Investment Pitches

Pitch Summary:
Adyen is a foundationally innovative company in the payments industry, with a superior business model that integrates payments, data, and banking services on a single platform. Its land-and-expand strategy and efficient management style, led by a visionary co-CEO, position it well for continued growth. The company's strong balance sheet and relatively low valuations make it an attractive investment opportunity.

BSD Analysis:
Adyen's business model bypasses the inefficiencies of the legacy payments industry by building a new system from the ground up, allowing it to offer lower take rates to businesses. The company's strategy involves expanding existing partnerships into new markets, leveraging its globally-applicable architecture. Adyen's strong growth metrics, including a 36.46% year-over-year revenue growth and a net income margin increase from 33% to 45% over the past decade, highlight its exceptional performance. The company's significant cash reserves provide a buffer against market volatility, while its valuation, trading at 33x next year's earnings, is attractive compared to peers. Risks include potential competition from stablecoins and Stripe, but Adyen's innovative approach and strong market position mitigate these concerns.

Pitch Summary:
TeamViewer SE is an attractive investment due to its strong free cash flow yield of over 10%, its negative correlation with major U.S. tech indices, and its undervaluation in the market.

BSD Analysis:
TeamViewer SE presents a compelling opportunity as it operates in the SaaS sector, which is less influenced by the current AI boom and its associated risks. The company's stock has been underperforming, leading to a more attractive valuation compared to its peers. With a focus on European markets, TeamViewer offers a unique opportunity to diversify away from the heavily AI-focused U.S. tech sector. The company's strong cash generation and profitability provide a margin of safety, making it a solid pick for investors looking for idiosyncratic tech plays. Furthermore, its lack of correlation with U.S. large-cap tech stocks offers protection against potential downturns in the broader tech market.

Pitch Summary:
Super Micro Computer, Inc. (SMCI) is positioned as a key player in the AI infrastructure boom, serving as a critical supplier of high-performance servers optimized for AI workloads. The company is benefiting from strong industry tailwinds, including a surge in demand for AI servers and new product cycles like Nvidia's Blackwell GPUs. Despite recent volatility and past concerns over financial controls, SMCI's robust revenue growth and strategic initiatives like the Data Center Building Block Solution (DCBBS) support a bullish outlook.

BSD Analysis:
SMCI's strategic positioning in the AI ecosystem is bolstered by its partnerships with major chipmakers like Nvidia and AMD, allowing it to integrate cutting-edge processors into its server systems. The company's recent 47% revenue growth and guidance for $33 billion in FY2026 revenue highlight its strong operational performance. SMCI's valuation remains attractive, trading at a discount compared to sector medians, despite its faster-than-average revenue growth. While past accounting issues have been addressed, the primary risk remains potential fluctuations in hyperscaler capital expenditures. However, the ongoing AI boom and strategic initiatives like DCBBS provide a solid foundation for future growth.

Pitch Summary:
EPHE offers a compelling risk/reward profile for long-term investors due to its attractive valuations and solid fundamentals of the underlying companies. Despite its underperformance compared to broader emerging market indices, the ETF's current valuation levels present an opportunity for patient investors.

BSD Analysis:
The iShares MSCI Philippines ETF (EPHE) is positioned as a value investment in the context of an exuberant market environment. With a P/E ratio around 12, it is attractively priced, especially given the high-quality cash flows and earnings growth of its top holdings. The ETF's dividend yield, although low for its P/E ratio, has shown a growth trajectory since 2011. However, risks such as currency depreciation and geopolitical factors are notable, with the Philippine peso having declined against the USD over the past decade. Despite these risks, the ETF's focus on a growing middle class and a young population in the Philippines supports its long-term growth potential.

Pitch Summary:
NuScale Power Corporation is positioned as a leader in the small modular reactor (SMR) space, with its design being the only one approved by the US Department of Energy. The company recently secured a significant agreement with the Tennessee Valley Authority to deploy reactors, capitalizing on increasing electricity demand. Despite being unprofitable, the company's first-mover advantage and strategic partnerships present a compelling investment opportunity in the nuclear energy sector.

