Investment Pitches

Pitch Summary:
Lifecore Biomedical Inc. (LFCR) – Lifecore, our fill-finish CDMO, continues to work toward their dual goals of increasing capacity utilization and expanding margins. I continue to believe that achieving these goals is very much a “when” rather than an “if.” This belief was founded on global supply and demand dynamics, strengthened by the BIOSECURE Act, and reinforced by the National Security Commission delivering a report and action plan to Congress, which calls for the re-shoring of the biotech supply chain. To top it off, Trump has recently stated that pharmaceuticals manufactured abroad will be subject to 200% tariffs. Considering that building and certifying new fill-finish capacity can take 4 or 5 years, it seems that it would be much easier to partner with a company like Lifecore. The sales cycle here is slow, but all indications are that the pipeline is active, and major international pharma and biotech companies have been conducting diligence on Lifecore’s facilities. Shares continue to trade well below where frequent industry M&A has taken place, and as the last public domestic CDMO of any size, I believe LFCR will eventually be acquired. ~6x revenue would be a reasonable multiple based on past transactions, suggesting a price of more than $13 per share today, and closer to $16 on 2026 numbers.

BSD Analysis:
Lifecore is trying to go from “interesting CDMO niche” to “go-to partner for complex injectables,” and the recent big-pharma manufacturing wins suggest that pivot is working. The company’s hyaluronic-acid history gives it deep formulation expertise that it can parlay into broader sterile-injectable work. Fill-finish capacity remains scarce industry-wide, which puts decent pricing power in Lifecore’s hands if it executes flawlessly. The wild card is always capital structure and governance, both of which have been messy enough to scare off more conservative investors. That overhang is also where the opportunity lives—if the operations keep delivering, the financials can be cleaned up later. This is not the safest CDMO to own, but it might be one of the more mispriced if the current contracts ramp the way management suggests.

Pitch Summary:
SECURE Waste Infrastructure Corp (SES.TO) – SECURE is primarily a waste management business catering to the needs of Western Canada’s oil industry. You will find a longer more detailed writeup of SECURE in the appendix to this letter. The short version is that SECURE was formerly an oil services business characterized by extreme cyclicality, and in fact only changed its name from SECURE Energy Services to SECURE Waste Infrastructure earlier this year. However, today ~80% of cash flows are recurring in nature, while previously 60% of cash flows were highly cyclical. Additionally, in my view the company’s accounting is completely misleading, and hides the fact that following certain common-sense adjustments, economic EBITDA margins are north of 30% while mechanical screeners would tell you that EBITDA margins are closer to 4%. This explains why shares remain cheap, and a recent forced sale of comparable assets provides a valuation floor at multiples that are higher than the prices we paid for our shares, and confirms that they are indeed cheap. Further evidence of downside protection comes from a recent tender offer that was undersubscribed, suggesting that the supply of sellers near current prices is limited. At the same time, management is properly incentivized to be buyers of their own stock, and they are doing exactly that, having repurchased 19% of shares in 2024, and continuing to aggressively repurchase shares this year. With stable and predictable cash flows and an under-levered balance sheet, I expect this pattern of shrinking the float to continue for the foreseeable future, which by itself suggests that an equity CAGR in the low 20% range in the years to come is possible even absent multiple expansion. However, given that the starting valuation is in line with that of a forced sale, multiple expansion is likely. There is quite a bit of path dependency here, but assuming SECURE’s multiple does re-rate closer to other waste industry peers over the next few years, an equity CAGR of 30 to 40% is possible.

BSD Analysis:
SECURE is in the unsexy but essential business of handling industrial waste and fluids for resource-heavy industries, turning regulatory headaches into recurring revenue. Its network of landfills, treatment plants, and pipelines forms a moat that’s more about zoning and permits than brand. As ESG pressure rises, “just dump it cheaply” stops being an option, which structurally favors players like SECURE who can offer compliant, integrated solutions. The company has spent the past few years de-energizing its balance sheet and focusing squarely on waste and infrastructure instead of broader oilfield services. That repositioning gives it a cleaner narrative: infrastructure-like volumes with operating leverage when activity is high. Commodity cycles matter, but far less than a decade ago. You’re buying a real asset base at a valuation that still remembers the old business mix.

