Investment Pitches

Pitch Summary:
Molina Healthcare is undervalued relative to its peers, trading at a significant discount despite strong fundamentals and growth prospects. The company's focus on government-sponsored health insurance, particularly Medicaid, positions it well for continued contract wins and member retention. Its valuation metrics, such as forward earnings and EV/sales, suggest a deep value opportunity in the managed care sector.

BSD Analysis:
Molina Healthcare has demonstrated strong growth, with revenue increasing from approximately $26.9 billion in 2021 to an estimated $41.2 billion in 2025. Despite low margins, the company is operationally efficient, maintaining a medical care ratio below 90%. Its strategic acquisitions and competitive contract wins have expanded its market presence. The market's perception of Molina as a Medicaid-dependent operator overlooks its ability to manage churn and capture dual-eligible members. The company's resilience in state-level operations and its undervaluation compared to peers like UnitedHealth and Elevance present a compelling investment case.

Pitch Summary:
Oracle's stock surged by 24% in the month, driven by a significant $317 billion increase in backlog orders, primarily from OpenAI. This highlights Oracle's strong positioning in the AI sector, which is a major growth driver.

BSD Analysis:
Oracle's impressive backlog growth underscores its strategic alignment with AI trends, particularly through its partnership with OpenAI. The market's positive response reflects confidence in Oracle's ability to capitalize on AI-driven demand. However, there are concerns about whether OpenAI can sustain its financial commitments to Oracle. Despite these uncertainties, Oracle's robust order book and its role in the AI ecosystem position it well for future growth. Investors should monitor the sustainability of these orders and the broader AI market dynamics.

Pitch Summary:
ASML's recent sell-off presents a compelling buying opportunity given its strong financial performance and strategic position in the semiconductor industry. Despite management's cautious outlook for 2026 due to macroeconomic uncertainties, the company's fundamentals remain robust. ASML's monopoly in EUV lithography, essential for advanced chip production, positions it as a key beneficiary of the ongoing AI-driven demand surge. The stock's current valuation, at 26 times this year's earnings, is attractive considering its historical multiples and growth prospects.

BSD Analysis:
ASML's Q2 results exceeded expectations, with a 23% YoY revenue increase driven by strong demand for its EUV and DUV lithography machines. The company's service revenue, a high-margin and stable income stream, grew by 41% YoY, highlighting the durability of its business model. Despite geopolitical headwinds, such as Chinese export restrictions, ASML has effectively diversified its revenue base, with increased contributions from Taiwan, South Korea, and the US. The company's gross margin expanded to 53.7%, supported by cost control and operational leverage. ASML's strategic buybacks, totaling €1.4 billion in Q2, underscore management's confidence in the stock's undervaluation. With a projected 15% revenue growth for FY25 and a reaffirmed long-term outlook, ASML remains well-positioned to capitalize on structural semiconductor demand, offering significant upside potential for long-term investors.

Pitch Summary:
Founded in 1949 in Herzogenaurach, Germany, Adidas was the vision of Adolf "Adi" Dassler, who split from his brother Rudolf (the founder of Puma) to create what would become one of the world's most enduring sports brands. Registered under the now-iconic three stripes trademark, Adidas quickly rose to prominence when West German footballers wore its innovative boots to victory in the 1954 FIFA World Cup, a defining moment that cemented its reputation for high-performance sportswear on the global stage. In the decades since, Adidas has expanded far beyond football boots, entering running, basketball and training categories. Along the way, it has pioneered innovations such as screw-in studs and various cushioning and ultra-lightweight footwear and clothing materials. The brand's visibility at the Olympic Games, World Cups and global running events has deepened its association with sporting excellence. In more recent decades, the blending of sports and lifestyle has broadened the company's addressable market as athletic apparel and footwear have become everyday wear. Adidas was pivotal to the history of "athleisure" wear, introducing the tracksuit to non-athletes all the way back in the 1970s. Today, Adidas is the world's #2 player in athletic footwear and apparel, behind category leader Nike. Despite multiple new entrants across different sporting verticals and niches, these brands continue to dominate sportswear on the global stage and generate annual revenues 5x and 3x larger than the third-largest brand, Puma. While strong economic moats can be difficult to find in competitive consumer categories such as apparel and footwear, we continue to believe the brand equity, marketing reach, R&D capabilities and global distribution networks of the world's two leading sportswear brands provide meaningful and durable advantages. Importantly, Adidas consistently reinvests to defend these competitive advantages, including an annual marketing budget of around €3 billion – or roughly 12% of net sales. These funds support high-profile partnerships with athletes like Lionel Messi and Patrick Mahomes, sporting teams like Real Madrid and Manchester United, and sporting leagues and events like UEFA Champions League and the Paris Olympics, reinforcing brand visibility and consumer loyalty. While Nike's dominance is strongest in North America and basketball, Adidas holds sway in the world's most popular sport, football, where its unrivalled presence at global events like the upcoming FIFA World Cup acts as a showcase for the brand. Adidas also benefits from an enviable vault of iconic product silhouettes that are now cross-generational staples blending sports and fashion. The brand's most recent global success story, the Adidas Originals Samba sneaker, has roots tracing back to the 1950s and was officially launched in its current form in 1972. Execution is critical in the sportswear industry, where consumer tastes shift quickly. Over decades, Adidas has demonstrated resilience and adaptability through challenging periods. In the last five years alone, the company has navigated a global pandemic, geopolitical backlash in China, an exit from Russia and the winding down of its Yeezy collaboration. These external shocks compressed profitability and ultimately resulted in a CEO change. Under new leadership, the business has regained strong momentum across key markets. From an investment perspective, periods of disruption like this, in categories where structural growth tailwinds and economic moat drivers remain intact, can present attractive investment opportunities. Earlier this year, consumer health and tariff fears drove material underperformance of the apparel and sportswear sector, creating an attractive entry point for Adidas in the Magellan Global Opportunities strategy. While remaining conscious of broader industry risks – including consumer health, fashion cycles, geopolitics, social supply chain and environmental challenges – we believe Adidas represents a compelling long-term opportunity: a brand with deep heritage, durable competitive advantages, and the ability to continue turning global sports tailwinds into sustainable growth.

