Investment Pitches

Pitch Summary:
Lululemon was initiated as a new position during the quarter. The company has grown revenue from $4B in 2020 to $11B over the last twelve months while maintaining 58% gross margins and 20% operating margins. With strong brand loyalty and international growth (22% YoY), profitability is robust globally—especially in China, where margins mirror North America’s 36–37%. The firm’s 5-year ROIC averages 35%, and it continues to repurchase shares.

BSD Analysis:
Lululemon continues to outrun the athleisure pack with brand heat, category expansion, and a DTC engine that prints margins most apparel companies can only dream of. International growth — especially China — remains a major tailwind. The product machine hasn’t lost a beat, and pricing power is intact. The stock screens expensive, but LULU keeps proving it deserves that premium. As long as the brand stays culturally relevant, this remains a top-tier retail compounder.

Pitch Summary:
Alibaba’s June quarter earnings showed $34.6B in revenue and $6B in net income. Management is leveraging its $82B cash balance to invest aggressively in AI + Cloud and to dominate quick commerce. The company has reportedly taken share from rival Meituan while maintaining disciplined spending. JB Global believes Alibaba can create a self-reinforcing flywheel: higher engagement leading to stronger revenue, R&D, and technological advantage.

BSD Analysis:
Alibaba’s operating reset is finally showing results — Taobao is stabilizing, margins are improving, and Cloud is reaccelerating as AI infrastructure demand ramps. The breakup plan fizzled, but a leaner org and tighter capital discipline are boosting earnings quality. Sentiment is still stuck in 2021, pricing in regulatory ghosts that no longer matter. With a fortress balance sheet, aggressive buybacks, and multiple engines turning the corner, BABA remains one of the most mispriced large-cap tech assets globally.

Pitch Summary:
Infuse outlined both the bear and bull cases for TransMedics. The bear case centered on high aircraft ownership costs and dependence on donor-after-cardiac-death (DCD) liver transplants with limited international traction. The bull case emphasized its dominant technology and vertical integration, which have transformed transplant logistics. Hospitals value TransMedics for improved scheduling, better outcomes, and reduced surgeon overtime. The manager expects revenue to grow 4–5x as new organ indications and global expansion materialize.

BSD Analysis:
TransMedics is redefining organ transplantation with its Organ Care System, expanding the donor pool and enabling superior outcomes versus cold storage. Procedure growth is accelerating, margins are improving, and the logistics network is scaling into a fully integrated transplant platform. The TAM is large, underpenetrated, and has limited competition. Bears point to valuation, but the technology lead and margin trajectory justify a premium. TMDX is one of the most explosive med-tech growth stories in the market.

Pitch Summary:
Swatch is unique. The company has amazing brands, some not properly utilised at all, and current management has evidenced adroit marketing skills. The amazing 2022 launch of “Moonswatch” which sold 1million pieces in its first year at US$260apiece, whilst arguably a short-lived sugar hit, does have some medium-term benefits in opening younger markets to a wider product set, and paved the way for other multi-brand collaborations not available to other makers. It suggests there continues to be genuine marketing savvy within the company, allied to ongoing phenomenal design and technology skills. Insofar as these skills and brands are intangible, investors are not paying for them. The unique nature of Swatch shares, as a luxury participant trading at a 32% discount to NTA of CHF221/share is compelling. But how is that gap closed up? We see four factors that could make a serious difference: some form of capital management; improvement in the Greater China outlook; a selected brand revitalisation or even divestment; and a change in US tariff environment for Switzerland. In the absence of a “moonshot” takeover offer which entices the Hayeks to sell … there is still scope for shareholder friendly action, potentially to free up funds from the investment properties… At these share prices, the company should be retiring equity… To test the capacity for appropriate divestment of the Old Bond Street and Zurich properties in exchange for a far more attractive investment – Swatch shares – … is a business school no-brainer. … we view Swatch more as a free option on a cyclical pick-up in the Chinese consumer, capital management and brand revitalisation from a team well capable of its execution. Near-term earnings prospects look dull, but we have seen in the past how quickly that can change. Given the shares trade at only ~6x EV/2023 EBIT, that’s hardly priced in.