Pitch Summary:
Clarus Corp. (CLAR) – Clarus is a consumer products business focused on outdoor adventure gear. Their Outdoor segment is best known for Black Diamond climbing gear, and their Adventure segment is best known for Rhino-Rack roof racks. Clarus is subscale and undergoing a reset after expanding their SKU count a bit too much. The lack of scale and previous lack of focus leads to GAAP financials that are not pretty; the company struggles with profitability. However, looking past what the quants can see, in my view the company has real brand value. Reviewing precedent transactions suggests that outdoor adventure brands trade hands at 1-2x sales, yet Clarus is valued by the market at less than 0.4x sales. By itself this smells like a value trap, but when you consider the alignment and interests of largest shareholder and Chairman Warren Kanders, the picture begins to change. Kanders owns ~18% of the shares at present, has recently bought shares in the open market, and also owns a series of options on 1,000,000 more shares that will only vest if shares trade at greater than $15, $18, or $50 by 2033. Kanders has a long history of value creation, and while thus far his tenure at Clarus has not mirrored his other successes, he is unlikely to sit still. The most recent evidence of this was the May announcement that Clarus would be selling PIEPS, a small subsidiary focused on snow safety, for 1.7x sales and effectively an infinite multiple of EBITDA. It is not exactly clear what will happen next with Clarus, but with plenty of cash on the balance sheet, no real debt, a motivated and experienced operator at the helm, and a totally bombed out valuation, there are multiple ways for us to win. If I had to guess, I would say that over the next 6 to 18 months or so the company will continue to rationalize its operations, and then run a sale process for its remaining assets. Assuming the mid-point of the historic range, shares would be worth around $11.00 gross of any taxes (which are likely to be limited) in an out-right sale of the company. However, given Kanders’s options, it is also possible the assets are sold while the entity survives. In this case, I would think that shares would price in some discount to the cash on the balance sheet while Kanders finds some other way to deploy the cash. In both cases, I believe shares are worth more than double today’s prices.

BSD Analysis:
Clarus is what happens when you bundle a bunch of hardcore outdoor brands under one corporate roof and try to squeeze public-company returns out of them. The growth algorithm is straightforward: keep the gear credible for core users, then carefully broaden into lifestyle without trashing the brand. When that balance works, you get high-margin, high-loyalty revenue that shrugs off fast-fashion cycles. When it doesn’t, you’re stuck with inventory and confused messaging. The stock reflects that history of fits and starts, which is why modest operational improvements can move it a lot. If management sticks to its knitting—gear for people who actually climb and ski things, not just Instagram them—the story gets cleaner. This is an execution test more than a branding test now.

Pitch Summary:
One of the new investments we made this year is in Polaris (PII), a manufacturer of powersports vehicles, including: Side-by-sides, ATVs, snowmobiles (Off-Road Segment), motorcycles (On-Road Segment), and boats (Marine Segment). Side-by-sides—Rangers and Razors—look like mini-trucks and dune buggy type vehicles, respectively. For guys who invest in energy primarily and airlines secondarily, it may seem odd we’ve now invested in a consumer discretionary stock. The truth is we’re closet generalist investors at heart and just love the expansive treasure hunt and enduring poker game, which opportunities like this help satiate. But we’re industry-focused practitioners, so any investment touching the outside edge of our circle of competence—which Polaris is—will be small, i.e., much less than a 10% position at our purchase price.

To be clear, I’ve done this in the fund before. Back in 2018, I invested in Brands (Victoria’s Secret). We previously owned it in the mutual fund I worked on at Janus and between my departure and the founding of this Partnership the stock proceeded to drop like a rock. I just couldn’t help myself, so I bought a little. However, I quickly learned I really knew next to nothing about retail businesses and sold the stock at a small loss. That was this Partnership’s last foray away from energy and airlines until now.

But rest assured, Polaris is not Victoria’s Secret. First off, Polaris is a manufacturer that sells through a large network of independently owned dealerships; it’s not a retailer. Second, as guys who have been married a long-time, and who love to hunt big game in Colorado, we interact with Polaris products significantly more than VS products these days, sadly enough, so we have a much better handle on the brand. Lastly, I still own a small Polaris dealership in rural Wyoming, and through that experience I can attest to the fact that the core money-making Polaris products in the off-road segment are essential to farmers, ranchers, and fellow outdoorsmen. Polaris is the brand and technology leader in the segment, and we think the ORV business alone is worth more than the entirety of all their businesses as currently valued by the market.

