Investment Pitches

Pitch Summary:
Another recent addition is Protasco. Listed in Malaysia, Protasco is a micro-cap conglomerate with 10 segments. There are only 3 core profitable segments that are masked by losses from non-core segments. The most important segment is road maintenance underpinned by long-term concessions with the federal government and state authorities. Protasco has more than 20 years of operating history and maintains over 16,000km (~10,000 miles) of roads. The maintenance segment is supported by two other segments - engineering & consultancy services, and trading & manufacturing which supplies pavement materials (asphalt premix, bitumen), construction materials, and highway safety equipment. Core segments accounted for 89% of FY24 revenues but an astonishing 125% of FY24 net profit. This is because of losses from 4 out of the 7 non-core segments. Chairman and co-founder Dato' Sri Ir. Chong Ket Pen (Chong for short) is the key capital allocator and the largest insider with a 30% stake. He clearly had misallocated capital but appears to be righting the ship. In an effort to boost low valuations (2.4x PE, 0.4x book), management led by Chairman Chong has been evaluating options to monetize non-core assets. The first non-core asset sold earlier in 2025 was a private university. More sales of non-core assets are expected. Your manager is particularly interested in ~100 acres of freehold land in De Centrum City, anchored by universities within a 10 km radius and about 20 km south of Kuala Lumpur city center. Recent transactions imply the land is worth MYR 109-174m (vs book value of 91m). At about the mid-point of estimates, the land bank is worth the entire market capitalization of Protasco. Valuing the core segments (with 70m normalized earnings) at an undemanding 7x earnings results in 490m. Adding the low-end estimate of the land bank and assigning a zero to other non-core segments lead to roughly 600m (vs 130m market cap and 200m EV). Protasco also used to pay dividends until 2019. A one-cent dividend would cost about 5m, which seems well-covered by 184m cash and 50m normalized FCF. 190m debt seems similarly well-covered too. If dividends resume, the company would send another signal that it's on the right path to proper capital allocation.

BSD Analysis:
The manager identifies a compelling sum-of-the-parts opportunity in Protasco, a Malaysian micro-cap conglomerate trading at extremely depressed valuations of 2.4x PE and 0.4x book value. The core thesis centers on three profitable segments generating 125% of net profits while being masked by losses from non-core operations, creating a classic conglomerate discount scenario. The road maintenance business provides stable, government-backed cash flows from long-term concessions covering over 16,000km of roads, supported by complementary engineering and materials trading segments. Management under Chairman Chong, who owns 30% of the company, has begun monetizing non-core assets including a recent university sale, with valuable freehold land holdings potentially worth the entire market capitalization. The manager's sum-of-the-parts analysis suggests fair value around MYR 600 million versus the current MYR 130 million market cap, representing substantial upside potential. The investment case is further strengthened by strong balance sheet metrics with MYR 184 million cash covering debt obligations and potential dividend resumption signaling improved capital allocation discipline.

Pitch Summary:
A recent addition is Able Engineering Holdings ("Able"). Able is engaged in building construction and RMAA (repair, maintenance, addition, and alteration) projects for Hong Kong public works. Able trades below cash and 6x earnings despite double-digit growth in revenue and net income for the past 2 years. Fundamentals seem strong with double-digit ROE, stable FCF, and consistent and growing dividends since 2022. Topping off the story is a roughly 9% dividend yield. The catch may be an office building that is carried on the books at roughly the same value as Able's market value. The building was developed at the cyclical peak and has already been impaired once because of near-record high vacancy rates (17%) in the Hong Kong office market. Kowloon East, where the building is, reports even worse vacancy at 24%. Fears of additional impairments appear to depress the stock. The stock appears to offer substantial upside even considering worst-case impairments. A FCF multiple of 8x seems conservative for Able that has a six-decade operating history, government-issued licenses for large public housing projects, and strong growth of near-3x EBIT and 2x net income in past 3 years supported by strong government spending. Applying that to normalized FCF of HKD 350m results in a target of 2.7b market value (vs 1.4b today). The impaired office building is held at 1.34b on the balance sheet after an initial 13% impairment. Another 25-35% impairment, if materialized, will match severe GFC-style downturns. The severe stress test would shave 380-540m off the target market value, leaving 2.2-2.3b left and implying plenty of upside and substantial margin of safety. It's unlikely for Hong Kong offices to remain in a permanent trough given the region's dynamism and role as a key financial center for China. Geoffrey West, in his seminal work "Scale", wrote about how cities do not die like companies and biological organisms do. Cities are social and informational networks powered by human interaction and innovation. Because cities continuously import resources, reinvent themselves, and adapt, they are far more resilient than living beings and most companies. Further upside may be warranted when leasing and sentiment improves in the office market. China's ambitious plans to integrate Hong Kong with the Guangdong–Hong Kong–Macao Greater Bay Area (GBA) will result in greater demand of public housing, directly supporting Able's business.

