Investment Pitches

Pitch Summary:
Montage Technology. The company reported surging revenue and net profit growth, and our research indicated that it has continued to enlarge its presence in the scale-up networking market, while maintaining stable growth in its interface integrated circuit business. Montage Technology. The company is a fabless firm mainly engaged in designing and selling memory interface chips, with end markets focused on servers and data centers. We believe solid growth in memory interface chips and a fast ramp-up of new products have helped create a more promising growth outlook for Montage Technology.

BSD Analysis:
The manager maintains a bullish view on Montage Technology based on strong fundamental performance and strategic positioning in the memory interface chip market. The company reported surging revenue and net profit growth, demonstrating successful execution in its core business. Montage operates as a fabless semiconductor designer specializing in memory interface chips for servers and data centers, directly benefiting from AI-driven demand for data center infrastructure. The manager's research indicates the company is successfully expanding its presence in the scale-up networking market while maintaining stable growth in its traditional interface integrated circuit business. The fast ramp-up of new products suggests strong innovation capabilities and market responsiveness. Given the continued expansion of data center capacity driven by AI workloads, Montage Technology appears well-positioned to capture growing demand for memory interface solutions. The combination of strong recent financial performance and exposure to secular data center growth trends supports the manager's optimistic outlook.

Pitch Summary:
Delta Electronics. Positive earnings surprises and strong performance in electric vehicles and data centers lifted shares. The company raised earnings forecasts, reflecting confidence in its growth trajectory. We believe Delta, a key supplier of AI power, is benefiting from global electrification trends and AI infrastructure expansion.

BSD Analysis:
The manager expresses strong bullish conviction on Delta Electronics, driven by the company's dual exposure to electric vehicle and AI infrastructure growth themes. Delta delivered positive earnings surprises and subsequently raised its earnings guidance, demonstrating management's confidence in the business trajectory. The company operates as a key supplier of AI power solutions, positioning it to benefit from the massive capital expenditure cycle in AI infrastructure. Additionally, Delta's exposure to global electrification trends provides a secondary growth driver as the world transitions toward electric vehicles and renewable energy systems. The combination of strong recent financial performance and positioning in two major secular growth trends makes Delta an attractive play on the intersection of AI and electrification. The manager's thesis appears well-supported by the company's ability to capitalize on these converging technological shifts.

Pitch Summary:
Zhongji Innolight. We believe a strong earnings report and artificial intelligence (AI)-driven demand supported the stock. Zhongji Innolight is a key supplier of high-end optical transceivers for AI data centers and 5G networks, a focus of global AI capital spending cycles.

BSD Analysis:
The manager maintains a bullish stance on Zhongji Innolight based on strong earnings performance and positioning in the AI infrastructure boom. The company operates as a critical supplier of high-end optical transceivers, which are essential components for AI data centers and 5G networks. This positions the company directly in the path of accelerating global AI capital expenditure cycles. The manager's confidence appears grounded in the company's strategic positioning within the AI supply chain, particularly as hyperscale technology companies continue to increase their capital spending commitments. The earnings strength suggests the company is successfully capitalizing on the AI-driven demand surge. Given the continued expansion of AI infrastructure globally, Zhongji Innolight appears well-positioned to benefit from sustained demand for its specialized optical communication products.

Pitch Summary:
Vertex provides tax compliance software through both cloud and on-premises deployments, integrating with enterprise resource planning (ERP) systems primarily for large enterprises (companies with over 250 employees). The company offers comprehensive solutions that automate the full scope of indirect tax processes, including tax determination, data management, compliance, reporting, and document management. Shares detracted from performance during the quarter after Vertex reported strong second-quarter results but lowered its full-year revenue guidance. Management cited a more uncertain demand environment, as customers are expected to delay ERP and software implementations, which overshadowed otherwise solid quarterly execution.

