Investment Pitches

Pitch Summary:
Crawford United announced an agreement to be sold to SPX Technologies for $300 million, or $83.42 per share. We purchased our first Crawford United shares in late 2018 and continued to add in 2019, paying an average of $12 per share. When the sale completes, we will have earned approximately 7x our investment. While the headline price is not unreasonable at a mid-teens multiple of trailing earnings, I believe the company could have achieved a much higher valuation in just a few years. The air handling unit is a true gem with double-digit revenue and earnings growth. The industrial and transportation segment is less impressive but improving. In my view, SPX is paying fair value for the air handling segment and getting the rest of the business cheaply.

BSD Analysis:
Crawford United enters 2026 as a high-performing specialty industrial group, recently achieving a market capitalization of approximately $291 million. The company continues to deliver record financial results, with trailing twelve-month revenue reaching $175 million and earnings per share of $4.97 as of early 2026. For the current year, the investment case is bolstered by the firm’s dominant position in the commercial air handling and industrial transportation segments, which provide essential infrastructure for the healthcare and aerospace sectors. Management’s aggressive "bolt-on" acquisition strategy is driving significant top-line growth while maintaining a disciplined focus on high-margin specialty products. With a clean balance sheet featuring more cash than debt and a healthy current ratio, the company possesses the financial flexibility to continue its expansion. Analysts view the stock as an overlooked micro-cap industrial leader with a proven track record of compounding shareholder value through operational excellence. The stock’s 52-week range reflects strong upward momentum, positioning it for potential multi-year outperformance.

Pitch Summary:
Zegona Communications was Alluvial Fund’s best performer this year, and it wasn’t a close contest. We originally purchased shares of Zegona on the thesis that the leveraged buyout of Vodafone Spain, completed in May 2024, would be a success. Specifically, that Vodafone Spain, under Zegona’s management, would sell its valuable fiber networks, reduce operating costs, return to customer growth, and return capital to shareholders. If Zegona had accomplished only 3 out of 4, I would have called it a successful year, but Zegona did it all and the stock responded accordingly. Late last year, Vodafone Spain concluded a partial sale of its fiber joint venture with MasOrange, receiving proceeds of €1.4 billion. Combined with the €400 million from its other fiber joint venture sale, Zegona generated a total of €1.8 billion in cash. The company immediately rewarded shareholders with a €1.4 billion cash distribution, reserving €200 million for debt reduction and another €200 million for share repurchases. The shareholder distribution also had the happy effect of canceling 69% of Zegona’s shares outstanding. The market reclassified Zegona from speculative to investable, yet we believe it still trades at a discount to peers.

BSD Analysis:
Zegona Communications enters 2026 as a pivotal player in the European telecommunications sector following its transformative acquisition of Vodafone Spain. The company is currently executing a multi-year turnaround strategy focused on stabilizing the Spanish unit’s market share and driving significant operational efficiencies. For 2026, the investment thesis is anchored by the realization of nearly 500 million euros in projected cost synergies and a transition toward a leaner, more agile corporate structure. Management’s disciplined "buy-fix-sell" model is being tested as they navigate a highly competitive Iberian market characterized by aggressive pricing. While debt levels remain a primary focus for institutional investors, the firm’s robust free cash flow generation provides a clear path for deleveraging. If the company successfully meets its mid-term EBITDA targets, Zegona offers substantial valuation upside as a specialized turnaround vehicle. Investors should view the current cycle as a high-conviction bet on management's ability to replicate their previous success with Telecable and Euskaltel.

Pitch Summary:
AppLovin Corporation's stock experienced a significant drop due to market overreaction to a new AI gaming prototype by Google, which is not yet a direct competitor. The company's recent inclusion in the S&P 500 had previously driven the stock price up, but the current dip presents a buying opportunity. AppLovin reported strong Q3 2025 revenues of $1.4 billion, a 68% year-over-year increase, and forecasts continued growth. The company is highly profitable with a 59% net income margin and 82% adjusted EBITDA margins. With a substantial share buyback program and strong free cash flow, AppLovin is well-positioned for future growth.