BSD Analysis:
The manager presents a compelling value play in Able Engineering Holdings, a Hong Kong construction company trading at attractive metrics despite strong fundamentals. The company trades at 6x earnings with double-digit ROE, stable free cash flow, and a 9% dividend yield, while showing impressive growth with 3x EBIT and 2x net income expansion over three years. The key risk centers on an office building asset carried at book value equal to the entire market cap, which has already been impaired once due to Hong Kong's challenging office market conditions. However, the manager's stress testing suggests substantial upside even under severe impairment scenarios, with a target valuation of HKD 2.7 billion versus the current HKD 1.4 billion market cap. The investment thesis is strengthened by Able's six-decade operating history, government licenses for public housing projects, and potential beneficiary status from China's Greater Bay Area integration plans. The manager views the office market concerns as temporary, citing Hong Kong's resilience as a financial center and the cyclical nature of real estate markets.

Pitch Summary:
Another recent addition is Protasco. Listed in Malaysia, Protasco is a micro-cap conglomerate with 10 segments. There are only 3 core profitable segments that are masked by losses from non-core segments. The most important segment is road maintenance underpinned by long-term concessions with the federal government and state authorities. Protasco has more than 20 years of operating history and maintains over 16,000km (~10,000 miles) of roads. The maintenance segment is supported by two other segments - engineering & consultancy services, and trading & manufacturing which supplies pavement materials (asphalt premix, bitumen), construction materials, and highway safety equipment. Core segments accounted for 89% of FY24 revenues but an astonishing 125% of FY24 net profit. This is because of losses from 4 out of the 7 non-core segments. Chairman and co-founder Dato' Sri Ir. Chong Ket Pen (Chong for short) is the key capital allocator and the largest insider with a 30% stake. He clearly had misallocated capital but appears to be righting the ship. In an effort to boost low valuations (2.4x PE, 0.4x book), management led by Chairman Chong has been evaluating options to monetize non-core assets. The first non-core asset sold earlier in 2025 was a private university. More sales of non-core assets are expected. Your manager is particularly interested in ~100 acres of freehold land in De Centrum City, anchored by universities within a 10 km radius and about 20 km south of Kuala Lumpur city center. Recent transactions imply the land is worth MYR 109-174m (vs book value of 91m). At about the mid-point of estimates, the land bank is worth the entire market capitalization of Protasco. Valuing the core segments (with 70m normalized earnings) at an undemanding 7x earnings results in 490m. Adding the low-end estimate of the land bank and assigning a zero to other non-core segments lead to roughly 600m (vs 130m market cap and 200m EV). Protasco also used to pay dividends until 2019. A one-cent dividend would cost about 5m, which seems well-covered by 184m cash and 50m normalized FCF. 190m debt seems similarly well-covered too. If dividends resume, the company would send another signal that it's on the right path to proper capital allocation.

BSD Analysis:
The manager identifies Protasco as a classic conglomerate discount opportunity trading at extremely attractive valuations of 2.4x PE and 0.4x book value. The investment thesis centers on three profitable core segments generating 125% of net profit while being masked by losses from non-core operations. The road maintenance business, supported by long-term government concessions covering 16,000km of roads, provides a stable foundation with over 20 years of operating history. Chairman Chong, holding a 30% stake, appears committed to value realization through asset monetization, having already sold a private university in 2025. The key catalyst is approximately 100 acres of freehold land near Kuala Lumpur valued at MYR 109-174 million, roughly equal to the entire market capitalization. The manager's sum-of-the-parts analysis suggests fair value of MYR 600 million versus the current MYR 130 million market cap, representing significant upside potential. Strong balance sheet metrics with MYR 184 million cash and MYR 50 million normalized free cash flow support potential dividend resumption. This appears to be a compelling turnaround story with substantial hidden asset value and improving capital allocation.