BSD Analysis:
NuScale Power Corporation has made significant strides in the nuclear energy sector by securing a landmark agreement with the Tennessee Valley Authority to deploy its reactors, aiming to establish a 6 GW baseline for their grid. This agreement highlights the company's strategic positioning and the growing demand for reliable energy solutions, especially in areas experiencing increased electricity demand due to data center construction. However, investors should be cautious of the company's current unprofitability and high valuation, as these factors present substantial risks. The company's reliance on stock issuance for revenue generation could lead to shareholder dilution, and its high price-to-sales ratio indicates speculative investment. Despite these concerns, the political climate favoring nuclear energy and NuScale's first-mover advantage provide a promising outlook for long-term growth.

Pitch Summary:
ADT Inc. was added to the portfolio due to its strong earnings and cash flow metrics, which are key valuation measures for the fund. The stock also offers a 2.6% dividend yield, slightly above average in the stock-ranking universe. Despite below-average performance over the past five to seven years, ADT ranks in the top 5% of the fund's universe, making it an attractive investment.

BSD Analysis:
ADT Inc. stands out in the Consumer Discretionary sector due to its strong financial metrics, including earnings and cash flow, which align with the fund's valuation-focused strategy. The company's dividend yield adds an income component to the investment, appealing to value-focused investors. Despite historical underperformance, ADT's current valuation and ranking within the top 5% of the fund's universe suggest potential for future growth. The investment reflects a strategic overweight in the Consumer Discretionary sector, where the fund finds attractive valuations. ADT's focus on security and smart home services positions it well in a growing industry, potentially benefiting from increased demand for home automation and security solutions.

Pitch Summary:
Applied Energetics is poised for significant growth as it advances its technology readiness level (TRL) to TRL-5, unlocking access to larger funding pools and industrial partnerships. The company's ultra-short-pulse laser technology is uniquely suited to meet the Department of Defense's urgent need for counter-drone solutions, aligning with current defense priorities and budget allocations.

BSD Analysis:
Applied Energetics has made methodical progress since its 2018 reorganization, advancing from TRL-1 to TRL-4. The upcoming Q4 demonstration is a pivotal milestone that could elevate the company to TRL-5, attracting substantial interest from partners and unlocking larger RDT&E funding. The macro environment is favorable, with increased defense spending on counter-UAS technologies. AERG's ultra-short-pulse lasers offer a compact and efficient solution compared to traditional alternatives, positioning the company well for future contracts. The potential market for its PLAID product alone is significant, with additional opportunities in vehicle, shipboard, airborne, and space applications. Despite skepticism around current revenues and valuation metrics, the company's venture-stage status and deep-pocketed backers provide a strong foundation for future growth.

Pitch Summary:
Diversified Energy Company Plc employs a strategy of acquiring mature oil and gas wells, optimizing them to extend their productive life, and selling the output on global markets. The company focuses on environmental stewardship and hedging to stabilize income, while aiming for net-zero emissions by 2040.

BSD Analysis:
Diversified Energy's business model is centered around acquiring and optimizing mature assets, which provides resilience in the volatile energy sector. The company's partnership with Carlyle Group to secure up to $2 billion for future investments highlights its growth ambitions. However, it faces risks such as declining output from mature basins, regulatory pressures, and integration challenges in a fragmented market. Despite its high dividend yield, the business model may not deliver sustained high returns in the long term, especially amid global decarbonization efforts. The company's success will depend on its ability to adapt to regulatory changes and market transitions.

Pitch Summary:
DuPont is spinning off its Qnity unit, which is heavily tied to the semiconductor market, offering strong growth potential and high EBITDA margins.

BSD Analysis:
DuPont's upcoming spin-off of Qnity is set for November 1, with the unit expected to achieve a 6-7% sales CAGR through 2028. The Qnity unit's focus on semiconductors, a market poised for outperformance, positions it well for future growth. With projected FY25 sales of $4.6 billion and 30% EBITDA margins, Qnity offers a compelling investment case. The spin-off allows DuPont to streamline its operations and focus on its core business, while Qnity can leverage its semiconductor exposure to drive growth. Investors will be watching closely to see if Qnity can meet its ambitious growth targets and how the market values the spin-off.