BSD Analysis:
Magellan presents a compelling bull case for Adidas, emphasizing the company's position as the world's second-largest sportswear brand with durable competitive advantages. The manager highlights Adidas' dominant position in football, the world's most popular sport, and its iconic brand portfolio including cross-generational products like the Samba sneaker. The investment thesis centers on the company's substantial €3 billion annual marketing budget (12% of sales) that funds high-profile partnerships with athletes, teams, and sporting events, creating meaningful brand moats. The manager views recent disruptions including the pandemic, China backlash, Russia exit, and Yeezy collaboration termination as temporary headwinds that created an attractive entry point. Under new leadership, the business has regained momentum across key markets. The fund sees Adidas as well-positioned to capitalize on structural growth tailwinds in athleisure and global sports, despite acknowledging industry risks around consumer health, fashion cycles, and geopolitical challenges.

Pitch Summary:
Elutia Inc. (ELUT) was a detractor from performance during the quarter. Elutia is a medical device company that produces a biologic envelope to hold cardiac devices (CIED) in place beneath the skin. These devices are typically implanted near the shoulder and have issues with migration (moving beneath the skin). Elutia developed a biologic form of these devices versus plastic versions that are produced by Medtronic. We thought they would sell the whole company to Boston Scientific as they compete directly with Medtronic. Unfortunately, management sold the product to Boston Scientific for only $88 million, far less than what we and they would have expected they would get for it. Management has made the decision to use the money to develop unapproved products to the detriment of shareholders. We had expected a purchase price of over $200 million. While it was a small position across portfolios, it is disappointing, nonetheless. We sold the remaining holdings of ELUT on this news.

BSD Analysis:
The manager expresses significant disappointment with Elutia's management decisions and strategic execution. The sale of their cardiac device envelope product to Boston Scientific for $88 million fell dramatically short of the expected $200+ million valuation, representing a major value destruction event. Management's decision to pursue development of unapproved products rather than maximizing shareholder value through a full company sale demonstrates poor capital allocation. The biologic envelope technology appeared to have competitive advantages over Medtronic's plastic alternatives, suggesting the asset had meaningful value. The manager's complete exit from the position indicates lost confidence in management's ability to create shareholder value. This represents a classic case of management execution risk overwhelming what may have been a solid underlying technology platform.

Pitch Summary:
Zeta Global Holdings Corp. (ZETA) is a marketing technology software company which benefits from multiple market tailwinds in the advertising industry. Zeta's software platform combined with artificial intelligence helps companies' market more efficiently by targeting ads based on specific demographics. The Zeta marketing platform helps customers deliver advertisements through all channels such as email, social media, web, chat, connected TV and video. Zeta is unique in that their platform doesn't use cookies. This reduces risk from a regulatory and customer standpoint as they are not impacted by these issues. Consequently, they can take market share from competitors like Adobe, Salesforce, and Oracle, who have all made legacy acquisitions to enter the space at valuations of 8-20x EV/Revenues. ZETA trades for 3x EV/Revenues. Oracle announced they would be exiting the advertising business on their Q4 2024 earnings call, creating an incremental revenue opportunity for Zeta. Despite the broader softness in software spending, Zeta remains unaffected, citing a healthy demand environment. The company was founded by former Apple CEO, John Scully, and the management team has a strong track record of performance (the company has beaten their revenue guidance for 16 consecutive quarters since their IPO in 2021). Zeta's stock has been volatile throughout the past few months as investors digested a short report in November. As noted above Zeta trades at a significant discount to peers in the software industry at only 3x EV/Revenues vs. 5-7x for the group, despite stronger growth and operating margins.