BSD Analysis:
The manager takes a cautious stance on Vertex despite recognizing the company's strong position in enterprise tax compliance software. The company's comprehensive platform automating indirect tax processes serves a critical function for large enterprises, creating sticky customer relationships and recurring revenue streams. Integration with ERP systems provides competitive advantages and switching costs that protect market share. Strong quarterly execution demonstrates operational competency and product-market fit in the tax technology space. However, management's decision to lower full-year revenue guidance signals concerning demand headwinds. Customer delays in ERP and software implementations suggest broader enterprise technology spending weakness that could persist. The uncertain demand environment may pressure growth rates and force the company to increase sales and marketing investments to maintain momentum. While tax compliance remains a mission-critical function, near-term implementation delays create revenue timing risks.

Pitch Summary:
Palomar Holdings is a specialty insurance company providing property and casualty coverage focused on risks such as earthquakes, hurricanes, and floods, primarily serving residential and commercial clients in the United States. The company generates revenue by underwriting specialized insurance policies and collecting premiums from policyholders. We believe Palomar is favorably positioned due to its targeted focus on underserved markets and strategic growth initiatives. During the quarter, shares detracted from performance as investors grew concerned about underwriting quality despite strong second-quarter earnings. Palomar's combined ratio (i.e., incurred losses and expenses as percentage of earned premiums) came in higher than analyst estimates, driven by elevated expenses and a mix shift from early crop premiums, signaling margin pressure. These concerns overshadowed strong second-quarter earnings, driven by strong premium growth, where management raised its full-year earnings guidance.

BSD Analysis:
The manager expresses a cautious view on Palomar Holdings despite acknowledging the company's strategic positioning in underserved specialty insurance markets. The company's focus on catastrophic risks like earthquakes, hurricanes, and floods provides access to higher-margin, less competitive market segments. Strong premium growth and raised earnings guidance demonstrate the company's ability to expand market share and pricing power. However, deteriorating underwriting metrics raise concerns about profitability sustainability. The combined ratio coming in above analyst expectations signals potential margin compression from elevated expenses and unfavorable business mix shifts. The move away from early crop premiums suggests challenges in maintaining profitable underwriting standards. While specialty insurance markets offer attractive long-term opportunities, near-term underwriting quality concerns may pressure valuation multiples and investor confidence.

Pitch Summary:
SPS Commerce provides cloud-based tools that help retailers, suppliers, and logistics partners share product information, manage orders and inventory, and track sales across channels. During the quarter, the company delivered strong fiscal second-quarter results, raised its full-year outlook, and announced a share repurchase program. However, shares detracted from performance after management lowered their medium term organic revenue growth rate, citing more cautious customer spending and longer decision cycles amid macroeconomic uncertainty.

BSD Analysis:
The manager presents a neutral view on SPS Commerce, acknowledging strong near-term execution while expressing concern about medium-term growth prospects. The company's cloud-based supply chain platform serves a critical function connecting retailers, suppliers, and logistics partners across commerce ecosystems. Strong quarterly results and raised guidance demonstrate solid operational performance and market demand for supply chain digitization solutions. The share repurchase program signals management confidence and capital allocation discipline. However, management's decision to lower medium-term organic growth expectations reflects challenging macroeconomic conditions affecting customer spending patterns. Longer decision cycles suggest customers are becoming more cautious about technology investments. While the company maintains a strong competitive position in supply chain software, near-term headwinds may pressure growth rates and valuation multiples.

Pitch Summary:
Artivion manufactures, processes, and distributes medical devices and preserved tissues used in cardiac and vascular surgeries for patients with aortic disease. The business spans medical devices and preservation services. Shares contributed positively during the quarter after Artivion reported a strong fiscal second-quarter earnings and raised its full-year outlook. Management pointed to renewed momentum in its mechanical valves and continued uptake of a new aortic stent graft, and emphasized operating leverage as the business scales. Investor confidence was further supported by progress on the U.S. clinical pathway for an aortic arch device.

BSD Analysis:
The manager expresses confidence in Artivion's specialized position in aortic disease treatment, highlighting strong operational momentum and product innovation. The company's dual focus on medical devices and tissue preservation services creates a differentiated offering in cardiac surgery. Recent earnings strength and raised guidance demonstrate accelerating business momentum across key product lines. Renewed traction in mechanical valves and uptake of the new aortic stent graft indicate successful product launches and market acceptance. Management's emphasis on operating leverage suggests improving profitability as the business scales. Progress on the U.S. clinical pathway for the aortic arch device represents a significant pipeline catalyst that could expand addressable markets. The company appears well-positioned to benefit from aging demographics and increasing cardiac surgery volumes.