BSD Analysis:
Balance-sheet strength (~CHF1.1B net cash/financial assets mid-’25), deep brand portfolio, and hidden real-estate value (~CHF4B mgmt-indicated) create downside protection while buybacks could catalyze rerating. If Greater China recovers and premium brands (Blancpain/Breguet) are revitalized, operating leverage is significant given ~CHF5B fixed cost base and historically stable ~79% gross margin. Current valuation embeds tariff and China headwinds; a partial asset monetization plus even modest SSS growth could move EBIT sharply higher from depressed H1’25 levels. Key risks: tariff persistence, FX (strong CHF), and governance inertia.

Pitch Summary:
In March 2024, Eagle Point Capital purchased British American Tobacco (BTI) at a 16% free cash flow yield and 10% dividend yield. The market’s pessimism stemmed from faster-than-expected volume declines, menthol ban risk, and illicit Chinese vape competition undermining reduced-risk product investments. However, the managers argued that BTI’s free cash flow was stable and likely to grow modestly. Tobacco companies benefit from regulation limiting competition and brand loyalty that supports pricing power. With low reinvestment needs, substantial free cash flow is distributable to shareholders, creating an asymmetric risk/reward opportunity.

BSD Analysis:
Eagle Point’s thesis reflects a classic contrarian value setup. BTI trades at ~8x forward earnings with a double-digit yield and stable cash flows. Despite regulatory headwinds, pricing power and capital discipline support durable FCF. The stock’s depressed valuation and high payout ratio provide strong downside protection and income potential, positioning it as a defensive compounder in a volatile market.

Pitch Summary:
We upgraded our biopharmaceutical exposure with the purchase of Vertex Pharmaceuticals, a high-quality biotech with a leading franchise in cystic fibrosis. We have been following the company for some time and see its pain treatments as its next big opportunity. Some disappointments in the timing of clinical trials for chronic pain enabled us to establish a position at what we view as a moderate valuation relative to its pipeline.

BSD Analysis:
Vertex maintains one of biotech’s strongest franchises with durable CF cash flows funding high-return pipeline growth. Pain and cell therapy programs could diversify earnings from 2027 onward. The balance sheet is debt-free with $12B+ cash, enabling aggressive R&D and buybacks. Shares trade near 22x forward earnings—reasonable for a 10%+ EPS CAGR and best-in-class profitability.

Pitch Summary:
Datadog operates a monitoring, observability and data security platform for cloud applications. Observability is a large and growing end market with penetration rising as use and complexity of applications grow, requiring more performance monitoring. Datadog is a leader in cloud application monitoring, offering ease of use, breadth and scalability superior to its competitors. We believe large language model (LLM) observability, a rapidly growing market due to the acceleration of Gen AI workloads, creates a new vector for growth not reflected in fundamental estimates.

BSD Analysis:
Datadog remains a key beneficiary of enterprise cloud adoption and GenAI observability demand. Strong ARR growth (~25%) and best-in-class gross margins (~80%) provide operating leverage. The company’s continuous innovation and cross-product expansion sustain >20% revenue growth trajectory. Shares trade near 15x forward sales, fair for a top-tier SaaS platform.

Pitch Summary:
Oracle, a leading provider of database software for large enterprises, has successfully expanded into cloud infrastructure as a platform to run generative AI workloads. Oracle is gaining share among hyperscalers due to its lower-cost data center architecture, which is well-suited for large-scale AI training workloads. We believe Oracle’s share of the market will continue to grow over the next few years with profitability of this growth underappreciated by the market.

BSD Analysis:
Oracle’s AI-ready cloud infrastructure positions it to capture share in enterprise workloads. Cloud revenue growth exceeds 25%, with margin expansion as utilization rises. The company’s disciplined capital returns and recurring database revenue underpin durable FCF. Trading at ~20x forward earnings, valuation remains reasonable given structural growth in OCI and AI adoption.