However, despite the cyclical factors that are currently weighing on company fundamentals, in our opinion management’s uninspiring capital allocation decisions over the past decade prevent full realization of intrinsic value, no matter the economic backdrop. Initially I thought we were getting the opportunity to buy a really good company at a bargain just due to normal cyclicality but magnified by tariff noise, and I thought shares were worth around $100 exiting the cyclical trough, but my perspective changed as I learned more. Subsequently, I think no more thoughtful approach to capital allocation is implemented the stock could be worth up to $200 over the next few years. Therefore, the risk/reward appears favorable under either scenario based on the Partnership’s $41 average purchase price. Shares currently trade at $47 but were below $31 in April, a 15-year low despite 17% fewer shares outstanding! Our goal here is to simply shed some light on what’s gone wrong by stepping back and making big picture observations in the hope management considers an alternative path, or to inspire a better funded and more actively inclined investor to get involved and help press the case.
For guys who invest in energy primarily and airlines secondarily, it may seem odd we’ve now invested in a consumer discretionary stock. The truth is we’re closet generalist investors at heart and just love the expansive treasure hunt and ensuing poker game, which opportunities like this help satiate. But we’re industry-focused practitioners, so any investment touching the outside edge of our circle of competence—which Polaris is—will be small, i.e., much less than a 10% position at our purchase price.
To be clear I’ve done this in the fund before. Back in 2018, I invested in L Brands (Victoria’s Secret). We previously owned it in the mutual fund I worked on at Janus and between my departure and the founding of this Partnership the stock proceeded to drop like a rock. I just couldn’t help myself, so I bought a little. However, I quickly learned I really knew next to nothing about retail businesses and sold the stock at a small loss. That was this Partnership’s last foray away from energy and airlines until now.
But rest assured, Polaris is not Victoria’s Secret. First off, Polaris is a manufacturer that sells through a large network of independently owned dealerships; it’s not a retailer. Second, as guys who have been married a long-time, and who love to hunt big game in Colorado, we interact with Polaris products significantly more than VS products these days, sadly enough, so we have a much better handle on the brand. Lastly, I still own a small Polaris dealership in rural Wyoming, and through that experience I can attest to the fact that the core money making Polaris products in the Off-Road segment are essential to farmers, ranchers, and fellow outdoorsmen. Polaris is the brand and technology leader in the segment, and we think the ORV business alone is worth more than the entirety of all their businesses as currently valued by the market.
However, despite the cyclical factors that are currently weighing on company fundamentals, in our opinion management’s uninspiring capital allocation decisions over the past decade prevent full realization of intrinsic value, no matter the economic backdrop. Initially I thought we were getting the opportunity to buy a really good company at a bargain just due to normal cyclicality but magnified by tariff noise, and I thought shares were worth around $100 exiting the cyclical trough, but my perspective changed as I learned more. Subsequently, I think if a more thoughtful approach to capital allocation is implemented the stock could be worth up to $200 over the next few years. Therefore, the risk/reward appears favorable under either scenario based on the Partnership’s $41 average purchase price. Shares currently trade at $47 but were below $31 in April; a 15-year low despite 17% fewer shares outstanding! Our goal here is to simply shed some light on what’s gone wrong by stepping back and making big picture observations in the hope management considers an alternative path, or to inspire a better funded and more actively inclined investor to get involved and help press the case.
Observation 1: The Crown Jewel of the Business Hasn’t Changed
In 2014, Polaris was an $11 Billion enterprise, 99% of which was equity value. Today it’s a $4.4 Billion enterprise, only 59% of which is equity value. Yet the company work horse where it pertains to generating revenue, gross profit, cash flow and returns hasn’t changed much.
The Off-Road Vehicle (ORV) segment (Rangers, Razors, Snowmobiles) made $1.2 Billion in Gross Profit in 2014 (91% of overall GP) and made $1.16 Billion in 2024 (79% of overall GP). Apart from the 2-year spike in sales for all things outdoor related coming out of COVID, the business has been relatively steady and profitable.
By all accounts, including estimates made by their 2nd largest competitor (BRP), Polaris has the #1 market share in ORV, and is close to an overall market share equal to the #2 & #3 competitors combined. The brand is strong and through a continued focus on product quality and innovation they should be able to maintain that lead, if not grow it.
Not only is this segment keeping the business afloat during the current powersports recession, but it’s also responsible for meeting broader corporate goals on the other side of it. When asked in March what it will take to hit management’s mid-cycle margin targets, the CFO said: ‘Off Road is down less, but it’s also far and away our most profitable segment. So any recovery in Off Road dwarfs any benefit we can get from motorcycles or snow…So, the driver of those mid-cycle margins is going to be primarily recovery in ORV.’
What happened to this business that was once valued at $11 Billion, sold for $159 a share, generated 67%+ returns on capital and traded at 23x earnings? Growth. Or the pursuit of it at least.