Pitch Summary:
Impinj designs, sells, and licenses a platform based on RAIN RFID—a wireless tagging technology that helps organizations identify and track items across supply chains. Its offering spans small endpoint chips (the tags placed on products), readers, and software that work together to improve visibility of inventory and assets across stores, warehouses, and distribution. We believe Impinj is well positioned as adoption of item-level tracking expands across retail and other industries. We believe the company's next-generation endpoint chip (the M800 family) is supporting broader use cases and helping Impinj continue to gain share in the RAIN RFID market. During the quarter, shares contributed positively after the company reported stronger-than-expected fiscal second-quarter results and issued an improved outlook for the third quarter. Despite a mixed retail environment, management highlighted ongoing progress with large enterprise rollouts and continued momentum at major customers, while pilot programs in food and grocery are accelerating.

BSD Analysis:
The manager maintains a bullish stance on Impinj, viewing it as a key beneficiary of expanding item-level tracking adoption across industries. The company's comprehensive RAIN RFID platform spanning chips, readers, and software creates a compelling ecosystem play with recurring revenue potential. The next-generation M800 chip family represents a significant technological advancement enabling broader use cases and market share gains. Strong quarterly results and raised guidance demonstrate execution despite challenging retail conditions. Management's progress with large enterprise rollouts indicates scalable growth potential, while accelerating pilot programs in food and grocery suggest new market penetration. The company appears well-positioned to capitalize on secular trends toward supply chain digitization and inventory optimization. Impinj's platform approach creates switching costs and competitive moats in the growing RFID market.

Pitch Summary:
Semtech designs semiconductors and connectivity solutions that enable high-speed data transfer in data centers and connect devices across industrial and consumer markets. Its portfolio includes protection products, signal integrity solutions, and wireless sensing technologies, along with advanced interconnect offerings like FiberEdge and CopperEdge. During the quarter, shares contributed positively to performance after the company reported fiscal second-quarter earnings that beat analyst estimates. Management highlighted strong traction for its newest data-center connectivity products, continued engagement with large customers, and progress streamlining operations and strengthening the balance sheet.

BSD Analysis:
The manager presents a bullish view on Semtech based on strong execution and positioning in high-growth data center connectivity markets. The company's diversified semiconductor portfolio spanning data centers, industrial, and consumer applications provides multiple growth vectors. Recent earnings beat demonstrates operational momentum, with management highlighting strong customer traction for next-generation data center products. The focus on streamlining operations and balance sheet strengthening suggests improving operational efficiency and financial discipline. Semtech appears well-positioned to benefit from secular trends in data center expansion and AI infrastructure buildout. The company's advanced interconnect solutions like FiberEdge and CopperEdge differentiate it in the competitive semiconductor landscape. Strong customer engagement indicates sustainable demand for the company's connectivity solutions.

Pitch Summary:
Pennant Group, Inc. (PNTG) owns a network of senior-living facilities, home-health agencies and hospice service providers located primarily across the western, southwestern and midwestern U.S. Pennant has successfully focused on purchasing underutilized assets and subsequently driving patient volumes higher. Each provider operates independently while benefiting from shared services in areas such as payroll, human resources and legal. Sentiment with respect to the stock suffered in the quarter from concerns around initial proposed reimbursement rates for services under Medicare that were lower than expected. We expect the final rate structure will be more favorable and could support a recovery in the stock.

BSD Analysis:
The manager maintains a bullish view on Pennant Group despite recent regulatory headwinds affecting sentiment. The investment thesis is built on the company's proven operational strategy of acquiring underutilized healthcare assets and improving patient volumes through better management. The business model combines independent facility operations with centralized shared services, creating operational leverage while maintaining local autonomy. The company operates across senior living, home health, and hospice services, providing diversified healthcare exposure in growing demographic markets. Recent stock weakness stems from proposed Medicare reimbursement rate concerns, which the manager views as temporary. The expectation of more favorable final rates suggests potential for stock recovery as regulatory uncertainty resolves.