BSD Analysis:
AppLovin's recent stock price decline is attributed to fears over Google's Project Genie, which is more of a tool for virtual world exploration than a direct competitor in the gaming space. The company's fundamentals remain strong, with impressive revenue growth and profitability metrics. The market's reaction seems to overlook AppLovin's strategic position and potential for leveraging AI tools to enhance its platform. The company's ability to generate significant free cash flow and its ongoing share buyback program further strengthen its investment case. Investors should consider the current dip as a strategic entry point, especially if the stock price falls to the $400-$450 range, offering a valuation that aligns more closely with its growth prospects.

Pitch Summary:
JBS N.V. is compellingly valued due to its global leadership in the protein industry, with a robust asset portfolio that is difficult to replicate. Despite recent market outperformance, the company remains fundamentally attractive, with a well-covered dividend and a strategic position that should interest value investors. The company trades at a significant discount compared to its peers, which is excessive given its strong free cash flow generation and ongoing debt reduction. The dual listing on the NYSE is expected to enhance transparency and potentially narrow the valuation gap with peers. JBS's operations are diversified across six continents, allowing it to balance regional supply and demand effectively.

BSD Analysis:
JBS's valuation is attractive, with a P/E ratio significantly lower than its peers, reflecting an opportunity for multiple expansion. The company's focus on deleveraging and strategic investments positions it well for future growth. However, it faces risks from volatile protein markets and input cost inflation, particularly in the U.S. cattle market. Despite these challenges, JBS's strong cash flow and strategic positioning provide a buffer against market volatility. The company's dividend yield is appealing, and its financial profile is sound, with leverage comparable to European consumer staples. Investors should be prepared for cyclical fluctuations and maintain a long-term perspective.

Pitch Summary:
Home Depot's stock has been underperforming due to unsustainable high pricing and macroeconomic headwinds. Despite favorable market conditions, the stock has declined by nearly 9% since its peak in late 2024. The company's Q3 2025 report highlighted missed expectations and lowered guidance, indicating ongoing challenges. The stock's current valuation remains above long-term trends, suggesting further downside risk. Investors should be cautious about buying the dip, as macroeconomic factors like high mortgage rates and declining consumer confidence pose additional risks.

BSD Analysis:
Home Depot's recent performance has been impacted by a combination of internal and external factors. The company's lowered gross margin guidance and declining operating margins reflect increased pricing pressures and rising fixed costs. Despite acquisitions aimed at growth, such as the GMS Inc. deal, earnings per share continue to decline. The broader economic environment, including high mortgage rates and falling consumer confidence, further exacerbates the company's challenges. With the stock's valuation still above historical trends, investors should be wary of potential further declines, especially if upcoming earnings reports fail to provide a positive outlook.

Pitch Summary:
Bed Bath & Beyond, Inc. is facing significant financial challenges, with its stock price down 53.28% from its 52-week high. The company is struggling with declining revenues and a reversal of free cash flow profitability. Its strategy to ramp up common shares to address liquidity needs has inversely affected its stock price. The introduction of a new 'three-pillar strategy' under Executive Chairman Marcus Lemonis aims to stabilize financials, but it closely resembles previous strategies that have not yielded positive results. The company's cash position is precarious, with a high cash burn rate and a limited runway. Despite some improvements in adjusted EBITDA, the overall outlook remains negative due to persistent revenue declines and liquidity issues.

BSD Analysis:
The company's attempt to reinvent itself with buzzword-heavy strategies like 'AI, data, digital asset infrastructure' appears to be more of a marketing effort than a substantive change. The ongoing conversion of Kirkland's locations into Bed Bath & Beyond stores and the push for franchising outside California are part of its asset-light growth strategy, but these efforts have yet to demonstrate significant traction. The company's negative free cash flow and reliance on shareholder dilution for liquidity highlight the risks involved. While the revenue decline could have been less severe without the exit from Canada, the overall financial health remains weak. The market's current valuation reflects skepticism about the company's ability to execute its turnaround plan effectively.