BSD Analysis:
Polaris is the king of powersports — ATVs, snowmobiles, motorcycles — serving a loyal consumer base that treats recreation like religion. The company’s brand power, dealer network, and engineering lead give it strong pricing ability. Cyclicality is real, but Polaris has managed its product mix and cost structure well through multiple macro swings. Electrification offers a long-term tailwind, though adoption will be slow in off-road categories. Margins remain solid, and inventory discipline keeps the business healthy. Polaris isn’t a growth rocket, but it’s an elite operator in a niche with passionate customers. When the outdoor cycle turns up, Polaris wins big.

Pitch Summary:
Technology slotted four names into the top 10 contributors to return and six sectors were represented overall. StoneX Group (SNEX) topped the leaders, generating record operating revenues, net income, and earnings per share growth. It also strengthened its competitive position by acquiring R.J. O'Brien.

BSD Analysis:
StoneX is a deeply undervalued, diversified financial services titan whose value is structurally locked in the high-margin, non-cyclical nature of its institutional trading and clearing services. The core thesis is a massive valuation arbitrage fueled by the successful integration and operational leverage of its recent acquisitions, creating an "all-weather" financial ecosystem. The company's unassailable moat is its massive, interconnected global payments network and its dominance in physical commodities trading and clearing, which are essential services in volatile markets. Management is successfully converting complexity into earnings, delivering strong Adjusted Net Income growth. The stock is a conviction bet on the long-term, compounding value of a firm that operates as a secure intermediary for global financial transactions across multiple asset classes.

Pitch Summary:
Our third-largest contributor to returns in the quarter came from Nippon Antenna (6930.T). At a $49 million market capitalization, Nippon Antenna builds antennas used for television reception, internet, and communication devices. They also make antennas and parts for things like mobile phones, marine (boat) communication, and even some security equipment. In addition, they make other equipment that helps get TV signals, connect to cable or satellite TV, and support wireless communication. They have a small service revenue segment that includes the installation and engineering of communication systems, including projects for cable TV and other networks. This holding presents a bit of a special situation, in that it’s what I like to call “double-dipping.” We originally bought this stock in 2018, sold our entire holdings in 2019 for a healthy profit, and bought the stock again at the end of last year at depressed levels. In social situations, no one likes a “double-dipper” when it involves dipping a partially consumed chip in a shared bowl. But when it comes to double-dipping the same stock, count me as for it. All joking aside, it does highlight an important part of our strategy. The effectiveness of our strategy is not necessarily in the consistent turnover of holdings. We will rarely, if ever, hold a stock for an indefinite period. I believe we will get better returns if we persistently rebalance our gains from our holdings into other undervalued securities, rather than attempt to hold the same stocks for a considerable length of time. That type of buy-and-hold strategy can be very effective and rewarding, but it would involve a complete refit of the process, as we would be looking for an entirely different subset of companies. Plus, I enjoy double-dipping too much! We bought shares in Nippon Antenna in December of last year, at an average cost of ¥541 per share, following disappointing results in 2024 when the company posted a net loss of $20 million (USD). However, in their September reporting period that was disseminated in November, the company was showing better operational efficiency, and ongoing losses had been reduced substantially. The balance sheet was overcapitalized with $48 million (USD) in cash and deposits. If the company could turn things around, the stock should do well, and the downside is well protected, in my opinion. In the latest fiscal year ending March 2025, Nippon Antenna reported a net profit of $25 million (USD), a sharp turnaround from the previous year, due to better cost controls and a significant reduction in their cost of goods sold. The stock currently trades around ¥784 per share.