Pitch Summary:
A recent addition is Able Engineering Holdings ("Able"). Able is engaged in building construction and RMAA (repair, maintenance, addition, and alteration) projects for Hong Kong public works. Able trades below cash and 6x earnings despite double-digit growth in revenue and net income for the past 2 years. Fundamentals seem strong with double-digit ROE, stable FCF, and consistent and growing dividends since 2022. Topping off the story is a roughly 9% dividend yield. The catch may be an office building that is carried on the books at roughly the same value as Able's market value. The building was developed at the cyclical peak and has already been impaired once because of near-record high vacancy rates (17%) in the Hong Kong office market. Kowloon East, where the building is, reports even worse vacancy at 24%. Fears of additional impairments appear to depress the stock. The stock appears to offer substantial upside even considering worst-case impairments. A FCF multiple of 8x seems conservative for Able that has a six-decade operating history, government-issued licenses for large public housing projects, and strong growth of near-3x EBIT and 2x net income in past 3 years supported by strong government spending. Applying that to normalized FCF of HKD 350m results in a target of 2.7b market value (vs 1.4b today). The impaired office building is held at 1.34b on the balance sheet after an initial 13% impairment. Another 25-35% impairment, if materialized, will match severe GFC-style downturns. The severe stress test would shave 380-540m off the target market value, leaving 2.2-2.3b left and implying plenty of upside and substantial margin of safety. It's unlikely for Hong Kong offices to remain in a permanent trough given the region's dynamism and role as a key financial center for China. Geoffrey West, in his seminal work "Scale", wrote about how cities do not die like companies and biological organisms do. Cities are social and informational networks powered by human interaction and innovation. Because cities continuously import resources, reinvent themselves, and adapt, they are far more resilient than living beings and most companies. Further upside may be warranted when leasing and sentiment improves in the office market. China's ambitious plans to integrate Hong Kong with the Guangdong–Hong Kong–Macao Greater Bay Area (GBA) will result in greater demand of public housing, directly supporting Able's business.

BSD Analysis:
The manager presents a compelling value play in Able Engineering Holdings, a Hong Kong construction company trading at attractive metrics despite strong fundamentals. The company trades at 6x earnings with double-digit ROE, stable free cash flow, and a 9% dividend yield, while showing impressive growth with 3x EBIT and 2x net income expansion over three years. The key risk centers on an office building asset carried at book value equal to the entire market cap, which has already been impaired once due to 17% vacancy rates in Hong Kong's office market. The manager's stress-test analysis suggests substantial upside even under severe impairment scenarios, with a target valuation of HKD 2.7 billion versus the current HKD 1.4 billion market cap. The investment thesis relies on Able's six-decade operating history, government licenses for public housing projects, and potential benefits from China's Greater Bay Area integration plans. The manager views Hong Kong's office market downturn as temporary, citing the city's resilience and role as China's financial center. This appears to be a classic deep value opportunity with significant margin of safety and multiple catalysts for revaluation.

Pitch Summary:
Another recent addition is Protasco. Listed in Malaysia, Protasco is a micro-cap conglomerate with 10 segments. There are only 3 core profitable segments that are masked by losses from non-core segments. The most important segment is road maintenance underpinned by long-term concessions with the federal government and state authorities. Protasco has more than 20 years of operating history and maintains over 16,000km (~10,000 miles) of roads. The maintenance segment is supported by two other segments - engineering & consultancy services, and trading & manufacturing which supplies pavement materials (asphalt premix, bitumen), construction materials, and highway safety equipment. Core segments accounted for 89% of FY24 revenues but an astonishing 125% of FY24 net profit. This is because of losses from 4 out of the 7 non-core segments. Chairman and co-founder Dato' Sri Ir. Chong Ket Pen (Chong for short) is the key capital allocator and the largest insider with a 30% stake. He clearly had misallocated capital but appears to be righting the ship. In an effort to boost low valuations (2.4x PE, 0.4x book), management led by Chairman Chong has been evaluating options to monetize non-core assets. The first non-core asset sold earlier in 2025 was a private university. More sales of non-core assets are expected. Your manager is particularly interested in ~100 acres of freehold land in De Centrum City, anchored by universities within a 10 km radius and about 20 km south of Kuala Lumpur city center. Recent transactions imply the land is worth MYR 109-174m (vs book value of 91m). At about the mid-point of estimates, the land bank is worth the entire market capitalization of Protasco. Valuing the core segments (with 70m normalized earnings) at an undemanding 7x earnings results in 490m. Adding the low-end estimate of the land bank and assigning a zero to other non-core segments lead to roughly 600m (vs 130m market cap and 200m EV). Protasco also used to pay dividends until 2019. A one-cent dividend would cost about 5m, which seems well-covered by 184m cash and 50m normalized FCF. 190m debt seems similarly well-covered too. If dividends resume, the company would send another signal that it's on the right path to proper capital allocation.

BSD Analysis:
The manager identifies a classic conglomerate discount opportunity in Protasco, where profitable core operations are obscured by loss-making non-core segments. The investment thesis relies on management's asset monetization strategy to unlock value from undervalued land holdings and refocus on the profitable road maintenance business. With the company trading at just 2.4x PE and 0.4x book value, the valuation appears extremely attractive for a business with 20+ years of government-backed road maintenance concessions. The sum-of-the-parts analysis reveals significant upside potential, with the land bank alone worth the entire market capitalization. The 30% insider ownership by the chairman provides alignment, and his recent asset sales signal a commitment to value realization. The strong cash position and normalized free cash flow generation support potential dividend resumption, which would further validate the turnaround story.