BSD Analysis:
The manager presents a compelling value opportunity in Zeta Global, emphasizing the company's competitive advantages in marketing technology. The cookie-free platform provides regulatory protection and competitive differentiation versus legacy players like Adobe, Salesforce, and Oracle. Trading at 3x EV/Revenue compared to peers at 5-7x multiples despite superior growth and margins suggests significant valuation upside. Oracle's exit from advertising creates direct market share opportunities for Zeta. The management team's exceptional track record of beating guidance for 16 consecutive quarters demonstrates strong execution capabilities. John Scully's involvement adds credibility and strategic vision. The company's resilience during broader software spending weakness indicates strong competitive positioning. Recent volatility from short seller activity may have created an attractive entry point for long-term investors.

Pitch Summary:
Xeris Pharmaceuticals Inc. (XERS) is a specialty pharmaceutical company with unique products serving large unmet medical needs. Their main product includes Recorlev which is a medication prescribed for the treatment of Cushing's Syndrome (CS). CS is a serious medical condition where out of control cortisol levels wreak havoc on the body, leading to fatigue, weight gain, and hypertension. XERS recently hosted an Investor Day presentation where they announced a 2030 model of $750 million in revenue from the current portfolio, particularly Recorlev. For reference, the total company is expected to generate $285 million in 2025. The gross margins for Recorlev are around 80% and profitability is expected to ramp significantly in the coming years as the company leverages the investments they've already made. Xeris expanded their salesforce by an additional 40 reps in November of 2024. Those reps are now contributing to the 54% quarterly revenue growth XERS achieved in the 2nd quarter. This is an acceleration from Q1 where they grew 44% year over year. While the stock has almost doubled since June when we bought it, we continue to hold it in investor portfolios due to the large opportunity ahead.

BSD Analysis:
The manager outlines an impressive growth story for Xeris Pharmaceuticals, centered on their Recorlev treatment for Cushing's Syndrome. The company's ambitious 2030 revenue target of $750 million represents significant upside from the expected 2025 revenue of $285 million. High gross margins of 80% on Recorlev demonstrate strong pricing power and profitability potential. The acceleration in quarterly revenue growth from 44% to 54% year-over-year indicates strong commercial execution following the salesforce expansion. The manager's decision to hold despite the stock doubling since June suggests confidence in the long-term opportunity. Cushing's Syndrome represents a significant unmet medical need with limited treatment options. The company appears to be successfully scaling its commercial operations and leveraging previous investments for future profitability.

Pitch Summary:
MDxHealth (MDXH) is a prostate cancer diagnostics screening company we initially purchased at around $2 per share a year ago. Prostate is the second most diagnosed cancer type overall and the most common in men. Their portfolio includes Select mdx, Confirm mdx, Genomic Prostate Score (GPS), and the hereditary prostate cancer test. The company has a network of over 7 thousand physicians and has completed over 250 thousand tests in total. With their series of non-invasive tests, they offer physicians and patients additional guidance when making treatment decisions. MDXH has grown revenue each of the last 12 quarters at over 20% and we believe they can accelerate that rate as they recently acquired an additional prostate test. Despite the positive momentum the stock only trades at 2x EV/Revenues vs. peers at 5-9x for similar growth and margin profiles.

BSD Analysis:
The manager presents a compelling value proposition for MDxHealth, highlighting the company's position in the large prostate cancer diagnostics market. With consistent 20%+ revenue growth over 12 consecutive quarters and a recent acquisition to accelerate growth, the company demonstrates strong operational momentum. The extensive physician network of 7,000+ doctors and 250,000+ completed tests indicates meaningful market penetration and validation. The valuation appears attractive at 2x EV/Revenue compared to peers trading at 5-9x multiples despite similar growth profiles. The manager's entry point around $2 per share suggests significant appreciation potential. The non-invasive nature of their diagnostic tests addresses a clear medical need in prostate cancer screening. The recent acquisition should provide additional growth catalysts as the company expands its test portfolio.