Pitch Summary:
Carl Zeiss Meditec AG is a compelling investment due to its alignment with both Biblical and Salamanca investment principles, emphasizing stewardship, ethical pricing, and long-term sustainability. The company's focus on restoring sight aligns with enduring human needs and societal good, supported by its foundation ownership structure that ensures stability and ethical governance.

BSD Analysis:
The company's majority ownership by the Carl Zeiss Foundation ensures a focus on scientific and societal purposes rather than private enrichment, which aligns with long-term sustainability and ethical governance. Its products serve a fundamental human need—vision restoration—making it a resilient business model. The emphasis on R&D and quality supports its pricing strategy, which is ethically defensible and reflects the true cost and skill involved in production. The foundation model prevents speculative control, ensuring stability and alignment with anti-usury ethics. Overall, Zeiss Meditec's operations harmonize with natural laws and human dignity, making it a strong candidate for long-term investment.

Pitch Summary:
Duolingo is positioned as a 'super app' for education, expanding beyond language learning into areas like chess, music, and math. Despite competition from tech giants like Apple and Google, Duolingo's unique, gamified, character-driven approach to learning sets it apart. The company's mission to make learning universally accessible, coupled with its profitability and user growth, supports a bullish outlook.

BSD Analysis:
Duolingo's expansion into new educational areas demonstrates its ambition to become a comprehensive learning platform. The company's focus on gamification and character-driven content creates a unique user experience that is difficult for competitors to replicate. While there is a risk of becoming a 'jack of all trades,' Duolingo's strong brand and user engagement mitigate this concern. The company's profitability and growth in both revenue and users indicate a solid business model. As more users convert to paid subscriptions, Duolingo's financial performance is likely to strengthen further. The potential addition of PVP features in its chess course could enhance user engagement and retention, further solidifying its market position.

Pitch Summary:
Flywire, another new position, is a good example of this. Flywire contracts with universities to allow their international students to pay tuition easily, in whatever currency they’d like. This sounds at first glance like a simple, commodity business that should have a lot of competition. But the reality is quite different, and Flywire’s superior product for universities and students has resulted in huge market share for international student payments. Our conversations with Flywire’s university customers are universally positive, and in fact not just positive but effusive. University customers praise Flywire’s high-quality customer support and willingness to solve problems, large time savings, automated reconciliation, fewer payment inquiries, and lower pricing for students. Flywire’s stock price has been hit hard by uncoordinated visa restrictions but we believe demand for international education is resilient and shifts geographically rather than declining structurally.

BSD Analysis:
Flywire is a structurally advantaged payments provider with deep vertical integration, strong customer satisfaction, and high switching costs. Its take-rate benefits from cross-border tuition volumes, which should grow as global student mobility normalizes and shifts to less restrictive countries. New product penetration (domestic payments, healthcare) expands TAM. Shares at depressed multiples overlook Flywire’s durable growth, superior unit economics, and high retention.

Pitch Summary:
Recently, two software companies we’ve tracked for years and owned in the past, Monday.com and GitLab, fell from >11x NTM sales at peak earlier in the year to 7x then 5x sales, and at 5x we bought positions in both, as well as added to our existing position in Braze, which traded as low as 3x. Sometimes it’s best not to overcomplicate things.

BSD Analysis:
Braze’s valuation collapse to ~3x sales offers asymmetry for a leader in real-time customer engagement software. With >120% enterprise net retention, strong new logo growth, and a differentiated event-stream architecture, Braze is positioned to benefit from AI-driven personalization and increased marketing automation budgets. Operating leverage should drive meaningful margin expansion. Shares trade at a steep discount to SaaS peers despite superior product reviews and customer stickiness.

Pitch Summary:
The strategic position of GitLab for example (to an acquirer or standalone) seems in fact to be steadily increasing, as more code is created in tools like Cursor and Claude Code, which will then need to be managed, deployed, and secured via a DevOps platform like GitLab (which has only one relevant competitor, GitHub, already owned by Microsoft). Once an organization’s code and software development process are in GitLab, the switching costs are enormous, especially relative to the quite low cost of $350 (Premium) or $1,200 (Ultimate, which has valuable security and compliance features) per engineer per year. GitLab would be an amazing acquisition for a large model provider like Anthropic or Google, cementing their control over the software development process at large enterprises and making their code generation tool far more grounded in total surface area used by developers and sticky.