Pitch Summary:
A recent addition is Able Engineering Holdings ("Able"). Able is engaged in building construction and RMAA (repair, maintenance, addition, and alteration) projects for Hong Kong public works. Able trades below cash and 6x earnings despite double-digit growth in revenue and net income for the past 2 years. Fundamentals seem strong with double-digit ROE, stable FCF, and consistent and growing dividends since 2022. Topping off the story is a roughly 9% dividend yield. The catch may be an office building that is carried on the books at roughly the same value as Able's market value. The building was developed at the cyclical peak and has already been impaired once because of near-record high vacancy rates (17%) in the Hong Kong office market. Kowloon East, where the building is, reports even worse vacancy at 24%. Fears of additional impairments appear to depress the stock. The stock appears to offer substantial upside even considering worst-case impairments. A FCF multiple of 8x seems conservative for Able that has a six-decade operating history, government-issued licenses for large public housing projects, and strong growth of near-3x EBIT and 2x net income in past 3 years supported by strong government spending. Applying that to normalized FCF of HKD 350m results in a target of 2.7b market value (vs 1.4b today). The impaired office building is held at 1.34b on the balance sheet after an initial 13% impairment. Another 25-35% impairment, if materialized, will match severe GFC-style downturns. The severe stress test would shave 380-540m off the target market value, leaving 2.2-2.3b left and implying plenty of upside and substantial margin of safety. It's unlikely for Hong Kong offices to remain in a permanent trough given the region's dynamism and role as a key financial center for China. Further upside may be warranted when leasing and sentiment improves in the office market. China's ambitious plans to integrate Hong Kong with the Guangdong–Hong Kong–Macao Greater Bay Area (GBA) will result in greater demand of public housing, directly supporting Able's business.

BSD Analysis:
The manager presents a compelling value play in Able Engineering Holdings, a Hong Kong construction company trading at attractive metrics despite operational strength. The investment thesis centers on a classic sum-of-the-parts opportunity where the market is overly penalizing the stock due to concerns about an impaired office building. With the company trading at 6x earnings and below cash value while generating double-digit revenue and earnings growth, the valuation appears disconnected from fundamentals. The manager's stress-testing approach is thorough, modeling severe 25-35% additional impairments on the office building and still finding substantial upside potential. The company's six-decade operating history, government licenses for public housing projects, and 9% dividend yield provide defensive characteristics. The thesis is further supported by China's Greater Bay Area integration plans, which should drive increased public housing demand and directly benefit Able's core construction business.

Pitch Summary:
Another recent addition is Protasco. Listed in Malaysia, Protasco is a micro-cap conglomerate with 10 segments. There are only 3 core profitable segments that are masked by losses from non-core segments. The most important segment is road maintenance underpinned by long-term concessions with the federal government and state authorities. Protasco has more than 20 years of operating history and maintains over 16,000km (~10,000 miles) of roads. The maintenance segment is supported by two other segments - engineering & consultancy services, and trading & manufacturing which supplies pavement materials (asphalt premix, bitumen), construction materials, and highway safety equipment. Core segments accounted for 89% of FY24 revenues but an astonishing 125% of FY24 net profit. This is because of losses from 4 out of the 7 non-core segments. Chairman and co-founder Dato' Sri Ir. Chong Ket Pen (Chong for short) is the key capital allocator and the largest insider with a 30% stake. He clearly had misallocated capital but appears to be righting the ship. In an effort to boost low valuations (2.4x PE, 0.4x book), management led by Chairman Chong has been evaluating options to monetize non-core assets. The first non-core asset sold earlier in 2025 was a private university. More sales of non-core assets are expected. Your manager is particularly interested in ~100 acres of freehold land in De Centrum City, anchored by universities within a 10 km radius and about 20 km south of Kuala Lumpur city center. Recent transactions imply the land is worth MYR 109-174m (vs book value of 91m). At about the mid-point of estimates, the land bank is worth the entire market capitalization of Protasco. Valuing the core segments (with 70m normalized earnings) at an undemanding 7x earnings results in 490m. Adding the low-end estimate of the land bank and assigning a zero to other non-core segments lead to roughly 600m (vs 130m market cap and 200m EV). Protasco also used to pay dividends until 2019. A one-cent dividend would cost about 5m, which seems well-covered by 184m cash and 50m normalized FCF. 190m debt seems similarly well-covered too. If dividends resume, the company would send another signal that it's on the right path to proper capital allocation.