BSD Analysis:
Nippon Antenna operates in the antenna and RF component space, where demand is shaped by device cycles, broadcast standards, and connectivity upgrades. The business can be cyclical and competitive, but strong engineering and customer relationships can create sticky niches. The investment case depends on whether Nippon has exposure to growth vectors like automotive connectivity, IoT modules, or next-gen wireless infrastructure. If it’s tied heavily to legacy broadcast or commoditized consumer devices, the market will keep a low multiple on it. Cost control and product mix are crucial because small margin changes swing profitability. The upside is meaningful if the company wins design-ins in longer-cycle industrial or automotive programs. The downside is persistent pricing pressure if it remains stuck in commoditized segments.

Pitch Summary:
Yutaka Giken Co. Ltd. (7229.T) was the second largest contributor to returns in the quarter, adding 1.5% to total contribution. Yutaka Giken is a Japanese company that makes car and motorcycle parts for big car companies, particularly Honda and Suzuki, as well as other vehicle makers both in Japan and internationally. They manufacture key components used in cars and motorcycles, including parts that help cars shift gears smoothly (torque converters and other drive system parts), parts that reduce pollution from engines (catalytic converters and exhaust systems), and brake discs for motorcycles, among other general car and machine parts. At $264 million (USD), Yutaka Giken’s market capitalization is on the higher end of purchases made in the fund. This is not an indication of anything; however, all else being equal, I would choose a company with a higher market cap versus a smaller market cap. With that said, I typically find more compelling opportunities in companies that trade below $100 million (USD) market capitalization.
We made our first purchase in the stock in September of last year, as the company was trading below liquidation value and was showing strong fundamental momentum in its operations. This combination of factors, a cheap stock price with improving operations, is something I am consistently on the lookout for. We added to our position in October and again in January as its financial results continued to be strong. Earlier this month, we exited our entire position at an average sale price of ¥2,589 per share – a material gain over our average cost of approximately ¥1,940 per share. The sale was completed to free up capital to pursue what I perceive to be better opportunities.

BSD Analysis:
Yutaka Giken is an auto parts supplier, which means the big questions are customer concentration, platform cycles, and how it navigates electrification. Suppliers win when they’re designed into long-lived models and can defend margins through manufacturing efficiency and quality. The risk is that EV architectures can reduce demand for certain legacy components, forcing suppliers to pivot or shrink. If Yutaka has content in exhaust, powertrain, or other ICE-heavy systems, the market may discount it even if cash flows are still healthy near term. The opportunity is winning content in hybrid/EV adjacent systems and leveraging relationships with major OEMs to transition the mix. Japanese suppliers often trade cheap due to governance and growth skepticism, creating value pockets. This is a “transition execution” story more than a pure growth story.

Pitch Summary:
Goosehead Insurance, Inc. (GSHD) also detracted. Through its network of franchisees and corporate agents, Goosehead brokers insurance products from a wide range of carriers. Fundamentals for the business remain robust, but after a strong run by the stock over the past year, it gave back some ground this quarter. Looking ahead, we continue to like Goosehead for its innovative business model, which leverages technology to manage a variety of customer-service and back-office functions, allowing its brokers to focus primarily on sales.

BSD Analysis:
Goosehead Insurance is a high-growth, disruptive insurance brokerage pure-play whose stock is a conviction bet on its innovative, franchisee-driven distribution model. The core moat is its superior technology platform and centralized service model, which allows its franchisees to focus solely on high-value client acquisition. This asset-light, SaaS-like model drives superior revenue growth and profitability. The company is aggressively expanding its franchise footprint, which is rapidly increasing the share of higher-margin renewal commissions. Goosehead is a high-quality compounder whose value is secured by its technological advantage and its leveraged growth through its franchise network.