Pitch Summary:
PAR Technology Corp. (PAR) offers restaurants a software platform with modules encompassing point-of-sale, online and mobile ordering, customer loyalty and back-office operations. The company has grown in recent years through a string of acquisitions. In July, PAR reported organic growth for the second quarter that was well below both our and the market's expectations. We exited the position during the quarter.

BSD Analysis:
The manager exited PAR Technology due to disappointing organic growth performance that fell short of expectations. The company operates a comprehensive restaurant software platform covering point-of-sale, online ordering, mobile ordering, loyalty programs, and back-office operations. While the platform appears comprehensive, the company's growth strategy has relied heavily on acquisitions rather than organic expansion. The significant miss on organic growth in Q2 suggests underlying business challenges that may indicate integration difficulties or market saturation. The manager's quick exit demonstrates disciplined risk management when fundamental performance deteriorates below investment thesis expectations.

Pitch Summary:
On the downside, leading detractors from Fund performance included Limbach Holdings, Inc. (LMB), a provider of maintenance and repairs for critical building systems including plumbing, heating, cooling and electrical. The company has increasingly shifted its business mix away from working with general contractors and toward more profitable and stable direct relationships with building owners. Customers within the owner-direct segment typically own multiple buildings in a campus-like setting, such as with a health-care, an educational or an industrial complex. The stock dipped sharply in the quarter on what we view as poorly communicated guidance with respect to the timing of the expected contribution to earnings from a recent acquisition as well as to the company's organic growth outlook. After meeting with Limbach's management team, we believe the market's reaction to the company's muddled messaging was overstated. We maintain a positive longer-term view of the stock and added to the position.

BSD Analysis:
The manager maintains conviction in Limbach despite recent underperformance, viewing the stock decline as a communication issue rather than fundamental deterioration. The investment thesis centers on the company's strategic shift toward higher-margin, more stable direct relationships with building owners versus general contractors. This business model transformation targets customers with multiple buildings in campus settings like healthcare, education, and industrial complexes, providing recurring revenue opportunities. The manager conducted direct management meetings to assess the situation and concluded the market overreacted to unclear guidance regarding acquisition timing and organic growth. The decision to add to the position during weakness demonstrates high conviction in the long-term value creation potential.

Pitch Summary:
Vital Farms, Inc. (VITL) is a provider of specialty eggs and butter from small farms and pasture-raised animals. Consumers are increasingly focused on how the food they eat is sourced, both with respect to the health implications and how the animals involved are treated. The farms that Vital utilizes are subject to various requirements in terms of acreage per chicken and the like, and consumers are able to use the product packaging to trace the company's products back to a specific farm. We started accumulating the stock at a reasonable valuation during a period when Vital's growth was slowing due to capacity constraints. The company has been successfully adding farms to its network of providers, and the stock was supported in the quarter as Vital Farms posted earnings that were above expectations and raised guidance. The stock was one of our larger holdings entering the quarter, and while we have since trimmed the position, we view Vital Farms's increasing consumer focus on sustainable and ethical food sources as a durable trend.

BSD Analysis:
The manager presents a compelling long-term thesis for Vital Farms centered on sustainable and ethical food sourcing trends. The company operates a differentiated business model with pasture-raised products and farm traceability that appeals to increasingly conscious consumers. The manager demonstrated patience by accumulating shares during a growth slowdown caused by capacity constraints, which the company has since addressed by expanding its farm network. Recent earnings beat expectations with raised guidance, validating the operational improvements. The manager views the consumer shift toward sustainable food sources as a durable secular trend, providing long-term growth visibility. Position sizing discipline is evident through trimming after strong performance.