BSD Analysis:
The manager identifies a compelling turnaround opportunity in Protasco, a Malaysian micro-cap conglomerate trading at extremely attractive valuations of 2.4x PE and 0.4x book value. The investment thesis centers on a profitable core business masked by non-core segment losses, with road maintenance operations generating 125% of net profit despite representing only 89% of revenues. The company maintains over 16,000km of roads under long-term government concessions, providing stable cash flows supported by complementary engineering and manufacturing segments. Chairman Chong, holding a 30% stake, appears committed to value realization through non-core asset monetization, having already sold a private university in 2025. The manager's sum-of-the-parts analysis reveals significant hidden value, particularly in 100 acres of freehold land worth potentially MYR 109-174 million versus a MYR 130 million total market cap. The target valuation of MYR 600 million represents substantial upside, with potential dividend resumption serving as an additional catalyst for improved capital allocation and investor confidence.

Pitch Summary:
A recent addition is Able Engineering Holdings ("Able"). Able is engaged in building construction and RMAA (repair, maintenance, addition, and alteration) projects for Hong Kong public works. Able trades below cash and 6x earnings despite double-digit growth in revenue and net income for the past 2 years. Fundamentals seem strong with double-digit ROE, stable FCF, and consistent and growing dividends since 2022. Topping off the story is a roughly 9% dividend yield. The catch may be an office building that is carried on the books at roughly the same value as Able's market value. The building was developed at the cyclical peak and has already been impaired once because of near-record high vacancy rates (17%) in the Hong Kong office market. Kowloon East, where the building is, reports even worse vacancy at 24%. Fears of additional impairments appear to depress the stock. The stock appears to offer substantial upside even considering worst-case impairments. A FCF multiple of 8x seems conservative for Able that has a six-decade operating history, government-issued licenses for large public housing projects, and strong growth of near-3x EBIT and 2x net income in past 3 years supported by strong government spending. Applying that to normalized FCF of HKD 350m results in a target of 2.7b market value (vs 1.4b today). The impaired office building is held at 1.34b on the balance sheet after an initial 13% impairment. Another 25-35% impairment, if materialized, will match severe GFC-style downturns. The severe stress test would shave 380-540m off the target market value, leaving 2.2-2.3b left and implying plenty of upside and substantial margin of safety. It's unlikely for Hong Kong offices to remain in a permanent trough given the region's dynamism and role as a key financial center for China. Geoffrey West, in his seminal work "Scale", wrote about how cities do not die like companies and biological organisms do. Cities are social and informational networks powered by human interaction and innovation. Because cities continuously import resources, reinvent themselves, and adapt, they are far more resilient than living beings and most companies. Further upside may be warranted when leasing and sentiment improves in the office market. China's ambitious plans to integrate Hong Kong with the Guangdong–Hong Kong–Macao Greater Bay Area (GBA) will result in greater demand of public housing, directly supporting Able's business.

BSD Analysis:
The manager presents a compelling value play in Able Engineering Holdings, a Hong Kong construction company trading at attractive metrics despite strong fundamentals. The company trades at 6x earnings with double-digit ROE, stable free cash flow, and a 9% dividend yield, while showing impressive growth with 3x EBIT and 2x net income expansion over three years. The primary risk centers on an office building asset carried at book value equal to the entire market cap, which has already been impaired once due to Hong Kong's challenging office market conditions. The manager's stress-test analysis suggests substantial upside even under severe impairment scenarios, with a target valuation of HKD 2.7 billion versus the current HKD 1.4 billion market cap. The investment thesis relies on Able's six-decade operating history, government licenses for public housing projects, and potential benefits from China's Greater Bay Area integration plans. The manager demonstrates thorough risk assessment while maintaining conviction in the company's resilient business model and Hong Kong's long-term prospects as a financial center.

Pitch Summary:
Additionally, we acquired a new position in Uber during the quarter. We have followed Uber for many years and believe their scale, network effects, growth opportunities and market position, combined with their current valuation make a compelling investment thesis. They have become one of the most recognizable consumer brands in the world and anticipate nearly $200bn in booking transactions for 2025. Over the past three years, they have compounded revenues at 36%, EBITDA at 69% and FCF margins have gone from negative to mid-teens. While the threat of autonomous vehicles looms and is likely weighing on the valuation, we believe that threat is many years away and so view that risk as low, and we expect Uber to compound earnings at ~20% p.a. over the next five years. In fact, we think the fastest way for autonomous vehicle companies to scale is to partner with a large and highly utilized platform like Uber who has dominant market position where it competes.

BSD Analysis:
Uber finally became the business it always promised — profitable, efficient, and globally dominant. Mobility and delivery are both scaling with strong margin expansion, and advertising is quietly becoming a high-margin rocket booster. The platform’s network effects get stronger every year. Regulatory noise is constant, but none of it breaks the model. Uber has more levers than any other gig-economy name by far. Free cash flow is now real and accelerating. A tech giant masquerading as a rideshare app.

