Investment Pitches

Pitch Summary:
iRhythm Technologies, Inc. has shown significant revenue growth and margin improvements, but its high valuation and working capital intensity suggest limited upside. The company has attractive gross margins and growth prospects, but the market is already pricing in a lot of future success.

BSD Analysis:
iRhythm Technologies has demonstrated strong revenue growth, with three consecutive quarters of over 20% year-over-year increases, and improvements in adjusted EBITDA margins. Despite these positive developments, the company's business model remains capital-intensive, with a cash conversion cycle that still averages about two months of revenue. The company's valuation is high, trading at approximately 9x sales and 8x EV/IC, which suggests that the market is already pricing in significant future growth. The investment thesis hinges on the company's ability to continue its growth trajectory and improve its cash flow generation. Until there is more evidence of sustained high returns on capital and reduced investment intensity, the stock remains a hold.

Pitch Summary:
Palantir Technologies Inc. is currently overvalued, with its stock price disconnected from its fundamental earnings potential. The company would need to significantly increase its earnings to justify its current valuation, which seems unlikely given the current market conditions.

BSD Analysis:
Palantir's stock price has surged due to market sentiment rather than fundamental growth, creating a disconnect between its valuation and actual earnings. The company would need to increase its earnings by 13 times to align with its current market cap, which is an optimistic scenario unlikely to materialize soon. Despite recent growth in its U.S. commercial and government segments, the stock's P/E ratio of 570x suggests an overvaluation. Technical analysis indicates resistance at the $187 level, and the stock is unlikely to sustain its current rally without substantial fundamental improvements. A downward correction is necessary for the stock to become a sound investment.

Pitch Summary:
GAINZ is recommended as a buy for investors seeking fixed income with moderate risk, offering a yield above 7% and a price below par, providing stable distributions and potential capital gains.

BSD Analysis:
GAINZ, a baby bond from Gladstone Investment Corporation, is currently trading below its par value, offering a yield to maturity above 7%. This presents a compelling opportunity for investors looking for stable income and potential capital appreciation. The bond's attractiveness is further enhanced by GAIN's diversified portfolio and moderate leverage, which contribute to its financial stability. Despite the inherent risks associated with interest rate fluctuations and credit profiles, GAIN's strong historical performance and current market conditions support a positive investment outlook. Investors should remain vigilant regarding interest rate trends and GAIN's financial health, but GAINZ remains a reliable fixed income choice.

Pitch Summary:
Global X S&P 500 Covered Call ETF (XYLD) offers a compelling option for income-focused investors due to its strategy of selling call options on the S&P 500, which generates high monthly dividends. Despite a slight decline in price value since inception, its total return has averaged 7.11% per year, primarily due to reinvested dividends. The ETF is particularly attractive in anemic or declining markets, where it can significantly reduce losses compared to the S&P 500.

BSD Analysis:
XYLD tracks the Cboe S&P 500 BuyWrite Index, which has historically delivered a stable performance with an average annual return of 7.36% since 1993. The ETF's strategy caps potential gains during market growth but provides a steady income stream, making it suitable for conservative and income-oriented investors. The ETF's low beta of 0.62 indicates a low correlation with the market, offering diversification benefits. However, its expense ratio of 0.60% and index lag of -0.75% are considerations for investors. Overall, XYLD is a strong buy for those seeking to minimize risk and enhance portfolio stability.

Pitch Summary:
GDMN has significantly outperformed since early 2024, driven by its unique strategy of combining gold miners' equities with leveraged gold futures. Despite its impressive returns, the ETF is currently overbought, and a short-term pullback is expected. However, the fund's valuation remains solid, and it could benefit from year-end window dressing.

BSD Analysis:
GDMN's strategy involves allocating $90 of every $100 to gold miners' equity and $90 to gold futures, providing a total of $180 in gold-oriented exposure. This approach has resulted in a 244% increase since its previous mention. Despite its high returns, the ETF's use of leverage and rising volatility in gold miners' shares suggest a cautious approach. The fund's liquidity is a concern, with a high bid/ask spread, and its valuation, while appearing cheap at a 14.1x earnings multiple, may not be as attractive given the cyclical peak in gold prices. Nonetheless, GDMN's strong momentum and potential as an inflation hedge make it a compelling option for investors seeking exposure to gold and gold miners.