BSD Analysis:
GitLab holds a critical, defensible position in the software development lifecycle with deep integration, high switching costs, and mission-critical security/compliance features. Shares at ~5x sales understate long-term growth durability as AI-generated code expands the volume of code requiring CI/CD, security, and governance. Consolidation optionality (Anthropic/Google) provides a strategic premium. GitLab’s >130% net retention, expanding gross margins, and accelerating enterprise adoption support a re-rating.

Pitch Summary:
Last quarter I wrote to you about how “An agonizing decision over whether to buy a great software company at 7x sales becomes a relatively easy one at 4-5x sales.” Recently, two software companies we’ve tracked for years and owned in the past, Monday.com and GitLab, fell from >11x NTM sales at peak earlier in the year to 7x then 5x sales, and at 5x we bought positions in both, as well as added to our existing position in Braze, which traded as low as 3x. Sometimes it’s best not to overcomplicate things.

BSD Analysis:
Monday.com’s derating to ~5x forward sales creates an attractive entry for a durable 30%+ grower with expanding margins and strong net retention. Its WorkOS platform continues taking share in workflow automation and enterprise collaboration, supported by rising AI-enabled product adoption. Monday trades below peer multiples despite superior revenue visibility, >120% net retention, and improving operating leverage. Catalysts include enterprise penetration, increased monetization per seat, and continued margin expansion.

Pitch Summary:
Neogen offers a rare chance to buy a strategically important food- and animal-safety testing platform at ~10× FY27 EBITDA after years of execution missteps tied to the large 2022 Reverse Morris Trust with 3M’s Food Safety Division. The integration issues—duplicative manufacturing costs, delays in Petrifilm validation, and an overstretched operating structure—are now entering their final phase, while the company is shedding structurally weaker businesses such as cleaners/disinfectants and evaluating a sale of genomics. The appointment of Mike Nassif, a proven diagnostics operator from Siemens Healthineers, marks a meaningful reset in Neogen’s culture and operational discipline aimed at rationalizing the portfolio, stabilizing margins, and accelerating deleveraging. With the $208mm state-of-the-art Petrifilm facility coming online, CapEx rolling off, and SKU certifications progressing, fixed-cost absorption and free cash flow should improve materially in FY26–27. Valuation sits near GFC troughs despite rising asset value, improved business visibility, and a clear pathway for margin expansion as 3M’s high-margin consumables shift in-house. If Nassif executes on divestitures and completes the Petrifilm transition, the shares could plausibly triple over two years toward a ~$16 target (~22.5× FY27 EBITDA), still below historical strategic multiples.

BSD Analysis:
Neogen offers a rare chance to buy a strategically important food- and animal-safety testing platform at ~10× FY27 EBITDA after years of execution missteps tied to the large 2022 Reverse Morris Trust with 3M’s Food Safety Division. The integration issues—duplicative manufacturing costs, delays in Petrifilm validation, and an overstretched operating structure—are now entering their final phase, while the company is shedding structurally weaker businesses such as cleaners/disinfectants and evaluating a sale of genomics. The appointment of Mike Nassif, a proven diagnostics operator from Siemens Healthineers, marks a meaningful reset in Neogen’s culture and operational discipline aimed at rationalizing the portfolio, stabilizing margins, and accelerating deleveraging. With the $208mm state-of-the-art Petrifilm facility coming online, CapEx rolling off, and SKU certifications progressing, fixed-cost absorption and free cash flow should improve materially in FY26–27. Valuation sits near GFC troughs despite rising asset value, improved business visibility, and a clear pathway for margin expansion as 3M’s high-margin consumables shift in-house. If Nassif executes on divestitures and completes the Petrifilm transition, the shares could plausibly triple over two years toward a ~$16 target (~22.5× FY27 EBITDA), still below historical strategic multiples.