Pitch Summary:
Globant, a leading global technology (IT) service company, was one of the first providers of design, engineering, and innovation services at scale. IT service providers did very well during the pandemic, as all corporations needed help designing IT solutions to handle the work-from-home load and the ever-evolving technology services landscape (i.e., transition from on-premises to cloud and AI deployment). Like many beneficiaries of the pandemic, a lull followed the boom, with slower sales and weakening earnings growth. Additionally, questions arise as to whether there will be any negative structural implications for the IT service industry, given the rise of AI. We feel these developments have been more than discounted by the over 80% decline in the stock price from its pandemic peak and the massive valuation de-rating, a 10-year average forward P/E of 40 times reduced to the current forward P/E multiple of 10 times. There are early signs that the mindset is now switching from costs/efficiency to product/experience, which is more indicative of a return to growth-oriented work.

BSD Analysis:
Globant got hit by the global IT spending slowdown, but anyone calling this a broken growth story hasn’t looked at the pipeline. The company still sits at the premium end of digital transformation, AI enablement, and cloud-native development — the exact areas enterprises can’t cut forever. Globant’s studio model gives it diversification and cross-sell potential most IT consultancies can only pretend to have. Margins held up despite macro softness, and the company has been quietly tightening execution, improving win rates, and expanding within major accounts. The stock is priced like a wounded mid-tier outsourcer even though Globant’s brand, talent base, and domain specialization put it in an entirely different league. When tech budgets finally unfreeze, Globant’s operating leverage will snap back faster than peers. This is a wrongly punished compounder.

Pitch Summary:
Coats Group was added during the quarter and has the distinction of the longest operating history in the portfolio, over 250 years. Its key competitive advantage lies in its leadership and scale in the global thread industry, creating high quality threads that brands rely on to avoid costly production risk and to ensure garment durability. They are applying a similar strategy to the footwear industry, supplying key functional footwear components (i.e., insoles, heel counters and toe puffs), across the product spectrum: casual, luxury, sportswear, and performance. The company acquired OrthoLite this summer to move into the premium insole market. Besides trading below our intrinsic value estimate, the company can integrate and streamline its footwear assets to boost margins so earnings can grow faster than sales.

BSD Analysis:
Coats is the industrial thread-maker the market keeps treating like a dusty legacy manufacturer, even though the company quietly reinvented itself as a high-margin materials tech business. Its exposure to performance threads, composites, and fire-resistant materials gives it pricing power and resilience that old-school textile producers can’t touch. The cost-cutting and portfolio cleanup over the past few years have structurally elevated margins, and cash generation has been consistently strong even with soft apparel volumes. Coats’ customer relationships are sticky, its global footprint is unmatched, and its innovation pipeline gives it real leverage to automotive, telecom, and protective gear demand. The stock trades like a cyclical materials name, but Coats’ earnings profile now looks more like a specialty manufacturer. Once global apparel stabilizes and industrial end markets firm up, the market will realize Coats is no longer the flabby operator it remembers.

Pitch Summary:
Fever-Tree is a premium non-alcoholic mixers producer (tonic water is its largest product) which has signed a deal with Molson Coors to manufacture and distribute Fever-Tree mixers in the US. Fever-Tree took the moribund UK mixer market by storm from its inception in 2003. When it moved to the US in 2008, it shipped its finish product in the bottles we see on the shelf. Early on, this strategy did not matter as its growth in the UK drove operating margins above 30%. Over time, the US became its largest market, and the pandemic and supply chain bottlenecks led to skyrocketing costs driving margins below 10%--shipping finished product did not make sense anymore. A major part of our investment thesis is a return to healthy margins, closer to 20%, as the transition to Molson Coors supplying US product is completed.

BSD Analysis:
Fever-Tree created the premium mixer category, but the stock has paid heavily for supply-chain chaos, glass inflation, and U.S. distribution headaches. The reset is underway: logistics are normalizing, margins are recovering, and brand equity remains incredibly strong in both retail and on-premise. Despite the turbulence, Fever-Tree’s global footprint and price premium are intact — competitors haven’t cracked the formula. The U.S. can still be a huge driver if execution improves even modestly. The stock trades like the brand has faded, but consumer loyalty suggests otherwise. If cost pressures continue easing, Fever-Tree’s operating leverage will surprise skeptics. A premium beverage turnaround with real brand power behind it.