Pitch Summary:
HealthEquity, Inc. (HQY) also contributed. The company is the largest U.S. non-bank custodian for health savings accounts (HSAs). HealthEquity’s stock rebounded after having lost ground in late March and April. At that time, management said it faced higher service costs as it sought to prevent fraud and cybersecurity threats. Like other financial firms, HealthEquity has experienced an increase in such threats. But after speaking with management, we felt the steps they’ve been taking to address fraud and cyber threats are sensible. We’ve also been pleased to see the strength of HealthEquity’s underlying business trends.

BSD Analysis:
HealthEquity is a high-growth, specialized fintech pure-play whose stock is a conviction bet on the structural growth of Health Savings Accounts (HSAs). The core moat is its dominance as a custodian for HSAs and its SaaS-driven platform for managing consumer-directed benefits. The company generates high-margin, recurring revenue from custodial fees, interchange revenue, and service fees. The stock is a high-quality compounder whose growth is secured by the non-cyclical trend toward high-deductible health plans and the increasing amount of assets flowing into HSAs.

Pitch Summary:
Another contributor was Guidewire Software, Inc. (GWRE), an enterprise software provider for the property and casualty insurance industry. Guidewire has continued to benefit as insurance companies have increasingly replaced their core (usually on-premises) legacy software with centralized, cloud-based offerings. We’ve been impressed with how Guidewire’s technology suite is gaining traction among insurers.

BSD Analysis:
Guidewire Software is a high-growth, specialized SaaS pure-play whose stock is a conviction bet on its dominance in the Property and Casualty (P&C) insurance core system market. The core moat is its market leadership in providing mission-critical core systems (PolicyCenter, ClaimCenter) that manage the entire insurance lifecycle. The company is successfully executing the cloud transition of its customer base, driving a superior, high-margin subscription annuity. Guidewire is a high-quality compounder, leveraging the high switching costs of its software to capture increasing revenue from the non-cyclical, multi-trillion-dollar P&C market.

Pitch Summary:
Inspire Medical Systems, Inc. (INSP) also detracted. The company develops minimally invasive solutions for patients with obstructive sleep apnea (OSA). The second quarter saw the long-awaited launch of Inspire V, the company’s new device that greatly simplifies the medical installation procedure. The stock likely sold off because medical professionals will need to work through their inventory of Inspire IV prior to adopting the new product. Inspire V extends the company’s lead in the OSA space and should result in higher volume across its install base in the second half the year.

BSD Analysis:
Inspire Medical Systems is a high-growth, monopolistic MedTech pure-play whose stock is a conviction bet on the structural shift to non-CPAP treatments for obstructive sleep apnea (OSA). The core moat is its FDA-approved Inspire mathbftherapy} system, which is the undisputed market leader in upper airway stimulation. The company is aggressively capturing market share, with Adjusted EBITDA mathbfmargin} expected to hit 7%-10%. The stock is a high-quality compounder whose growth is secured by its technological dominance and the massive, underserved OSA market.

Pitch Summary:
Another detractor was National Storage Affiliates Trust (NSA), a real-estate investment trust that owns and operates self-storage facilities. The outlook of higher-for-longer interest rates likely weighed on the stock. For National Storage, higher rates reduce home sales, which in turn reduces the need for storage space. However, we remain confident in the company’s long-term outlook and maintained our position. We like National Storage for several reasons: Its market is large and growing. The company also has opportunities to acquire smaller competitors. Additionally, we’re impressed with National Storage’s management team, which we’ve known for many years.

BSD Analysis:
National Storage Affiliates Trust (NSA) is a high-quality, high-yield self-storage REIT whose stock is a conviction bet on the non-cyclical, stable demand for storage space. The core moat is its massive, diversified portfolio of self-storage properties, which benefit from low operating costs and superior pricing power. The company utilizes a unique "PRO" (Participating Regional Operators) structure, which aligns management interests with shareholders and drives disciplined external growth. The stock is a defensive compounder, leveraging its operating model and non-cyclical demand to deliver superior, recurring dividend income.

Pitch Summary:
Among our long positions, the largest detractor from Fund performance was Champion Homes, Inc. (SKY). The company is one of the largest homebuilders in North America, specializing in modular homes for the single-family, multi-family and hospitality segments. Champion’s stock was down after company management reported weaker than expected quarterly operating results. High interest rates make home payments more expensive, so some of Champion’s customers are offsetting that expense by opting out of some of the higher-grade amenities within modular houses. This is a headwind for Champion’s earnings because those amenities tend to improve margins for the company. The short-term results haven’t changed our view of the company. In an environment where homebuilders face significant challenges, we were pleased to see Champion increase revenue 10.7% in its most recent quarter over the same period a year ago.