Pitch Summary:
We opportunistically initiated a new position in Synopsys as well, who are a market leader in electronic design automation (EDA), notably utilized by semiconductor companies to design chips. They had an uncharacteristic miss on reported revenues during the quarter, stemming from what we believe to be temporary issues, that resulted in a ~35% decline in their share price. We opportunistically used that steep decrease to add what we believe is a great business to the portfolio, that is a direct beneficiary from the secular tailwinds of ‘the democratization of chips’ and Gen AI driven capex and who we anticipate will deliver mid-to-high teens earnings growth over the long-term.

BSD Analysis:
Synopsys is the silent empire behind chip design, with EDA tools that the entire semiconductor industry relies on. AI-driven complexity makes its moat even deeper — no one else can match its scale or software depth. Recurring revenue is growing, margins remain outstanding, and the IP segment adds powerful optionality. The stock rarely looks cheap, but its monopoly-like economics justify it. Every AI chip, every custom accelerator, every advanced node flows through Synopsys. This is one of the safest long-term compounders in tech. Pure mission-critical software.

Pitch Summary:
We also acquired a 2% position in Boston Scientific, a global leader in medical products that treat various cardiovascular and other conditions. Over the last two years they have witnessed a meaningful acceleration in their growth profile based on two primary catalysts: their Farapulse platform for pulse field ablation (PFA) and their Watchman platform for atrial appendage. PFA is a newer medical procedure used to treat atrial fibrillation that is less invasive, more precise and faster than more traditional ablation procedures and with fewer risks than medication. PFA is likely to become the standard of care in this treatment paradigm and Farapulse is poised to be the market Leader. The Watchman segment which already dominates market share, is a permanent implant designed to reduce the risk of stroke in patients with atrial fibrillation, represents a meaningful and accelerating percentage of their revenues. With an overall revenue growth rate in the low double-digit range combined with modest margin expansion, we expect Boston Scientific to grow their earnings in the mid-teens over the next 3-5 years.

BSD Analysis:
Boston Scientific keeps delivering standout growth across cardiovascular, structural heart, and neuromodulation platforms. The pipeline is loaded with high-value launches that boost mix and margin. Execution is consistently strong — rare in med-tech. The market treats BSX as “solid,” when fundamentals scream “elite.” Cash flow is accelerating, and guidance keeps surprising. BSX deserves its premium valuation. A top-tier operator with multi-year tailwinds.

Pitch Summary:
In addition, we initiated a new position in Intuit, a solutions business which houses Quickbooks accounting software, payroll and payments services mostly for small businesses. The company has a dominant share of the small business accounting and do-it-yourself tax software market. Even so, we believe there remains an excellent runway for growth as many small businesses still do not use accounting software, and Intuit has been adept at introducing new features and services to make its products easier and more "intuit"ive to use. Gen AI agents fit neatly into the company's offerings to help guide small businesses manage their finances and business software easily, which frees up time for them to run their businesses, and also see the introduction of AI agents into their Quickbooks offerings enhancing selling prices. We expect Intuit to grow revenue at a mid-teens rate and earnings at a high-teens rate going forward.

BSD Analysis:
Intuit dominates small-business and consumer finance software with a stranglehold on tax, accounting, and fintech workflows. AI integration across TurboTax, QuickBooks, and Credit Karma creates multiple monetization levers. Margins are expanding, and retention is off the charts. Critics say Intuit is mature — but its ecosystems still have enormous cross-sell potential. The company has unmatched distribution to SMBs. Intuit is one of the highest-quality compounders in software. Premium multiple, premium business.

Pitch Summary:
Broadcom is the other major player in the AI chip market, the number one provider of custom chips, and currently receives the majority of the remaining 10c of every dollar being spent by enterprises. As Gen AI use cases mature, and as inference workloads become a bigger piece of the compute pie, we expect that custom chips (and Broadcom’s in particular) will account for a larger share of the total market.

BSD Analysis:
Broadcom has quietly become one of the most powerful infrastructure companies in tech, with networking, custom silicon, and VMware forming an unbeatable triple threat. Margins are elite, cash flow is absurd, and pricing power is unmatched. The VMware integration is messy but transformative — recurring revenue mix will rise sharply. AVGO doesn’t chase hype; it monetizes real infrastructure bottlenecks. The market underestimates how strategic Broadcom is in the AI data-center stack. A slow-moving juggernaut that compounds like a software company. Very few names have this level of durability.

Pitch Summary:
NVIDIA produces the fastest chips that are able to process compute intensive tasks like Gen AI training models extremely efficiently, are very flexible so can be used for any type of workload, and as a result are the chips in highest demand as the hyperscalers build out their Gen AI infrastructure (NVIDIA currently receiving 90c of every dollar spent on AI accelerated semiconductors). Their business has a very strong competitive moat, which is partly about the speed of their chips, but also the entire ecosystem they have built around them (programing language, training models and associated network effects).