Pitch Summary:
Aave is currently facing bearish momentum as it struggles to maintain the $300 level, with significant resistance from its moving averages. Despite its position as a top DeFi lending protocol, it is lagging behind competitors in recent momentum.

BSD Analysis:
The technical indicators suggest a bearish outlook for Aave, with the loss of a rising channel structure and rejection from the EMA cluster confirming downward momentum. The $295 support level is critical, as a break below could lead to further declines towards the $276 zone. Fundamentally, Aave is expanding its ecosystem with integrations like Aptos and partnerships with institutions like Kraken Ink, which could provide long-term growth opportunities. However, regulatory risks and declining retail interest pose short-term challenges. The V4 Liquidity Hub and Horizon RWA markets offer potential for bridging DeFi and traditional finance, but Aave's near-term performance remains tied to broader market trends, particularly Bitcoin's dominance.

Pitch Summary:
Energy Transfer LP (ET) is rated as a Strong Buy by analysts due to its robust valuation, growth, and profitability metrics. The company offers a 7.5% distribution yield and potential for capital appreciation, driven by its comprehensive midstream value chain and exposure to major hydrocarbon streams.

BSD Analysis:
Energy Transfer's integrated asset base spans the entire midstream value chain, providing exposure to all major hydrocarbon streams. Analysts see significant upside potential due to persistent earnings growth from both near-term and future demand-pull sources. The company's strategic positioning in the energy sector, combined with its strong financial metrics, supports its potential for continued growth and attractive returns for investors. The $23 price target reflects confidence in its ability to capitalize on thematic demand trends.

Pitch Summary:
Oracle's cloud infrastructure, particularly designed for AI workloads, is experiencing unprecedented demand, as evidenced by its remarkable RPO growth. The company's strategic focus on AI inferencing positions it as a key player in the future of AI, potentially leapfrogging competitors like AWS, Azure, and Google Cloud.

BSD Analysis:
Oracle's cloud infrastructure is uniquely designed to handle both AI training and inference, offering lower latency and cost efficiency compared to competitors. The company's partnerships with major AI players like Nvidia, OpenAI, and Meta underscore its strategic positioning. However, the significant customer concentration, particularly with OpenAI, and the substantial capital expenditure required to meet demand pose execution risks. Oracle's financial health is also a concern, given its negative free cash flow and substantial debt, which could impact its long-term viability if AI adoption does not scale as projected.

Pitch Summary:
NU Holdings has rapidly scaled from a fintech startup into one of Latin America's largest and most profitable banks, leveraging its digital-first model to disrupt traditional banking. The company has demonstrated strong revenue growth, operational efficiency, and profitability, with a significant market share in Brazil and expanding presence in Mexico and Colombia.

BSD Analysis:
NU Holdings benefits from a strong brand and customer loyalty, with a mission-driven culture focused on financial inclusion. The company has a robust financial position, with high ROE and efficient cost management. However, it faces challenges from increasing competition, particularly from Mercado Pago, and macroeconomic risks in Latin America. Despite these challenges, NU Holdings' strategic focus on customer expansion, product diversification, and international growth positions it well for long-term success.

Pitch Summary:
Molson Coors is positioned for a potential upside with a smart price target of $52.50, supported by a strong brand portfolio and strategic investments. The company has managed its debt effectively and is committed to increasing dividends and buying back shares.

BSD Analysis:
Molson Coors has a robust brand portfolio that includes popular names like Coors, Miller Lite, and Blue Moon, which are well-positioned in the market. The company's recent strategic investments in Fevertree and collaboration with Topo Chico on hard seltzers show a forward-thinking approach to market trends. Despite concerns about its balance sheet and demographic shifts in the economy beer segment, the company's low operating leverage and stable cash flow provide a buffer against potential revenue declines. The stock is attractively priced, offering a good risk-reward balance, especially if the market adjusts to GDP-level growth expectations. However, the company should focus on reducing debt to strengthen its defensive trade classification.