Pitch Summary:
Founded in 1949 in Herzogenaurach, Germany, Adidas was the vision of Adolf "Adi" Dassler, who split from his brother Rudolf (the founder of Puma) to create what would become one of the world's most enduring sports brands. Registered under the now-iconic three stripes trademark, Adidas quickly rose to prominence when West German footballers wore its innovative boots to victory in the 1954 FIFA World Cup, a defining moment that cemented its reputation for high-performance sportswear on the global stage. In the decades since, Adidas has expanded far beyond football boots, entering running, basketball and training categories. Along the way, it has pioneered innovations such as screw-in studs and various cushioning and ultra-lightweight footwear and clothing materials. The brand's visibility at the Olympic Games, World Cups and global running events has deepened its association with sporting excellence. In more recent decades, the blending of sports and lifestyle has broadened the company's addressable market as athletic apparel and footwear have become everyday wear. Adidas was pivotal to the history of "athleisure" wear, introducing the tracksuit to non-athletes all the way back in the 1970s. Today, Adidas is the world's #2 player in athletic footwear and apparel, behind category leader Nike. Despite multiple new entrants across different sporting verticals and niches, these brands continue to dominate sportswear on the global stage and generate annual revenues 5x and 3x larger than the third-largest brand, Puma. While strong economic moats can be difficult to find in competitive consumer categories such as apparel and footwear, we continue to believe the brand equity, marketing reach, R&D capabilities and global distribution networks of the world's two leading sportswear brands provide meaningful and durable advantages. Importantly, Adidas consistently reinvests to defend these competitive advantages, including an annual marketing budget of around €3 billion – or roughly 12% of net sales. These funds support high-profile partnerships with athletes like Lionel Messi and Patrick Mahomes, sporting teams like Real Madrid and Manchester United, and sporting leagues and events like UEFA Champions League and the Paris Olympics, reinforcing brand visibility and consumer loyalty. While Nike's dominance is strongest in North America and basketball, Adidas holds sway in the world's most popular sport, football, where its unrivalled presence at global events like the upcoming FIFA World Cup acts as a showcase for the brand. Adidas also benefits from an enviable vault of iconic product silhouettes that are now cross-generational staples blending sports and fashion. The brand's most recent global success story, the Adidas Originals Samba sneaker, has roots tracing back to the 1950s and was officially launched in its current form in 1972. Execution is critical in the sportswear industry, where consumer tastes shift quickly. Over decades, Adidas has demonstrated resilience and adaptability through challenging periods. In the last five years alone, the company has navigated a global pandemic, geopolitical backlash in China, an exit from Russia and the winding down of its Yeezy collaboration. These external shocks compressed profitability and ultimately resulted in a CEO change. Under new leadership, the business has regained strong momentum across key markets. From an investment perspective, periods of disruption like this, in categories where structural growth tailwinds and economic moat drivers remain intact, can present attractive investment opportunities. Earlier this year, consumer health and tariff fears drove material underperformance of the apparel and sportswear sector, creating an attractive entry point for Adidas in the Magellan Global Opportunities strategy. While remaining conscious of broader industry risks – including consumer health, fashion cycles, geopolitics, social supply chain and environmental challenges – we believe Adidas represents a compelling long-term opportunity: a brand with deep heritage, durable competitive advantages, and the ability to continue turning global sports tailwinds into sustainable growth.

BSD Analysis:
Magellan presents a compelling bull case for Adidas, positioning it as an attractive contrarian opportunity following sector-wide underperformance. The manager emphasizes Adidas's durable competitive moats, including its #2 global market position, substantial €3 billion annual marketing budget (12% of sales), and unrivaled presence in football - the world's most popular sport. The thesis centers on the company's ability to navigate disruption while maintaining structural advantages through brand equity, global distribution networks, and iconic product portfolio including cross-generational staples like the Samba sneaker. Magellan views recent challenges including the Yeezy collaboration exit, geopolitical issues, and CEO transition as temporary headwinds that created an attractive entry point. The fund manager highlights Adidas's demonstrated resilience through multiple external shocks and strong momentum recovery under new leadership. The investment rationale focuses on the structural growth tailwinds in athleisure and the company's ability to capitalize on global sports events like the FIFA World Cup to drive brand visibility and consumer loyalty.

Pitch Summary:
Business Description: Global medical technology manufacturer of devices used in interventional procedures across cardiology, endoscopy, neuromodulation, and urology markets. Thesis: Innovative portfolio in high growth categories drives durable double digit organic revenue growth. Disciplined expense management and smart capital deployment lead to mid-teens EPS growth. Strong pipeline across multiple disease categories offers LT optionality. Q2 Results: Revenue +23% (+17% organic) and EPS +21%. Raised FY25 guidance on strength in WATCHMAN (AFib implant device), EP, and endoscopy. What Happened: Shares advanced +4% post-earnings on accelerating momentum in key segments. Leading into 9/30 investor day, shares declined ~10% on growth and competition concerns. Edgewood's View: We believe the selloff was unwarranted and took advantage to continue building our position. Resulting Action: Edgewood added 100bps during the quarter; 9/30 investor day confirmed double digit + organic revenue growth and margin expansion over the next 3 years.

BSD Analysis:
Edgewood views Boston Scientific as a well-positioned medical technology leader with an innovative device portfolio spanning high-growth interventional markets including cardiology, endoscopy, neuromodulation, and urology. The fund's bullish thesis centers on the company's ability to drive durable double-digit organic revenue growth through its diversified product portfolio and strong pipeline across multiple therapeutic areas. Strong Q2 performance with 23% total revenue growth (17% organic) and 21% EPS growth, plus raised full-year guidance driven by strength in WATCHMAN AFib devices, electrophysiology, and endoscopy, demonstrates operational execution. Despite initial post-earnings strength, pre-investor day concerns about growth sustainability and competitive pressures created a buying opportunity that Edgewood capitalized on. The firm's conviction was validated at the September 30 investor day, which confirmed management's commitment to double-digit organic revenue growth and margin expansion over the next three years. Edgewood added 100 basis points during the quarter, viewing the temporary weakness as an attractive entry point for a company with disciplined capital allocation and significant long-term optionality across its therapeutic pipeline.