BSD Analysis:
NVIDIA keeps accelerating while the rest of the semiconductor world runs out of breath. Its GPU roadmap now dictates the pace of global AI development, and customers behave accordingly. Software layers like CUDA, Triton, and NeMo are turning the business into a full-stack AI empire. Networking is becoming as important as silicon, locking customers even deeper into the ecosystem. Valuation looks aggressive only if AI hits a wall — and nothing suggests it will. Nvidia is not just winning; it’s widening the gap. Still the uncontested king of AI compute.

Pitch Summary:
Plover Bay, a Hong Kong-based networking firm, exemplifies Longriver’s focus on owner-operator, asset-light businesses. Its Peplink routers and SpeedFusion technology enable seamless failover and bandwidth aggregation across multiple connections, crucial for remote, mobile, and industrial applications. The company’s partnership with Starlink as an authorized technology provider expanded deployments in cruise lines, mining, and emergency services. With ROE near 78% and growing subscriptions from its InControl platform, Plover Bay’s recurring revenue mix continues to rise.

BSD Analysis:
Plover Bay builds high-performance SD-WAN and wireless connectivity gear at attractive margins, serving SMBs and edge deployments globally. Demand is rising as enterprises shift to hybrid networks and remote monitoring. Asset-light, cash-generative, and disciplined, Plover Bay consistently punches above its weight. The market underrates its niche dominance. Solid EM tech compounder with strong fundamentals.

Pitch Summary:
Last quarter, we discussed how management at Dentsply Sirona, Inc. (XRAY), one of the world’s leading suppliers of dental equipment and supplies, had been laying the groundwork for a turnaround for more than two years. Those efforts had yet to be reflected in the stock price. In the third quarter, CEO Simon Campion stepped down after three years at the helm and was replaced by Daniel Scavilla. Under Campion, XRAY focused on SKU rationalization and other cost initiatives but failed to keep up with its peers in terms of top-line growth. CEO Scavilla has a record of sales success at Globus Medical Inc. and Johnson & Johnson. We are encouraged by his initial strategies to arm the sales force better to go to market with the company’s existing portfolio and near-term goals to improve margins and free cash flows. Dentsply was among the Fund’s worst performers for the quarter, however trading at 6.7X estimated earnings, its valuation seems extremely discounted. Thus we will remain patient and sit tight with the position believing that the upside potential far outweighs the downside risk. However, our patience has a limit, and we will closely monitor XRAY’s progress.

BSD Analysis:
Leadership change plus a renewed sales focus could catalyze a multi-year margin and FCF recovery on top of prior SKU rationalization. At ~6–7x EPS, the stock embeds low expectations; execution could drive a sharp re-rating. Monitor organic growth reacceleration, gross margin lift, and working capital discipline. Downside contained by valuation; thesis rests on operating turnaround.

Pitch Summary:
Another industry leader that caught our attention in early 2024 is Calavo (CVGW), which is headquartered in Santa Paula, California. Their unique health-conscious food products were intriguing, but they were in the midst of a management transition, so it was put on our watch list. After a series of research calls uncovering an improving outlook, we began to accumulate the stock early this year. CVGW is a leading marketer and distributor of avocados and guacamole. After a multi-year period of mismanagement that included several CEOs, the long-time former chief executive came out of retirement to stabilize operations. He is aligned with shareholders receiving large equity grants that vest significantly higher than current stock levels and has purchased a sizeable number of shares in the open market. Since returning to the business, he has focused on exiting low-margin business lines and growing the prepared guacamole business that was 10% of total sales last year but has double the gross margin of the core business. This business grew +40% YOY in the latest quarter. CVGW believes they can double the size of this business within the next two years, which would be fruitful for Calavo’s earnings potential. The evolving narrative positions Calavo less as a commodity-dependent packer and more as a growing “fresh + value-added” food company. If management can scale the prepared guacamole business, control costs, and navigate tax/regulatory risks, we believe shareholders will be rewarded. We aren’t the only believers. Calavo received an unsolicited buyout offer for $32 a share in July. Further, the downside risk seems to be limited, supported by a solid balance sheet that includes around $3.50 per share of net cash plus $3 a share of cash potentially from the resolution of a long-standing dispute with Mexican tax authorities.

BSD Analysis:
Management’s return-to-core, mix shift to higher-margin prepared foods, and cost control underpin EPS recovery. With potential strategic interest ($32 offer) and net cash, downside looks buffered. If prepared guac doubles, margin profile and multiple should re-rate toward branded food peers. Key risks: avocado pricing volatility and regulatory/tax outcomes.

