by strong forward guidance. At this stage, I find myself genuinely conflicted about Microsoft, given its valuation and uncertainty about its future returns. On the one hand, I recognize the hype surrounding AI and acknowledge that excitement alone could continue to drive the stock higher. However, the company’s substantial spending on data centers to support its AI initiatives is concerning. A critical, unanswered question remains whether Microsoft—and indeed the entire AI sector—will ultimately recoup these considerable investments. AI undoubtedly possesses appealing characteristics, but it also carries significant drawbacks. Moreover, differentiating among the numerous existing models can be a challenging task. Without clear differentiation, I fear AI risks becoming just another commoditized technology over time. At this juncture, I’m closely watching how earnings season unfolds before making any significant decisions, but don’t be surprised if Microsoft is soon removed from our portfolio. :contentReference[oaicite:0]{index=0}

BSD Analysis:
Microsoft is the enterprise AI operating system, embedding AI into Azure, Office, GitHub, and every major ecosystem foothold it owns. Azure growth remains durable as companies modernize infrastructure and build AI-driven apps. Copilot introduces a new monetization layer across Microsoft’s productivity suite, expanding ARPU rather than relying on seat growth. The company’s unmatched distribution — Windows, Office, Teams — gives it deployment speed most competitors can only dream of. Margins and cash flow remain elite despite heavy AI investment. Regulatory pressure is real but manageable. Microsoft is the cleanest, broadest exposure to enterprise software + AI in one ticker.

Pitch Summary:
The Swatch Group is trading for an unprecedented net-net valuation, just over half of tangible book value. As one of the most shorted stocks in Europe, investors are implying the company is worth more dead than alive, but we disagree. The company’s world-class brands—Harry Winston, Omega, Breguet, Blancpain, Longines, among others—have immense potential. At the May 21 ordinary general meeting, 61.9% of bearer shareholders elected Steven to the Board of Directors—a legally binding vote under Swiss law despite Hayek family resistance. We are engaging constructively with the company to resolve governance issues. Cultural change is needed as Swatch has historically rejected input from customers, wholesalers, shareholders and even managers. With shares and revenue at multi-decade lows, it is time for new approaches. Over the past year we have conducted over 100 discussions with former managers, shareholders, luxury experts and watchmakers. The luxury mechanical watch industry is in a renaissance with Gen Z 2–4x more likely to purchase mechanical watches. Swatch has lost substantial share due to outdated marketing and governance. We believe fresh perspectives and more balanced board composition can unlock substantial value as the company modernizes and leverages its iconic brands.

BSD Analysis:
UHR trades below liquidation value despite owning some of the strongest global luxury watch marques. Brand equity and long-cycle demand fundamentals remain intact, especially with demographic tailwinds from younger collectors. Governance reform is the key catalyst; majority bearer-shareholder support indicates urgency for change. Margin recovery and brand revitalization offer multiyear upside optionality, and current valuation provides a deep margin of safety.