Pitch Summary:
Business Description: Global medical technology manufacturer of devices used in interventional procedures across cardiology, endoscopy, neuromodulation, and urology markets. Thesis: Innovative portfolio in high growth categories drives durable double digit organic revenue growth. Disciplined expense management and smart capital deployment lead to mid-teens EPS growth. Strong pipeline across multiple disease categories offers LT optionality. Q2 Results: Revenue +23% (+17% organic) and EPS +21%. Raised FY25 guidance on strength in WATCHMAN (AFib implant device), EP, and endoscopy. What Happened: Shares advanced +4% post-earnings on accelerating momentum in key segments. Leading into 9/30 investor day, shares declined ~10% on growth and competition concerns. Edgewood's View: We believe the selloff was unwarranted and took advantage to continue building our position. Resulting Action: Edgewood added 100bps during the quarter; 9/30 investor day confirmed double digit + organic revenue growth and margin expansion over the next 3 years.

BSD Analysis:
Edgewood maintains a bullish stance on Boston Scientific, viewing the company as a leading medical technology innovator with a diversified portfolio spanning high-growth interventional specialties including cardiology, endoscopy, neuromodulation, and urology. The fund's investment thesis emphasizes BSX's ability to drive durable double-digit organic revenue growth through continuous innovation, while disciplined expense management and strategic capital allocation support mid-teens EPS growth. Strong Q2 results showcased this execution with 23% total revenue growth (17% organic) and 21% EPS growth, driven by particular strength in WATCHMAN AFib devices, electrophysiology, and endoscopy segments. Despite initial post-earnings strength, the stock declined approximately 10% heading into the September investor day on concerns about growth sustainability and competitive pressures. However, Edgewood viewed this selloff as unwarranted and opportunistically increased their position by 100 basis points. The investor day subsequently validated their thesis, with management confirming double-digit organic revenue growth and margin expansion over the next three years. The company's robust pipeline across multiple disease categories provides significant long-term optionality, reinforcing Edgewood's conviction in BSX's growth trajectory within the expanding interventional medical device market.

Pitch Summary:
Business Description: Global leader in robotic-assisted surgical systems, instruments and accessories with its da Vinci and Ion endoluminal platforms. Thesis: ISRG benefits from a large installed base, expanding recurring revenue from instruments, accessories and service, and the growing secular adoption of robotics in surgical applications. Q2 Results: Revenue +21% and EPS +23%. Procedure volumes +17%; raised FY25 GM guidance. Total placements of 395 units missed consensus by one. What Happened: Stock traded down 2% post-earnings and throughout the quarter alongside the broader Healthcare/MedTech market. Edgewood's View: We viewed the broader MedTech selloff as unwarranted. Following diligence in several areas, we felt confident in ISRG's competitive moat and long-term addressable market opportunity. We believe ISRG can compound revenue in the high teens and EPS 20+%. Resulting Action: Edgewood added 100bps to its position in September.

BSD Analysis:
Edgewood maintains strong conviction in Intuitive Surgical's leadership position in robotic-assisted surgery, viewing the company as a beneficiary of secular adoption trends in surgical robotics. The fund's bullish thesis is built on ISRG's substantial installed base of da Vinci systems, which generates expanding recurring revenue streams from instruments, accessories, and service contracts. Strong Q2 fundamentals with 21% revenue growth, 23% EPS growth, and 17% procedure volume growth, plus raised gross margin guidance, reinforce the company's operational momentum. Despite the stock's modest decline alongside broader MedTech weakness, Edgewood views the selloff as unwarranted given ISRG's competitive advantages and large addressable market opportunity. The firm's extensive due diligence across multiple areas reinforced confidence in the company's durable moat and growth prospects. Edgewood expects ISRG to compound revenue in the high teens and EPS at over 20% annually, leading them to add 100 basis points to their position in September as they view current levels as attractive for a dominant franchise with significant runway for expansion.

Pitch Summary:
Business Description: Global leader in robotic-assisted surgical systems, instruments and accessories with its da Vinci and Ion endoluminal platforms. Thesis: ISRG benefits from a large installed base, expanding recurring revenue from instruments, accessories and service, and the growing secular adoption of robotics in surgical applications. Q2 Results: Revenue +21% and EPS +23%. Procedure volumes +17%; raised FY25 GM guidance. Total placements of 395 units missed consensus by one. What Happened: Stock traded down 2% post-earnings and throughout the quarter alongside the broader Healthcare/MedTech market. Edgewood's View: We viewed the broader MedTech selloff as unwarranted. Following diligence in several areas, we felt confident in ISRG's competitive moat and long-term addressable market opportunity. We believe ISRG can compound revenue in the high teens and EPS 20+%. Resulting Action: Edgewood added 100bps to its position in September.