Pitch Summary:
A good example is Potbelly (PBPB), the sub sandwich chain which had been a long­-term winner for us before it was acquired during the quarter by the convenience store operator RaceTrac at a +32% premium. We first purchased Potbelly in March 2021, a time when the environment for the restaurant sector was uncertain with depressed sales coming out of COVID-19 lock­-downs. It was the fundamentals and strong insider buying that caught our attention. The new CEO at the time, Bob Wright, came out of retirement to turn around a strong brand that had been mismanaged and was no longer growing. He had a long career in restaurants including prior stints as chief operating officer of Wendy’s and as chief executive officer of Charley’s Cheesesteaks. He surrounded himself with an executive team that had successful restaurant careers, many of whom he worked with in prior roles. The team focused on improving operations through a long list of initiatives. The efforts resulted in consistent same-store growth above restaurant peers and a structural improvement in margins. With operations stabilized, Potbelly is pivoting to growth mode with a target of 2,000 shops from its current footprint of 454. The transformation from a mismanaged restaurant company to a fast-growing franchise worth acquiring proved fruitful for investors.

BSD Analysis:
Classic turnaround → growth story: new leadership, ops overhaul, SSS outperformance, and margin expansion culminating in a takeout premium. While the position exits via M&A, it validates the thesis of brand rehabilitation and franchising runway. For comps, watch unit economics and digital mix; for proceeds redeployment, maintain discipline.

Pitch Summary:
Information Technology. A standout Quality Value holding was Lam Research (LRCX). Lam is a supplier of semiconductor capital equipment (SemiCap) with a leading market position in technology integral to the production of the chip industry’s most advanced integrated circuits. Over the past decade, the SemiCap industry has consolidated, with 5 companies controlling almost 75% of the market. Lam is dominant in the Etch market, a process by which chips are created by selectively removing materials from the wafer to transfer patterns. Industry consolidation and improved customer profitability helped create a structurally more profitable SemiCap industry over time. Lam’s leadership position with Memory customers proved fortuitous, as many of the key applications used by those customers became mission-critical for manufacturers producing today’s leading-edge chips (even outside of the Memory industry). This leaves the company uniquely positioned to gain share in an industry that already benefits from structurally higher customer capital intensity and growing base of recurring revenue. A cyclical downturn and market volatility earlier this year gave us the chance to buy shares at a compelling valuation. A new upcycle and clear market share gains helped drive strong recent performance in the shares.

BSD Analysis:
Lam benefits from oligopolistic structure, rising wafer-fab capex intensity, and etch leadership tied to advanced nodes. Memory-led position is now leveraged into logic/foundry, boosting share gains. Recurring spares/service add resilience. On a mid-cycle EV/EBITDA, shares retain upside into the upcycle; key risk is export controls and capex timing.

Pitch Summary:
Consumer Discretionary. Our best-performing holding in the quarter, D.R. Horton (DHI), came from our Deep Value bucket. The largest homebuilder in the country, DHI enjoys around a 10% market share with scale advantages in a highly fragmented industry. The company has a particularly strong position in entry-level homes. To produce affordable housing, D.R. Horton runs the business with speculative inventory, meaning it builds homes before buyer contracts are signed. This allows the company to operate the business more like a manufacturer thereby reducing unit costs with most savings passed to the homebuyer. To accommodate this business model, the company’s balance sheet is notably strong, allowing for maximum flexibility in capital allocation. For more than a decade, management pivoted the company’s balance sheet away from owning large swaths of undeveloped land, preferring instead to use less capital-­intensive methods to source buildable lots. This self-help strategy reduced the capital commitment to the business and increased returns on investments. Along with the entire homebuilding industry, DHI sold off late in late 2024 and early this year, owing to weak demand and heavy discounting across the industry. We used the selloff to establish a position, marking our fourth time owning DHI. We further increased our weighting during the broad market selloff at the end of the first quarter and in early Q2. The stock rose sharply this quarter on earnings that beat analyst expectations on both home deliveries and gross margin. In addition, orders — while flat year over year — exceeded the street’s expectations by more than 4 percentage points. Management accelerated its share repurchases, buying back more than 3% of the company in Q3 alone. That, plus falling long-term interest rates and a 13-F filing by Berkshire Hathaway detailing a new stake in DHI, also propelled the shares. DHI currently trades at 2.1x book value, which is slightly higher than the company’s long-term median multiple of 1.8x. In our view, the company’s return on and of capital has structurally improved, which will inflate this multiple, all else equal. If not for $7 billion of share repurchases over the past 12 quarters, DHI would be trading at a discount of 1.5x, despite a sustainable return on equity of greater than 15%.

BSD Analysis:
DHI’s spec-build model and lot-light strategy drive cost advantages and higher ROIC, supporting premium-to-history P/B. Beat-and-raise quarter, robust orders, and >3% buyback in Q3 show strong cash generation. With entry-level exposure and falling rates, volumes and margins can hold; Berkshire’s stake adds validation. Watch cycle sensitivity and land pipeline discipline.