BSD Analysis:
Champion Homes is a high-growth, factory-built housing specialist whose stock is a conviction bet on the structural shift toward affordable housing solutions. The core thesis is driven by the massive affordability crisis in the U.S., which makes its manufactured, modular, and park model homes an increasingly non-discretionary alternative to site-built homes. The company's superior scale and efficient factory model allow it to deliver high-quality, energy-efficient housing at a 20%–50% lower cost than traditional builders. The stock is a high-conviction play on the long-term, non-cyclical demand for affordable single-family housing.

Pitch Summary:
Grid Dynamics Holdings, Inc. (GDYN) offers information-technology (IT) services including technical consulting, digital transformation, internet services operations and software development. The industry has experienced pressure as clients become more cautious about spending against an uncertain macroeconomic backdrop. In addition, sentiment around the broader IT outsourcing space has been challenged as investors digest the risks and opportunities presented by generative Al. While the company's fundamentals appear intact, we are actively working to understand the implications of Al for Weave's business model.

BSD Analysis:
Grid Dynamics is a high-growth, specialized digital transformation services pure-play whose stock is a conviction bet on the accelerating corporate need for AI and data modernization. The core moat is its deep expertise in cloud, AI, and data science, which allows it to secure high-value contracts with Fortune 1000 clients. The company is demonstrating superior financial performance, with revenue hitting $292 million in 2025, driven by strong client relationships and deep technical capabilities. The stock is a high-quality compounder, leveraging its technological specialization to capture non-cyclical IT spend for large-scale digital programs.

Pitch Summary:
Agilysys, Inc. (AGYS), a provider of property management and point-of-sale software for the hospitality industry, saw its stock rebound after it dipped in the prior quarter on disappointing results. We met with the CEO to try to better understand the company's challenges and came away convinced that the market had overreacted to short-term execution issues in migrating customers to a new product platform and to timing delays caused by a holiday. We took the opportunity to add to our holdings of a high-quality company and were rewarded as Agilysys posted strong earnings in the most recent quarter. We view the company as well positioned to continue to take market share going forward.

BSD Analysis:
Agilysys is a high-growth, specialized hospitality software pure-play whose stock is a conviction bet on the accelerating enterprise shift to cloud-native SaaS systems. The core moat is its dominance in providing mission-critical Property Management Systems (PMS), POS, and F&B solutions to high-value resorts, casinos, and luxury hotels. The company is successfully transitioning its customer base to its high-margin SaaS platform, evidenced by Subscription revenue growth of 26.8%. Agilysys is a high-quality compounder leveraging its specialization to dominate the digitization of the non-cyclical, high-end hospitality market.

Pitch Summary:
Construction Partners, Inc. (ROAD), a contractor for roads and other large infrastructure projects, posted significant earnings in the quarter. The company's results have benefited from increased spending by state and local governments on infrastructure in recent years. More broadly, the company's management has engaged in acquisitions that are accretive to earnings and that broaden the company's economies of scale while expanding the company's regional footprint beyond southeastern America.

BSD Analysis:
Construction Partners is a high-growth, infrastructure services consolidator whose stock is a conviction bet on the multi-year, non-cyclical road maintenance and highway construction supercycle. The core moat is its geographic dominance in the high-growth Southeastern U.S. and its vertical integration (owning its asphalt plants). The company is aggressively executing a disciplined M&A strategy to consolidate the fragmented market, driving superior revenue growth and operating leverage. The stock is a leveraged play on the massive, non-discretionary federal and state spending on road infrastructure (Infrastructure Investment and Jobs Act).

Pitch Summary:
Leading individual contributors included Limbach Holdings, Inc. (LMB), a building-systems company providing HVAC, mechanical, electrical and plumbing services. Under a new management team, Limbach has shifted its business mix away from servicing general contractors and toward the higher margin and more stable owner-direct channel, which now accounts for more than two-thirds of its revenue. After meeting with the new CEO, we assessed that the market had failed to fully appreciate the impact of this strategic shift, which has resulted in Limbach being a much higher-quality company.