BSD Analysis:
Edgewood maintains a bullish outlook on Intuitive Surgical, viewing the company as the undisputed global leader in robotic-assisted surgery with its da Vinci and Ion platforms. The fund's investment thesis centers on ISRG's substantial installed base generating expanding recurring revenue streams from instruments, accessories, and service contracts, combined with the secular trend toward robotic surgery adoption. Strong Q2 results demonstrated the business model's resilience with 21% revenue growth, 23% EPS growth, and 17% procedure volume increases, while raised gross margin guidance signals operational efficiency improvements. Despite the stock's modest decline alongside broader MedTech weakness, Edgewood views the selloff as unwarranted given ISRG's competitive advantages and massive addressable market opportunity. The manager conducted extensive due diligence across multiple areas, reinforcing confidence in the company's durable competitive moat and growth prospects. Edgewood expects ISRG to compound revenue in the high teens and EPS at over 20% annually, leading them to increase their position by 100 basis points in September, demonstrating strong conviction in the company's long-term trajectory within the expanding robotic surgery market.

Pitch Summary:
Business Description: Leading provider of semiconductor design automation software and IP, enabling chip design, verification, and secure software development across AI, automotive, and hyperscaler markets. Thesis: Mission-critical supplier to the semiconductor and AI ecosystem, with durable double-digit revenue growth driven by rising chip complexity and AI workloads. FYQ3 Results: Revenue +14% ($1.6B) and EPS of $3.39 missed management's guidance. Backlog increased to $8.1B. Management guided F4Q25 EPS below expectations. What Happened: Stock fell 36% after reporting earnings due to weakness in the Design IP segment, BIS export restrictions disrupting China design activity, and challenges at a foundry customer. Edgewood's View: We believe the selloff was overdone and IP issue is narrower than investors fear. Management has taken steps to address, and we believe the IP segment can return to mid-teens growth in FY27, following a transition year in FY26. Resulting Action: Met with management immediately following earnings disappointment. Clarified ambiguous guidance and added 170bps to our position.

BSD Analysis:
Edgewood maintains conviction in Synopsys as a mission-critical supplier to the semiconductor and AI ecosystem, despite the stock's dramatic 36% decline following disappointing earnings. The fund's thesis centers on Synopsys' essential role in enabling chip design and verification as semiconductor complexity increases driven by AI workloads and advanced node requirements. While Q3 results showed 14% revenue growth and an increased $8.1B backlog, weakness in the Design IP segment, China export restrictions, and foundry customer challenges created near-term headwinds. Edgewood believes the market overreacted to what they view as temporary and addressable issues, particularly in the IP segment which management is actively addressing. The firm expects the IP business to return to mid-teens growth by FY27 after a transition year in FY26. Following immediate post-earnings engagement with management to clarify guidance ambiguities, Edgewood significantly increased their position by 170 basis points, demonstrating strong conviction that current weakness represents an attractive entry point for a company with durable double-digit growth prospects.

Pitch Summary:
Business Description: Leading provider of semiconductor design automation software and IP, enabling chip design, verification, and secure software development across AI, automotive, and hyperscaler markets. Thesis: Mission-critical supplier to the semiconductor and AI ecosystem, with durable double-digit revenue growth driven by rising chip complexity and AI workloads. FYQ3 Results: Revenue +14% ($1.6B) and EPS of $3.39 missed management's guidance. Backlog increased to $8.1B. Management guided F4Q25 EPS below expectations. What Happened: Stock fell 36% after reporting earnings due to weakness in the Design IP segment, BIS export restrictions disrupting China design activity, and challenges at a foundry customer. Edgewood's View: We believe the selloff was overdone and IP issue is narrower than investors fear. Management has taken steps to address, and we believe the IP segment can return to mid-teens growth in FY27, following a transition year in FY26. Resulting Action: Met with management immediately following earnings disappointment. Clarified ambiguous guidance and added 170bps to our position.

BSD Analysis:
Edgewood maintains a bullish stance on Synopsys despite the significant 36% stock decline following disappointing earnings results. The fund views Synopsys as a mission-critical supplier to the semiconductor and AI ecosystem, with its design automation software and IP solutions becoming increasingly essential as chip complexity rises and AI workloads proliferate. While Q3 results showed 14% revenue growth, the EPS miss and weak guidance created investor concerns about the Design IP segment, China export restrictions, and foundry customer challenges. However, Edgewood believes the market overreacted to what they characterize as narrower issues than feared. The manager emphasizes that management has implemented corrective measures and expects the IP segment to return to mid-teens growth by FY27 after a transitional FY26. The substantial $8.1 billion backlog provides revenue visibility, and Edgewood's direct engagement with management following the earnings disappointment reinforced their conviction. The fund significantly increased their position by 170 basis points, demonstrating strong belief in the company's long-term prospects within the AI and semiconductor ecosystem.