Pitch Summary:
The BetaPro Natural Gas Leveraged Daily Bull ETF (HNU:CA) is designed to offer investors double the daily performance of natural gas prices, while also hedging against currency fluctuations between the US and Canadian dollars. This ETF is highly liquid, with significant daily trading volume, but it is inherently speculative due to its leveraged nature. The fund tracks the BetaPro Natural Gas Rolling Futures Index, which involves rolling futures contracts that can incur additional costs, especially in contango markets. The ETF is suitable only for experienced traders seeking short-term exposure, as holding it longer than a day can lead to NAV decay and compounded returns that may not align with the intended 2x performance. Given the volatility and risks associated with natural gas prices, this ETF should not be considered a long-term investment.

BSD Analysis:
HNU:CA is a tool for traders looking to capitalize on short-term movements in natural gas prices, but it requires a high risk tolerance and strict risk management. The ETF's reliance on futures contracts introduces complexities such as carry costs and potential losses from rolling contracts in contango markets. While the leverage can amplify gains, it equally magnifies losses, making it crucial for traders to monitor positions closely. The ETF's management expense ratio is competitive with similar US products, but additional trading costs can erode returns. External factors like weather, geopolitical events, and supply-demand dynamics can significantly impact natural gas prices, adding another layer of risk. Overall, HNU:CA is best suited for tactical trading rather than strategic, long-term investment.

Pitch Summary:
Microsoft Corporation experienced a significant one-day selloff of nearly 12% following its Q2 FY2026 earnings report, which was the largest since the Covid pandemic. Despite this, the company's fundamentals remain strong, with solid Q2 results and a positive Q3 outlook. The decline is attributed to concerns over aggressive AI spending and a resulting negative free cash flow of $1.7 billion. However, commercial bookings grew by 228% YoY, indicating strong demand. The stock's forward P/E ratio has contracted, making it an attractive buying opportunity.

BSD Analysis:
The market's reaction to Microsoft's earnings appears to be an overreaction driven by sentiment rather than fundamentals. The company's aggressive capital expenditure, primarily on short-lived assets like GPUs and CPUs, is a strategic move to capture the growing AI demand. Despite the temporary impact on free cash flow, Microsoft's long-term growth prospects remain robust, supported by a substantial backlog of commercial bookings. The stock's valuation, now at a lower P/E ratio compared to its historical average and peers, suggests that the negative sentiment is already priced in, presenting a compelling entry point for investors.

Pitch Summary:
DNP Select Income Fund (DNP) offers a diversified portfolio focused on traditional utility companies, providing stable returns through regulated service rates. The fund's strategy includes a mix of stocks and debt instruments, which helps mitigate risks but also limits potential growth. DNP's high leverage and historical premium trading pose risks, especially if the premium collapses, impacting returns. Despite its stable dividend history, the fund's reliance on Return of Capital indicates potential income sustainability issues. While DNP remains a solid choice for income-oriented investors, its lower total return compared to UTG and potential premium risks suggest a 'Hold' recommendation.

BSD Analysis:
DNP's diversified approach, with only 31.55% of assets in its top 10 holdings, provides stability but limits upside potential. The fund's reliance on traditional utilities means it may not fully capitalize on emerging trends like the AI supercycle. DNP's historical premium trading could pose risks if market conditions shift, potentially eroding returns. The fund's use of Return of Capital to maintain dividends raises concerns about income sustainability. While DNP offers a stable income stream, its growth prospects are limited compared to more modern-focused funds like UTG. Investors should weigh the fund's stability against its growth limitations and premium risks.

Pitch Summary:
Reaves Utility Income Trust (UTG) is positioned to capitalize on the ongoing AI supercycle by focusing on modern utility companies that supply power to data centers. With a portfolio concentrated on independent power producers like Talen Energy, Vistra, and Constellation Energy, UTG stands to benefit from increased electricity demand driven by AI and big tech companies. The fund's strategy of leveraging high interest rates is expected to yield higher returns as the Federal Reserve continues to cut rates, reducing leverage costs. UTG's stable dividend history and its ability to trade at fair value (P/NAV of 1.00x) make it an attractive option for income-focused investors. The fund's modern approach and stable financial metrics position it as a strong buy, even in volatile markets.