Pitch Summary:
Our second-largest position, AST SpaceMobile ("ASTS"), is a pioneer in space-based cellular broadband that will quite literally change the world should it succeed in its ambitious mission to solve a persistent and universal pain point for mobile users around the globe: eliminating coverage gaps while bringing affordable broadband to billions without basic internet services. As a quick refresher, AST was founded in 2017 by CEO Abel Avellan before going public as a SPAC in 2021. The company's raison d'être is to "connect the unconnected" by providing uninterrupted direct-to-device ("D2D") broadband coverage to everyday smartphones via the world's first and only purpose-built global low earth orbit ("LEO") network for D2D. In short, the company provides satellite-based cell tower services to wireless carriers around the world through basketball court-sized phased array antennas deployed in LEO, a key globally scalable enabling technology set to redefine wireless connectivity on a global scale. The emergence of AST represents a pivotal moment in the evolution of not just the company but the entire telecommunications industry, primarily because AST is not merely iterating on existing technology but is introducing a fundamentally new category of service that aims to bridge the digital divide and provide ubiquitous cellular coverage to underserved populations worldwide. Indeed, if we may be so bold, the company isn't just building a satellite network – it's constructing the final piece of digital infrastructure that will complete a century-long arc toward universal human connectivity. While the stock doubled in June, we continue to hold a substantial position at ~15% of NAV as our conviction that the company remains grossly undervalued based on normalized economics and long-term potential has only grown since we initially built our position last fall. In fact, pretty much since the day we got involved, AST has achieved several critical operational milestones that we believe have fundamentally altered its risk profile and future cash flow potential for the better. Ergo, the company was a standout performer for the quarter, surging 157% year-to-date and a whopping 122% in Q2 alone. However, despite its magnificent run, we remain both heavily invested and highly confident in CEO Abel Avellan and his team's ability to deliver on the company's ambitious roadmap. Indeed, even with the equity at ~$48.84/share (vs. our $17.91/share average cost), only a tiny fraction of the company's future growth prospects are currently reflected in its stock price. While the equity appears expensive on near-term numbers, the reality is Mr. Market remains behind the curve despite the massive outperformance of AST's equity year to date. As I type, our favorite emerging compounder is trading hands at a truly inexplicable 2.75x "steady state" EBITDA, i.e., AST's normalized earnings capacity once its global constellation is fully operational over the medium term.

BSD Analysis:
The manager presents AST SpaceMobile as a transformational investment opportunity in space-based cellular infrastructure. Despite the stock's 157% year-to-date surge, the manager maintains conviction at a 15% portfolio weight, arguing the company trades at only 2.75x steady-state EBITDA. The investment thesis centers on AST's unique direct-to-device satellite technology that enables standard smartphones to connect via LEO satellites, addressing the global digital divide. The manager emphasizes the company's first-mover advantage in this new category and its potential to "change the world" by providing universal connectivity. With $1.5 billion in cash and milestone-based funding from telecom partners, the manager believes AST is well-positioned to reach cash flow breakeven by Q1 2026 with 25 satellites deployed. The analysis suggests the market undervalues AST's normalized earnings potential once its global constellation becomes fully operational, representing a compelling risk-adjusted opportunity despite the recent price appreciation.