Pitch Summary:
Business Description: Leading producer (~90% market share) of photolithography machines used in semiconductor manufacturing. ASML's machines enable chips to become smaller and more power efficient every year. Thesis: Secular tailwinds (AI, robotics, cloud, electrification) will continue to drive demand for chips. ASML's EUV & High NA EUV machines continue to be essential equipment and will drive double digit revenue & earnings growth. Q2 Results: Revenue +41% (€7.7B), and EPS +47%. Reiterated FY2025 revenue & EPS guidance. What happened: Stock declined on 2026 revenue growth uncertainty. Edgewood's View: The negative stock reaction had nothing to do with ASML's competitive moat or the size of the market opportunity, rather it was a timing issue related to tariff uncertainty. Over a multi-year period we feel that ASML will compound revenue & earnings at a high teens rate. Resulting Action: Spoke with management. Did additional due diligence on ASML's technology moat. We added 50bps in late July.

BSD Analysis:
Edgewood views ASML as an irreplaceable monopoly in semiconductor lithography equipment, controlling approximately 90% market share in photolithography machines essential for chip manufacturing. The fund's bullish thesis is anchored on powerful secular tailwinds including AI, robotics, cloud computing, and electrification that will drive sustained semiconductor demand growth. ASML's EUV and High NA EUV machines represent mission-critical technology that enables continued chip miniaturization and performance improvements, creating an unassailable competitive moat. Despite strong Q2 results with 41% revenue growth and 47% EPS growth, the stock declined on 2026 revenue uncertainty, which Edgewood attributes to temporary tariff-related timing issues rather than fundamental deterioration. The firm conducted additional due diligence on ASML's technology advantages and engaged directly with management to reinforce their conviction. Edgewood expects ASML to compound revenue and earnings at high-teens rates over multiple years, viewing current weakness as a compelling entry opportunity that warranted a 50 basis point position increase.

Pitch Summary:
Business Description: Leading producer (~90% market share) of photolithography machines used in semiconductor manufacturing. ASML's machines enable chips to become smaller and more power efficient every year. Thesis: Secular tailwinds (AI, robotics, cloud, electrification) will continue to drive demand for chips. ASML's EUV & High NA EUV machines continue to be essential equipment and will drive double digit revenue & earnings growth. Q2 Results: Revenue +41% (€7.7B), and EPS +47%. Reiterated FY2025 revenue & EPS guidance. What happened: Stock declined on 2026 revenue growth uncertainty. Edgewood's View: The negative stock reaction had nothing to do with ASML's competitive moat or the size of the market opportunity, rather it was a timing issue related to tariff uncertainty. Over a multi-year period we feel that ASML will compound revenue & earnings at a high teens rate. Resulting Action: Spoke with management. Did additional due diligence on ASML's technology moat. We added 50bps in late July.

BSD Analysis:
Edgewood maintains a bullish outlook on ASML, recognizing the company's near-monopolistic position with approximately 90% market share in advanced photolithography equipment essential for semiconductor manufacturing. The fund's investment thesis is anchored on powerful secular tailwinds including AI, robotics, cloud computing, and electrification that continue driving insatiable demand for more advanced chips. ASML's EUV and High NA EUV machines represent mission-critical infrastructure enabling the semiconductor industry's continued miniaturization and performance improvements. Despite strong Q2 results showing 41% revenue growth and 47% EPS growth, the stock declined on 2026 revenue uncertainty, which Edgewood views as a temporary timing issue related to tariff concerns rather than fundamental competitive threats. The manager emphasizes that ASML's technological moat and massive market opportunity remain intact, with confidence in high-teens revenue and earnings compounding over multiple years. Following additional management discussions and technology due diligence, Edgewood added 50 basis points to their position, demonstrating conviction in the company's long-term prospects.

Pitch Summary:
Business Description: Leading provider of consumer credit analytics and scoring algorithms that is best known for the "FICO Score"—a three-digit metric used in a variety of consumer credit decisions. Thesis: FICO is the industry standard, used in 90%+ of consumer credit decisions across the US. There is an opportunity to proliferate scores beyond originations and close the Scores' price to value gap, specifically in mortgage and auto. FYQ3 Results: Revenue +20% and EPS +47%. Raised full year EPS. What Happened: Stock declined after FHFA Director Bill Pulte posted on X that government-sponsored enterprises (GSEs) could use an alternate score, creating headline risk around FICO's mortgage score moat and 2026 pricing. Edgewood's View: The market overestimated share-loss and pricing risk; we viewed management as having flexibility in how they wanted to approach Scores monetization and felt confident in the 20%+ multi-year EPS growth algorithm. Resulting Action: Added to the position throughout the quarter (250bps in total), with additions in the post Q3 earnings sell-off after numerous meetings with senior FICO management.