Pitch Summary:
Shares of Impinj, Inc. (PI), a provider of radio frequency identification (RFID) technology used in tracking inventory, rose sharply in the quarter. The company's technology is differentiated within the RFID market by its superior reading ability and range. Impinj's largest customer is Walmart, where use of its technology is expanding from apparel to general merchandise and—potentially—food. The company's products are also used in managing supply-chain logistics, including by package delivery companies UPS and FedEx to reduce shipping errors. We had purchased the stock earlier in the year on weakness related to tariff concerns, and we exited the position in the quarter as the valuation became less favorable and as the company's market capitalization became less consistent with the Fund's micro-cap focus.

BSD Analysis:
The manager executed a successful tactical trade in Impinj, purchasing on tariff-related weakness and exiting after strong performance. The investment case was built on differentiated RFID technology with superior reading capabilities and expanding use cases at major customers like Walmart. The technology's application is broadening from apparel to general merchandise and potentially food, indicating growth runway. Supply chain applications with UPS and FedEx demonstrate diversified end markets beyond retail. However, the manager exited due to valuation concerns and the company growing beyond the fund's micro-cap mandate, suggesting disciplined portfolio management and adherence to investment constraints.

Pitch Summary:
Leading individual contributors included utility consulting firm Willdan Group, Inc. (WLDN), which posted strong earnings and raised guidance in the quarter. The company uses software and analytics to help utilities optimize the distribution of energy across the power grid. Willdan's growth trajectory has benefited from a significant increase in spending by utility companies that is driven by rising energy demand from data centers as well as the near-term strain on energy production resulting from the California wildfires. The company has been winning large contracts that provide significant visibility into earnings over the next several years.

BSD Analysis:
The manager presents a bullish case for Willdan Group based on strong fundamental performance and favorable industry tailwinds. The company delivered strong earnings and raised guidance, demonstrating operational execution. The investment thesis centers on increasing utility spending driven by data center energy demand and California wildfire impacts on energy infrastructure. Willdan's software and analytics platform for power grid optimization positions it well to capture this spending increase. The manager highlights contract wins providing multi-year earnings visibility, suggesting predictable revenue growth. This appears to be a beneficiary of the broader infrastructure and energy transition themes.

Pitch Summary:
Five years ago CRISPR was a popular stock among growth-oriented investors, known for pioneering CRISPR gene-editing technology. However, the biotech sentiment implosion has been so profound that we can now buy CRISPR at a discount to just the cash on its balance sheet plus the value of its commercialised therapy, Casgevy, which is used to treat sickle-cell disease and transfusion-dependent β-thalassemia. Guided by scientist-CEO Dr Samarth Kulkarni, CRISPR Therapeutics became the first company to get a CRISPR-based therapy approved by regulators. Because every patient must clear eligibility screens, undergo stem-cell harvesting, and be treated at a steadily expanding network of specialised centres, uptake follows a measured, step-like curve, unlike conventional drugs that generate revenue almost immediately after approval. Our market assessment suggests Casgevy is a multibillion-dollar opportunity with a strong competitive position and no visible patent cliff. And partnering with Vertex gives Casgevy the commercial muscle it deserves while allowing CRISPR to remain research-focused. Despite this, the market's expectations remain muted, constrained by the therapy's unusual launch trajectory. That disconnect in share price is magnified by the company's healthy balance sheet: management raised substantial capital when financing was readily accessible, enabling CRISPR to keep funding high-upside research while many peers are slashing budgets.

BSD Analysis:
Orbis presents CRISPR Therapeutics as a deep value opportunity in gene editing, trading at a discount to cash plus Casgevy value due to biotech sentiment collapse. The company achieved a historic milestone as the first to gain regulatory approval for a CRISPR-based therapy, Casgevy, for sickle-cell disease and β-thalassemia. Under scientist-CEO Dr. Samarth Kulkarni's leadership, the company maintains research focus while partnering with Vertex for commercial execution. The unusual launch trajectory requiring specialized treatment centers creates a measured uptake curve that the market misunderstands, leading to muted expectations despite multibillion-dollar potential. CRISPR's strong balance sheet, built when capital was accessible, provides competitive advantage as peers cut R&D spending. At a $6 billion market cap and 0.9% portfolio weight, this represents a smaller but high-conviction contrarian position. The partnership with Vertex provides commercial muscle while preserving CRISPR's research-focused strategy, with no visible patent cliff threatening the competitive position.