Pitch Summary:
Tecan Group flourished during the pandemic on strong instrument orders but then suffered the post-pandemic letdown. What drew our attention was a series of negative breaks: weakness in Chinese orders, defunding of medical research by the Trump administration, temporary order weakness from its largest customer, and the tariff threat. The market harshly discounted these threats, allowing us to buy at a significant discount to our estimate of intrinsic value.

BSD Analysis:
Tecan is a precision life-science instrumentation and automation specialist sitting at the heart of diagnostics, drug discovery, and bioprocessing workflow expansion. Its instruments are mission-critical, sticky, and embedded deep inside high-growth biotech labs. The recurring consumables and services business continues to scale, driving margin expansion and smoothing cyclicality. Tecan’s acquisition strategy has broadened its portfolio without compromising quality or balance-sheet strength. Investors routinely underestimate how essential lab automation will be as throughput and reproducibility demands rise. This is a Swiss med-tech compounder with real defensibility. A high-quality growth name still priced too conservatively.

Pitch Summary:
Two Healthcare names were added in the quarter: Hikma Pharmaceuticals, a specialty and generic manufacturer of pharmaceutical products based in the UK, and Tecan Group, a Swiss-based global leader in laboratory automation and liquid handling solutions. The former has a contract manufacturing business which is adding US capacity that could be useful for foreign pharmaceutical companies looking to avoid tariffs by moving to domestic production facilities. Our thesis includes margin recovery, given the added cost from its recent capital spending programs and negative sentiment surrounding its injectables division.

BSD Analysis:
Hikma is a generics and injectables powerhouse that thrives on operational discipline and supply reliability, not flashy pipelines or hype. Its injectable business has become a major margin engine, benefiting from capacity investments and manufacturing excellence. The generics segment is stabilizing after years of pricing pressure, and new launches should support modest growth. Meanwhile, branded generics give Hikma exposure to faster-growing MENA markets where it retains deep market relationships. The stock trades at a discount because investors treat Hikma like a low-quality generic manufacturer — but its execution is far stronger than peers. Cash flow is solid, leverage modest, and visibility improving. A defensive pharma operator with real upside.

Pitch Summary:
Voyager Technologies is a dual-track defense and space platform: a high-growth national security subcontractor today and a long-dated call option on the post-ISS commercial space station economy via Starlab. In the core business, Voyager supplies mission-critical propulsion and control subsystems to Lockheed Martin’s Next Generation Interceptor (NGI) program while layering in ISR, space infrastructure, and AI/ML-enabled software in partnership with Palantir. On the space side, it owns a majority stake in Starlab, a planned commercial low-earth-orbit station backed by Airbus, Mitsubishi, MDA and others that is positioned as a leading candidate to replace the International Space Station when it is decommissioned around 2030. The stock has de-rated as NASA revised its commercial LEO procurement path and Voyager stumbled on communicating backlog seasonality, leaving shares trading at a modest multiple of 2027 sales despite a large qualified pipeline and NGI production visibility. Management believes Starlab is ~80% funded from non-dilutive sources and could eventually produce ~$1.5 billion in annual free cash flow, while assigning limited value to pre-2030 milestones in their own framing. A recent CLD rule tweak actually reinforces NASA’s preference for multinational consortia, which structurally favors the Voyager/Airbus-led coalition versus less credible competitors. With a SOTP view—placing a growth multiple on the defense business and probability-weighted value on Starlab—the author sees ~100–190% upside over 1–2 years as contracts, funding marks, and a second missile-defense program clarify the earnings power.