BSD Analysis:
Limbach Holdings is a high-growth, specialized mechanical HVAC services pure-play whose stock is a conviction bet on the accelerating demand for energy-efficient commercial building maintenance. The core thesis is driven by the successful pivot of its revenue mix toward high-margin, recurring Owner-Direct work. This strategic shift focuses on long-term service contracts directly with building owners, ensuring stable, high-retention revenue. The company is converting this model into superior profitability, with Q3 2025 mathbfAdjusted} EBITDA mathbfrising} 83% to $16.5 million. Limbach is a high-quality compounder leveraging its specialized expertise to dominate the non-cyclical, high-margin MRO segment of commercial real estate.

Pitch Summary:
We initiated a new position in Quanta Services, Inc. (PWR) which is a leading provider of infrastructure solutions for utility, power, technology, manufacturing, and communications customers. With 81% of revenue generated by Electric Infrastructure solutions and the remaining 19% tied to the Underground Utility segment, PWR is one of the largest contractors serving the transmission and distribution sector of the North American electric utility industry. As investors retreated from some market segments earlier this year, PWR pulled back to levels where we saw an opportunity to establish a position in this proven market leader.

BSD Analysis:
Quanta Services is the unassailable, high-growth infrastructure titan whose stock is a conviction bet on the multi-trillion-dollar, non-cyclical electrification and grid modernization supercycle. The core thesis is driven by the convergence of utility, power generation, and technology industries. Quanta is aggressively expanding its Total Solutions platform to capture massive new demand from data centers, reshoring manufacturing, and new power generation. This strategy is translating to financial velocity: Q3 2025 revenue surged 17.6% to $7.63 billion. The company is positioned to achieve record backlog and double-digit EPS growth in 2026, making it the indispensable execution partner for the modern U.S. infrastructure buildout.

Pitch Summary:
Contributors: In the second quarter, the Fund continued to benefit from diversification across sectors. However, quarterly performance was concentrated in technology and technology related companies including NVIDIA Corp (NVDA), Meta Platforms, Inc. (META), Microsoft Corp (MSFT), and Broadcom, Inc. (AVGO). NVIDIA was the strategy’s top performer for the period as the company’s first quarter results demonstrated continued strong demand for their leading artificial intelligence chips. While the tech sector turnaround in the quarter was encouraging, we continue to remain underweight some of the sector’s leaders such as NVIDIA and Apple, which largely reflects our ongoing risk management discipline around position sizing and concentration.

BSD Analysis:
NVIDIA is no longer just a semiconductor company; it’s the control plane for the global AI build-out. Its GPUs, networking, and software stack have become the default infrastructure for training and running large-scale AI models. CUDA remains a powerful moat, locking developers into an ecosystem that compounds with every new application built. While custom silicon and competitors are emerging, they mostly address overflow demand rather than displacing NVIDIA at the core. The next leg of growth is inference, which broadens demand beyond hyperscalers into enterprises and edge deployments. Valuation is elevated, but that reflects NVIDIA’s position as a bottleneck supplier in an AI arms race. As long as compute intensity keeps rising, NVIDIA’s earnings power remains structurally advantaged.

Pitch Summary:
Accenture thrives on change, leveraging rapid technological advancements to drive consistent demand for its IT services. As the clear leader in the fragmented consulting market, Accenture’s strong brand, unmatched global scale, comprehensive service offerings, and deep client relationships position it to continually gain market share from smaller competitors. Financially, Accenture stands out with a compelling fundamental track record. Since launching a dividend in 2006, Accenture has had a history of consistently increasing it in the mid-teens.

BSD Analysis:
Accenture is the high-quality, indispensable global digital transformation giant whose stock is a conviction bet on the non-cyclical, multi−year corporate shift to Generative AI. The core thesis is driven by the company's unassailable position as the trusted advisor capable of guiding global enterprises through the complex implementation of Gen AI. The company is aggressively positioning to capture this market, with 85% of organizations increasing technology investments focused on Gen AI. Accenture is an "AI Refinery"—taming complexity and unlocking scale—and its deep expertise in building a secure digital core for AI deployment is its ultimate moat. The stock is a high-quality compounder whose massive scale allows it to accelerate its clients' value realization from AI.