Pitch Summary:
The newest addition to our biotech holdings, Insmed, has achieved a major milestone with the recent FDA approval of brensocatib (brand name: BRINSUPRI) for bronchiectasis—with a clean label and strong pricing. This marks the first approved therapeutic option for patients with this chronic lung disease, whose quality-of-life burden is comparable to that of chronic obstructive pulmonary disease. We anticipate a rapid adoption curve that should push the company toward sustained profitability. The attraction, however, goes well beyond a single drug. The second pipeline asset, TPIP, has now achieved key clinical validation in pulmonary arterial hypertension as well as idiopathic pulmonary fibrosis, reinforcing its potential as a transformative therapy for patients suffering from deadly lung diseases. Combined with its already approved ARIKAYCE for Mycobacterium avium complex lung disease, the launch of brensocatib and the progress of TPIP are helping Insmed build a powerful respiratory disease franchise—a disease-focused strategy that has proven lucrative for other biotech leaders. Despite a recent rally following BRINSUPRI approval and TPIP clinical readouts, shares remain well below our estimate of their intrinsic value, leaving substantial room for multi-year appreciation. Insmed is led by its long-time CEO Will Lewis, who took the helm when the company's market capitalisation was under $100 million (now $30 billion). During his tenure, the company has created significant shareholder value through disciplined R&D bets. A continuation of this strategy should lead to further value creation that the market is not pricing into the shares.

BSD Analysis:
Orbis views Insmed as an emerging respiratory disease franchise with multiple value drivers. The recent FDA approval of brensocatib (BRINSUPRI) for bronchiectasis represents a significant milestone as the first approved treatment for this chronic lung condition, with strong pricing and clean labeling supporting rapid adoption. Beyond this single drug, the TPIP pipeline asset has shown clinical validation across multiple deadly lung diseases including pulmonary arterial hypertension and idiopathic pulmonary fibrosis. Combined with existing ARIKAYCE, Insmed is building a focused respiratory franchise similar to successful biotech strategies. CEO Will Lewis has demonstrated exceptional capital allocation, growing market cap from under $100 million to $30 billion during his tenure. Despite recent rallies following positive clinical and regulatory news, Orbis believes shares trade well below intrinsic value with substantial multi-year appreciation potential. At 1.5% portfolio weight, this represents a meaningful but measured position in this newer holding.

Pitch Summary:
Distinguished by its proven antibody discovery engine that has yielded eight approved medicines, Genmab is approaching patent expirations for its flagship product, Darzalex, in the late 2020s and early 2030s. Investors routinely flee when a patent cliff looms, fixating on the certain loss of legacy revenue while discounting whatever might replace it. Genmab sits squarely in that sentiment trough. Today its shares trade for less than the value of already-approved drugs, implying the world-class pipeline and discovery engine are worth nothing. Meanwhile, a slate of late-stage assets and a growing roster of partnered drugs are only beginning to contribute revenue, with sales and royalties that extend well into the 2030s. Genmab's R&D machine is still run by its scientist-founder, Dr Jan van de Winkel, whose more than two-decade tenure and sizeable equity stake have fostered disciplined capital allocation and scientific excellence. The company's recent acquisition of ProfoundBio adds antibody-drug-conjugate technology that slots neatly into Genmab's core expertise, expanding the opportunity set without stretching the balance sheet. Yet, the market still treats Genmab as a single-product story, allowing investors to buy the stock at a price that's lower than the value of its commercialised drugs' cash flows alone and get a world-class discovery platform for free.