BSD Analysis:
From a BSD perspective, Voyager is an asymmetric, catalyst-rich SOTP where the core defense/national security franchise largely underwrites downside while Starlab is being valued at only a low-single-digit probability of success. The NGI subcontract, maturing into long-duration production revenue through 2043, plus a $3.6 billion qualified pipeline and likely onboarding to a second missile-defense program, provide a credible path to ~25% organic top-line growth even before additional M&A and cross-sell. Seasonally noisy book-to-bill and conservative backlog definitions obscure this momentum, but those optics should improve as Q3/Q4 awards come through, backlog troughs, and Voyager begins to break out key programs of record more transparently. On the space side, the company already operates the Bishop Airlock on the ISS, giving it operational heritage and direct relationships with sovereign and commercial LEO customers that it can port onto Starlab once funded and built. The key debate is how to handicap NASA’s CLD Phase II/III structure, the SAA vs. BAFA mix, and Starlab’s true probability of “winning” versus Axiom and Blue Origin; the author’s 33–45% success odds are meaningfully higher than what the market is implying. Execution, capital intensity, and potential dilution around Starlab are real risks, as are broader political and budget uncertainties in Washington, but strategic partner capital and insurance on launch mitigate some of the tail risk. If Voyager lands a second missile-defense program and secures a sizable Phase II CLD allocation or strategic up-round in Starlab, the stock likely re-rates toward peer defense-tech multiples with incremental upside as the space option gets repriced closer to its intrinsic value.

Pitch Summary:
Soft99 is a Japanese auto care and fine chemicals company whose equity story today centers on a failed lowball MBO attempt rather than fundamentals. The Tanaka family launched an opportunistic MBO at ¥2,465 per share (~1x P/B), despite Soft99 holding strong market share in auto care, attractive real estate, and under-earning profitability relative to domestic and global peers. Activist Effissimo Capital responded with a competing ¥4,100 tender—66% higher—immediately resetting the clearing price and demonstrating a credible intent to partner with management. The Soft99 board rejected Effissimo’s superior offer using convoluted logic about squeeze-out mechanics and hypothetical risks to non-tendering shareholders, causing temporary market confusion. Effissimo’s subsequent clarification that they are prepared to run a second tender removes this uncertainty and makes family victory highly unlikely under Japan’s reformed corporate governance and takeover guidelines. With governance, precedent, and incentives aligned toward accepting the higher bid, Soft99 offers an attractive near-term event-driven return.

BSD Analysis:
This situation is a classic Japanese governance arbitrage created by a founding-family MBO pitched far below intrinsic value in a market now hostile to such tactics. The board’s rejection of a 66% higher activist bid relies on strained interpretations of takeover guidelines that are unlikely to withstand scrutiny from regulators, investors, or precedent. Effissimo’s willingness to run a second tender removes the only credible barrier to deal completion and significantly reduces downside risk. Given Japan’s accelerating reform agenda, growing acceptance of activism, and recent cases where families were forced to concede, Soft99 is positioned for a high-probability resolution at or near Effissimo’s bid. For sophisticated investors, the dislocation is driven by forced unwind dynamics, legal posturing, and temporary uncertainty—not fundamentals—creating a compelling short-dated event return.

Pitch Summary:
ALEXANDRIA is a life-sciences REIT facing both cyclical and structural pressures that challenge the bull case and threaten long-term earnings power. Oversupply from pandemic-era development, combined with collapsing biotech funding and weak new company formation, has pushed vacancies toward ~25% with more supply still being delivered. These dynamics pressure market rents, leasing spreads, and renewal pricing, while ARE’s financial metrics—occupancy, EBITDA, coverage ratios—are already deteriorating. Structurally, biotech startups increasingly outsource lab work to CROs or shared lab spaces, reducing the need for large urban lab footprints and calling into question ARE’s premium locations and buildouts. Re-purposing ARE’s highly specialized space is expensive and yields are poor, limiting downside protection. Given high leverage, elevated capex, and a dividend exceeding realistic forward AFFO, the stock screens overvalued with material downside risk.

BSD Analysis:
ARE is exposed to both a severe cyclical correction in lab real estate and a multi-year structural shift that reduces demand for in-house R&D facilities. Fundamentals across biotech tenants remain weak—funding is down sharply, many tenants are distressed, and lease liabilities outstrip market caps across a large subset of ARE’s roster. Simultaneously, ARE expanded its balance sheet at the peak of market exuberance, worsening leverage as NOI weakens and rents reset lower. With cash rents likely to fall meaningfully and dividend coverage deteriorating, the REIT trades on outdated assumptions about growth and scarcity value in life-science real estate. Structural trends toward outsourced research, automation, and capital efficiency further erode the long-term economic case for ARE’s premium lab campuses.