BSD Analysis:
UTG's focus on modern utilities aligns with the anticipated growth in the technology sector, particularly the AI supercycle, which is expected to drive electricity demand. The fund's high leverage, while a risk, is mitigated by the current monetary policy easing, which lowers servicing costs. UTG's concentrated portfolio, with 55.63% in its top 10 assets, suggests a higher risk-reward profile, but its historical stability in dividends and NAV provides a safety net. The fund's strategic positioning in the utilities sector, combined with its modern investment approach, makes it a compelling choice for investors seeking growth and income. As the AI supercycle continues, UTG is well-placed to capture the resulting economic benefits.

Pitch Summary:
Palantir Technologies reported strong Q4 2025 earnings, with revenue growth accelerating to 69% year-over-year and a significant increase in order volume. The company's U.S. commercial and government businesses both showed impressive growth, with the commercial segment growing by nearly 140%. Despite these positive metrics, Palantir's stock remains expensive, trading at approximately 50x sales and 90x operating profit. While the company's high growth justifies a premium valuation, the stock is not considered a must-own due to potential downside risks if growth slows or if the AI trend loses momentum.

BSD Analysis:
Palantir's accelerating revenue growth and expanding margins highlight its strong operational performance and scalability. The company's backlog growth, with new deals closed at a record $4.3 billion, suggests robust future revenue potential. However, the high valuation poses risks, especially if market sentiment shifts or if the AI sector faces regulatory challenges. Investors should weigh the company's growth prospects against its valuation, considering their risk tolerance and investment goals. Palantir's performance is promising, but caution is warranted given the premium pricing.

Pitch Summary:
Peakstone Realty Trust has undergone a significant transformation, shifting its focus from office properties to industrial outdoor space (IOS). This strategic pivot has positioned the company for acquisition by Brookfield Asset Management at a $21 per share price, representing a 34% premium over its trading price. The deal is expected to close by the end of Q2 2026, with minimal regulatory hurdles anticipated. Peakstone's portfolio, now consisting of 76 industrial properties, is attractive due to its potential for lease rate increases as current below-market leases expire. The acquisition by Brookfield is seen as a natural fit, given its focus on real assets. While the stock has appreciated significantly, the current trading price offers limited upside, aligning with the risk-free rate.

BSD Analysis:
Peakstone's strategic shift to industrial properties has been bold, with management successfully executing the sale of office assets at book value. This transition has allowed the company to build a portfolio with significant potential for future cash flow growth, particularly as leases are reset to market levels. The acquisition by Brookfield underscores the attractiveness of Peakstone's assets, with the $21 per share offer reflecting a premium to book value. The deal's structure, including a substantial termination fee, minimizes downside risk, making it unlikely for another bidder to emerge. Investors are advised to hold shares, as the current price reflects the deal's value, with limited additional upside anticipated.

Pitch Summary:
Palantir Technologies Inc. is experiencing hypergrowth, with impressive revenue and EPS figures exceeding expectations. However, the stock is trading at an exorbitant valuation of approximately 120x P/S, which is unsustainable. Despite the company's robust business performance, the long-term risk/reward profile is unfavorable, leading to a 'Strong Sell' rating. The company's valuation remains disconnected from reality, necessitating a price correction to make the stock investable again.

BSD Analysis:
Palantir's Q4 2025 report showed strong revenue growth, particularly in the U.S. market, and improved margins. Despite these positive business fundamentals, the stock's valuation is still too high, with a fair value estimate indicating a potential downside risk of around 40%. The company's future growth projections are optimistic, but they do not justify the current high valuation. A tactical sell is recommended as the stock's expected CAGR return does not meet investment hurdle rates.