Pitch Summary:
Our thesis on Nintendo, the Godzilla of video gaming, is quite simple. Armed with its Apple-like iterative hardware model and software-based ecosystem, as well as a growing active player base and ever-increasing digital sales, the company should generate substantial earnings growth that is decoupled from the "boom-bust" console cycles of old. As a reminder, we've held Nintendo for six years and counting, drawn initially to its absolute and relative undervaluation and fortress balance sheet, alongside its artistic culture, iconic intellectual property, consistent ability to generate high returns on capital, and historic transition from cyclical earnings to secular growth – attributes, mind you, that remain as we type despite how far the current heavyweight champion of the video game industry has come. And yet, despite all its recent success and a 39.8% return in Q2, we believe the market continues to undervalue the long-tail potential of franchises like Mario and Zelda in an expanding digital entertainment landscape, to say nothing of Wall Street's still amusing takes on next-gen hardware and software sales. We'll get to all that shortly, but what should be immediately obvious right out of the gate is Nintendo delivered a blockbuster quarter on August 1st, powered by the Switch 2's record-breaking launch. Results that, yet again, have validated both Nintendo's hybrid Apple-like console strategy and our larger investment thesis, while also demonstrating the company's pricing power and a level of global market penetration with no historical parallel. To be frank, even the "negatives" had a silver lining in Nintendo's latest report, as the temporary margin compression that hit Nintendo's financials should revert sharply as the hardware/software mix normalizes over time and the installed base effect kicks in. In any case, with the launch of the Switch 2, Nintendo began the final stage of its ongoing business model transformation. With an active playing base of 130 million+ users, the largest and most diverse integrated hardware/software ecosystem in all of gaming, over 34 million NSO subscribers, and an industry-leading (historically under-monetized) IP library that continues to shine, getting new life in a rapidly expanding number of movies, theme parks, retail stores, general merchandise licensing, and (we strongly suspect) a whole new crop of blockbuster games from its biggest franchises. In short, the future is bright and should only get better over the next several years at an absolute minimum. With the official launch of the Switch 2 behind the company, Nintendo has embarked on a new era that should see massive and consistent growth that consensus estimates continues to miss. This remains true, even today, after the single best console launch in the history of the industry. As noted in our Q1 commentary, our anticipation of blowout Switch 2 sales starting in June proved to be an understatement. Turns out the Big N sold over 3.5 million Switch 2 consoles in the first four days after its June 5th release date – and a semi-mind-blowing 5.82 million units over the 25-day period through June-end – making it the fastest-selling video game console in not just the company's history, but the industry's. And not by a little, but by a lot. In fact, to do it proper justice, it's fair to say Nintendo's new console was one of the most successful product launches in the history of consumer products and the entertainment space more generally.

BSD Analysis:
The manager presents a compelling bull case for Nintendo based on its successful transition from cyclical console sales to a sustainable ecosystem model. The Switch 2's record-breaking launch validates the thesis, with 5.82 million units sold in 25 days representing the fastest console launch in industry history. The manager emphasizes Nintendo's "Apple-like" iterative hardware approach combined with a growing 130+ million user base and expanding digital monetization through movies, theme parks, and merchandise. Despite the stock's 39.8% Q2 return, the manager believes Wall Street continues to underestimate the long-term value of Nintendo's IP franchises and the company's pricing power. The analysis suggests Nintendo has achieved unprecedented global market penetration while maintaining high returns on capital. The manager's six-year holding period and detailed sales analysis demonstrate deep conviction in the company's transformation from cyclical hardware sales to recurring ecosystem revenues.

Pitch Summary:
PowerFleet (AIOT) is an asymmetric small-cap play on the global fleet telematics and “AIoT” software market. Formed through multiple mergers (Pointer Telocation, MiX Telematics, Fleet Complete), the company now ranks among the top 3 fleet tracking providers globally with 2.6M subscribers and >$400M in annual revenue. The stock trades at deep-value levels due to leverage, messy integration, and skepticism about execution. CEO Steve Towe (ex-Masternaut, Aptos) is integrating the acquisitions onto the company’s “Unity” platform, a device-agnostic SaaS suite for fleet, safety, and logistics management. Management guides for positive FCF by FY26 and ~20% organic growth by FY27. If achieved, valuation could re-rate from ~2x EV/revenue to ~6x (half of peer Samsara’s multiple), implying ~4–5× upside. Near-term catalysts include the November 2025 Investor Day and demonstration of accelerating organic growth. Despite material integration risk, AIOT offers large upside optionality if execution succeeds.

BSD Analysis:
PowerFleet is a complex special situation transitioning from a low-multiple industrial roll-up to a scaled SaaS telematics and AIoT platform. The Unity architecture unifies global fleet data into one analytics layer, enabling predictive insights and subscription revenue growth. Execution on integration and FCF conversion could transform valuation from an industrial hardware multiple to SaaS peer levels, with potential 4–5× upside if adoption accelerates. The market underappreciates management’s operational background and the cross-device moat forming through embedded data. While leverage and integration risk are non-trivial, recurring ARR growth and cost synergy realization provide clear proof points. The risk/reward remains asymmetric given depressed EV/sales and substantial operating leverage to software mix.