BSD Analysis:
Orbis identifies Genmab as a classic contrarian opportunity where patent cliff fears have created significant value. The fund argues that shares trade below the value of already-approved drugs, essentially getting the discovery platform for free. With eight approved medicines from its antibody discovery engine, Genmab has demonstrated consistent R&D productivity under founder-CEO Dr. Jan van de Winkel's leadership spanning over two decades. The approaching Darzalex patent expiration in the late 2020s has created investor pessimism, but late-stage pipeline assets and partnered drugs provide revenue visibility into the 2030s. The recent ProfoundBio acquisition strategically adds antibody-drug-conjugate capabilities without financial strain. At an $18 billion market cap representing 2.7% of the portfolio, this reflects strong conviction in the mispricing. The market's single-product focus on Darzalex ignores the substantial value of the proven discovery platform and pipeline.

Pitch Summary:
This company stands at the forefront of RNA-interference (RNAi) therapeutics, a technology capable of silencing specific gene expressions and reducing harmful proteins. After decades of development, RNAi has proven safe and effective in treating serious diseases like Transthyretin amyloid cardiomyopathy (ATTR-CM). Each of Alnylam's four marketed medicines and two partnered medicines were invented in-house—a remarkable R&D productivity streak highlighting its scientific prowess. Earlier this year Alnylam received regulatory approval for its next-generation ATTR-CM medicine, Amvuttra. We believe Amvuttra represents a best-in-class treatment that will significantly benefit patients. With the first commercial quarter results now in, Amvuttra has exceeded market expectations by a wide margin, validating our initial thesis. Alnylam's management team, led by CEO Dr. Yvonne Greenstreet, continues to demonstrate both scientific rigour and strong commercial execution. This stronger-than-expected sales ramp puts Alnylam firmly on track to achieve profitability this year and strengthens its position among biotech giants like Vertex and Gilead.

BSD Analysis:
Orbis presents a compelling bull case for Alnylam based on its leadership in RNAi therapeutics and strong commercial execution. The fund highlights the company's impressive R&D productivity with all six medicines invented in-house, demonstrating sustainable competitive advantages. The recent approval and strong launch of Amvuttra, a next-generation ATTR-CM treatment, has exceeded market expectations and validates the investment thesis. Management under CEO Dr. Yvonne Greenstreet is executing well both scientifically and commercially. The stronger-than-expected sales trajectory positions Alnylam to achieve profitability this year, a significant milestone for biotech companies. With a $60 billion market cap and 2.8% portfolio weight, this represents a substantial conviction position. The company's positioning among established biotech leaders like Vertex and Gilead suggests potential for continued growth and market recognition.

Pitch Summary:
Our worst performing holding in the quarter was Centene (CNC). Shares of the managed care company suffered from a policy-induced risk pool shift in the ACA Healthcare Exchanges that negatively impacted profit margins and caused a pre-announced earnings cut, nearly a month ahead of the scheduled earnings release date. Frankly, we were evaluating a position size reduction given the policy changes but were surprised by the announcement timing. Recognizing the short-tailed nature of the liabilities (allowing faster adjustments than other forms of insurance), we waited for management to formally articulate their plans to address the issue in late July. We came away encouraged by aggressive pricing actions meant to reflect recent developments and restore margins. In September, the company provided a positive update on the action plan that helped shares begin to recover from July's sharp selloff. Meanwhile, political pressure has intensified from both sides of the aisle to address the looming health insurance affordability crisis. Any policy improvement would further supplement the actions taken by CNC, which assume no relief. The stock trades at 11x 2026 earnings estimates which look increasingly beatable based on the recent update.

BSD Analysis:
Despite being the fund's worst performer in the quarter, Heartland maintains a constructive view on Centene based on management's responsive actions and attractive valuation. The company faced significant headwinds from ACA Healthcare Exchange policy changes that shifted the risk pool and compressed margins, leading to a pre-announced earnings cut that caught the market off-guard. However, the fund emphasizes the short-tailed nature of managed care liabilities, which allows for faster pricing adjustments compared to other insurance products. Management's aggressive pricing actions implemented in late July to restore margins, followed by positive updates in September, demonstrate the company's ability to adapt quickly to regulatory changes. The fund sees additional upside potential from bipartisan political pressure to address healthcare affordability issues, which could provide policy relief beyond what management has already assumed in their turnaround plan. At 11x 2026 earnings estimates, the valuation appears compelling, particularly given management's recent positive updates that suggest these estimates may prove conservative.