Pitch Summary:
Oshkosh Corporation is positioned to benefit from a recovery in non-residential construction, expected to pick up in 2026 and 2027. Despite a weaker-than-expected fourth quarter and lower guidance for 2026, the company's fundamentals remain strong, with revenue growth driven by the Access Equipment business. The stock has shown resilience, outperforming some peers in the industrial sector. With expectations of improving non-residential conditions, Oshkosh may still be undervalued, with a potential upside of 15%-20%. The company's strategic focus on electrification and autonomy offers additional growth opportunities in adjacent markets.

BSD Analysis:
Oshkosh's recent performance reflects challenges in the construction cycle, yet the company's diverse portfolio and strategic initiatives in electrification and autonomy provide a solid foundation for future growth. The company's ability to leverage its core technologies into new markets, such as agriculture and off-highway vehicles, could enhance its competitive edge. While there are risks, including potential changes in government contracts and economic conditions, Oshkosh's strong order backlog and positive book-to-bill ratios indicate robust demand. The company's focus on improving margins and free cash flow further supports its long-term growth potential.

Pitch Summary:
MGIC Investment Corporation has shown solid performance with an 8% gain over the past year, although shares have recently dropped by 10% from their highs. The company reported mixed earnings for Q4 2025, with EPS beating estimates but revenue declining slightly. MGIC's profitability is supported by its 'back book' of policies written before 2021, which are loss remote due to significant home price appreciation. However, newer policies from 2022 onwards show higher delinquency rates, indicating potential future losses. The company has a strong balance sheet and continues to execute share buybacks, but the gradual roll-off of its most profitable policies suggests that peak earnings may have passed.

BSD Analysis:
MGIC's financial health remains robust, with $2.5 billion in excess assets and $1.07 billion in liquidity at the holding company level. The company's ability to dividend $400 million from its operating company supports ongoing buybacks and dividends, stabilizing EPS despite potential earnings pressure. While MGIC's core earnings power is valued at approximately $27.50 per share, the market's perception of rising losses and the roll-off of profitable policies may limit multiple expansion. The stock's valuation at ~9x 2026 earnings appears reasonable given the circumstances, but the limited upside potential suggests a cautious approach. Investors should consider buying closer to $25 and taking profits above $29, aligning with the company's current trading range.

Pitch Summary:
Eurofins Scientific SE has shown a strong performance with a 45% return in US dollar terms in 2025. Despite weak organic growth due to a subdued biopharmaceutical market, the company has managed to grow its revenue and earnings per share at mid-single and low double-digit rates, respectively. The company has been addressing past challenges such as the decline in COVID testing revenues and inflation impacts by improving operational efficiency. CEO Gilles Martin's operational improvement plan has led to a significant increase in operating margins. The company is also investing in IT improvements to enhance security and efficiency.

BSD Analysis:
Eurofins' strategic focus on operational improvements and cost management has resulted in a 200 basis point increase in operating margins since 2023. The company's efforts to decentralize its IT infrastructure and implement a new Laboratory Information Management System are expected to reduce risks and improve efficiency. Adjustments in executive compensation have prioritized working capital management, leading to improvements in this area. The resolution of related-party conflicts and the maturation of its lab network are expected to further enhance margins and free cash flow conversion. Trading at over 20 times forward earnings, Eurofins presents an attractive investment opportunity.

Pitch Summary:
Beiersdorf is a durable consumer-staples company with a strong moat built on brand trust, habitual consumption, and distribution advantages. The company's governance is anchored by Maxingvest, which ensures continuity and long-term stewardship. Despite current market challenges and slower growth projections, Beiersdorf's core business remains intact, presenting an attractive entry point for investors. The company's focus on R&D, particularly in its Derma segment, and its strategic distribution relationships further solidify its competitive position.

BSD Analysis:
Beiersdorf's historical resilience through global disruptions, such as World Wars and takeover battles, underscores its robust business model. The company's strategic alignment with Maxingvest provides stability and reduces the risk of short-term governance issues. While the current market environment poses challenges, particularly in premium beauty segments, Beiersdorf's focus on core strengths and disciplined capital management positions it well for future growth. Investors should monitor potential risks such as brand trust erosion and strategic missteps, but the company's long-term fundamentals remain strong.