BSD Analysis:
Edgewood maintains strong conviction in FICO's dominant market position as the industry standard for consumer credit scoring, used in over 90% of US credit decisions. The fund's investment thesis focuses on FICO's entrenched competitive moat and significant opportunities to expand score usage beyond traditional originations into mortgage and auto sectors, which could close the substantial price-to-value gap. Despite regulatory headline risk from FHFA Director comments about alternative scoring models for government-sponsored enterprises, Edgewood believes the market dramatically overestimated both market share loss and pricing pressure risks. The firm's confidence stems from strong fundamentals, including 20% revenue growth and 47% EPS growth in Q3, plus raised full-year guidance. Management's flexibility in monetization strategies and FICO's deeply embedded infrastructure support Edgewood's conviction in a 20%+ multi-year EPS growth trajectory. The fund significantly increased its position by 250 basis points throughout the quarter, demonstrating high conviction despite short-term volatility.

Pitch Summary:
Business Description: Leading provider of consumer credit analytics and scoring algorithms that is best known for the "FICO Score"—a three-digit metric used in a variety of consumer credit decisions. Thesis: FICO is the industry standard, used in 90%+ of consumer credit decisions across the US. There is an opportunity to proliferate scores beyond originations and close the Scores' price to value gap, specifically in mortgage and auto. FYQ3 Results: Revenue +20% and EPS +47%. Raised full year EPS. What Happened: Stock declined after FHFA Director Bill Pulte posted on X that government-sponsored enterprises (GSEs) could use an alternate score, creating headline risk around FICO's mortgage score moat and 2026 pricing. Edgewood's View: The market overestimated share-loss and pricing risk; we viewed management as having flexibility in how they wanted to approach Scores monetization and felt confident in the 20%+ multi-year EPS growth algorithm. Resulting Action: Added to the position throughout the quarter (250bps in total), with additions in the post Q3 earnings sell-off after numerous meetings with senior FICO management.

BSD Analysis:
Edgewood maintains strong conviction in Fair Isaac Corporation, viewing the company as the entrenched industry standard in consumer credit scoring with its FICO Score used in over 90% of US credit decisions. The fund's investment thesis focuses on FICO's dominant market position and the significant opportunity to expand score usage beyond loan originations into mortgage and auto sectors, potentially closing the substantial price-to-value gap. Despite regulatory headline risk from FHFA Director comments about alternative scoring models for government-sponsored enterprises, Edgewood believes the market dramatically overestimated both market share loss and pricing pressure risks. The manager emphasizes management's strategic flexibility in monetizing their Scores business and maintains confidence in the company's ability to deliver over 20% multi-year EPS growth. Strong quarterly results showing 20% revenue growth and 47% EPS growth, along with raised full-year guidance, reinforce their bullish outlook. Edgewood significantly increased their position by 250 basis points throughout the quarter, demonstrating high conviction following extensive management discussions.

Pitch Summary:
Business Description: Global pharmaceutical company with a leading position in diabetes/obesity and a rich pipeline of follow-on medicines addressing several therapeutic categories. Thesis: Lilly is a leader in diabetes and obesity markets which represent large global patient populations and today remain largely underserved. Excellent management team with a long-term focus on deploying capital towards R&D/serial innovation in therapeutic categories with large unmet needs. Q2 Results: Revenue +38% and EPS +61%. Raised FY 2025 revenue and EPS guidance. What Happened: Stock declined on results from P3 ATTAIN-1 trial – orforglipron (Lilly's oral GLP-1 molecule) delivered 12.4% weight loss at the highest dose – expectations were 13-15% weight loss. Edgewood's View: The market was too narrowly focused on one metric from one trial, demographics impacted results and the totality of data from 5 clinical trials would support approval. After a ~15% price decline, Lilly traded at ~20x 2026 EPS for a company that we believe can compound EPS >20% over the next 5 years. Resulting Action: After research meeting with senior management at LLY HQ, Edgewood added 100bps to our position in August.

BSD Analysis:
Edgewood maintains a bullish stance on Eli Lilly, viewing the company as a dominant player in the massive diabetes and obesity markets that remain significantly underserved globally. The fund's thesis centers on Lilly's leadership position in GLP-1 therapies and its robust pipeline addressing multiple therapeutic areas with substantial unmet medical needs. Despite the stock's decline following disappointing weight loss results from the ATTAIN-1 trial for orforglipron (12.4% vs. expected 13-15%), Edgewood believes the market overreacted to a single data point. The firm emphasizes that management has a proven track record of capital allocation toward R&D and serial innovation, positioning the company for sustained growth. With strong Q2 results showing 38% revenue growth and 61% EPS growth, plus raised full-year guidance, Edgewood sees compelling value at ~20x 2026 EPS for a company expected to compound earnings at over 20% annually. The fund's conviction led them to add 100 basis points to their position following direct engagement with senior management.