Investment Pitches

Pitch Summary:
Micron Technology has demonstrated strong financial performance with a significant beat on both revenue and earnings, driven by robust demand and pricing for its memory chips. The company's outlook remains positive, particularly due to the surging demand for AI-related products, which is expected to continue driving growth.

BSD Analysis:
Micron's strong performance is largely attributed to the increasing demand for memory chips used in AI applications, which have seen a resurgence. Despite challenges in the consumer segment, particularly in traditional memory markets like PCs and smartphones, Micron's strategic focus on AI positions it well for future growth. The company's bullish guidance reflects confidence in sustained pricing power and demand. Investors should note that while the broader semiconductor industry faces cyclical risks, Micron's alignment with AI trends offers a compelling growth narrative. Additionally, the company's financial health, evidenced by its earnings beat, suggests resilience against macroeconomic headwinds.

Pitch Summary:
@realroseceline argues that GLBE’s low reported margins are a byproduct of the merchant-of-record model, which incorporates pass-through costs that distort margin optics. Adjusting for these, GLBE earns a 1.5–5% take rate on GMV with a capital-light, scalable structure. They believe the infrastructure required to compete creates a deep moat, reinforced by Shopify’s decision to partner instead of compete. As volumes scale, GLBE’s unit economics improve through operational leverage and better carrier economics. With cross-border ecommerce growing faster than domestic ecommerce, the company has a long secular runway. On modest margin expansion, @realroseceline believes GLBE could exceed $400M of EBITDA within five years, supporting a ~$10B valuation.

BSD Analysis:
GLBE’s merchant-of-record architecture embeds significant regulatory and logistical barriers to entry, giving it competitive resilience. Its capital-light model enables margin expansion as volume scales, while global infrastructure creates switching costs for merchants. The company benefits from the secular rise in cross-border ecommerce, though macro cycles may affect near-term demand. Shopify’s partnership underscores the difficulty of replicating GLBE’s footprint. Risks include regulatory change, platform dependence, and international shipping volatility. If execution remains strong, GLBE could transition toward more software-like margin characteristics over time.

Actual Post Content:
Don’t Be Fooled by $GLBE Low Margins Why $GLBE business model is stronger than it looks At first glance, $GLBE doesn’t look like a high margin business. Gross margins hover around 35-40%, and EBITDA margins are in the mid teens. For a high growth tech company, those numbers might raise an eyebrow. But dig a little deeper, and you’ll realize something important: $GLBE margins look low by design, not by weakness. In fact, $GLBE moat is embedded in those very numbers. The Misleading Math of a 'Merchant of Record' $GLBE isn’t a typical software platform. It’s what’s called a merchant of record (MoR) for global ecommerce. That means it doesn’t just facilitate cross border transactions, it takes full responsibility for them. Every international order that flows through $GLBE comes with: 1. Localized pricing in 150+ currencies 2. Duties and tax collection 3. Shipping and last mile delivery 4. Customs compliance 5. Fraud prevention 6. Returns and customer service These are all messy, country specific, regulation heavy problems that merchants don’t want to deal with, and $GLBE handles it end to end. Because of this, $GLBE revenue includes a lot of 'pass-through' money (taxes, shipping fees, duties), which they collect but don’t keep, it inflates the revenue line while making margins look thinner than they really are. Their real 'take rate' is about 1.5-5% of GMV, depending on the level of service. On a per dollar basis, that’s not huge, but at scale, it can be powerful. Margins Hide the Moat The very reason margins look low is also why $GLBE is hard to disrupt. To replicate what $GLBE has built, you’d need: 1. Local tax registrations in 200+ countries 2. Real time pricing and checkout in dozens of languages 3. Local return hubs 4. Fraud and risk engines that operate across borders 5. Partnerships with customs, logistics, and payment providers worldwide This isn’t just software, it’s infrastructure like regulatory, operational, financial, etc. It takes years and massive capital to build. And even Shopify decided it was easier to partner with $GLBE than compete directly. That’s the moat! Unit Economics Still Matter Despite the optics of 'low margin,' $GLBE runs a capital light model. There’s no inventory. No warehouses. No physical goods. As volume scales, its cost base stays relatively flat. And as its customer base grows, the company gains leverage over carriers and processors, improving unit economics quietly behind the scenes. Add to that the fact that cross border ecommerce is growing faster than domestic ecommerce, and $GLBE is riding a long term secular trend. (Somewhat reminiscent of $DLO). What Looks Like a Bug Might Be a Feature In short, don’t judge $GLBE by surface margins alone, they are a product of the business model, not a sign of weakness. In fact, those margins tell you something important, GLBE does the hard stuff no one else wants to do. And that’s exactly why it’s hard to compete with. What This Could Look Like in 5 Years If $GLBE keeps compounding GMV and expands margins modestly, it could do $400M+ in EBITDA within 5 years. At a 20–25x multiple, that supports a ~$10b valuation, a 70–100% upside, or a mid teens return.

URL: https://x.com/realroseceline/status/1944782756132880602

Pitch Summary:
@evrgn11112231 argues B&M is deeply mispriced due to cyclical LFL issues and currently trades at only 7.5× street earnings or ~8.5× on their conservative numbers. They expect LFLs and store growth to resume, supporting significant earnings recovery. With market expectations washed out, they see well over 100% upside. The sharp selloff on a slight LFL miss is viewed as an overreaction given LFLs have already turned positive. Management remains focused on margin protection, with operational improvements coming. Overall, this represents the largest valuation disconnect among companies they follow.

BSD Analysis:
B&M benefits from a value-driven retail model with strong store economics and potential for continued market share gains. The central question is whether recent margin pressure is temporary or structural. Management appears disciplined on pricing, which supports margin durability but must be validated in future updates. If LFLs normalize, the business could exhibit meaningful operating leverage and re-rate toward discount retail peers. Risks include consumer weakness, FMCG pricing volatility, and competitive intensity. Still, the setup offers asymmetric upside should execution stabilize.

Actual Post Content:
$BME.L This company reports earnings tonight US time (am in the UK). My second biggest position. Been an absolute dog over the last year as they've been missing LFLs on what I think are mostly cyclical issues. Stock has been left for dead and is trading at 7.5x earnings on street numbers (which are probably a little too high). Street bracing for a big margin reset - my estimates are lower than lowest sell-sider but still only trading at ~8.5x PE! And should grow both LFL and stores from here. I think stock easily has well over >100% upside. Who knows how it will trade shorter term, but this is the biggest valuation disconnect by far of anything I own or follow. Stock puked this morning on slight LFL miss (which now has turned positive). Was down 14% this am, nibbled a little. Now -7%. CEO essentially said 'don't worry I'm not going to trash margins on price cut' but recognized some things operationally and on FMCG pricing that could be sharpened. Full update in Nov. Def an overreaction. I feel the same way about US retail! Always funny - easier to invest across borders in that sector IMO as less biased.

URL: https://x.com/evrgn11112231/status/1944904672227029079

Pitch Summary:
The author argues Air Water is undervalued at 9× forward earnings and trades at a roughly 40% SOTP discount. In the downside case, growth may track GDP, producing 5–6% earnings growth plus a 3.5% dividend. Management’s target of 10% profit growth would drive double-digit total returns when combined with the dividend. A peer-multiple re-rating could further boost upside. Overall, the pitch presents a low-risk, valuation-backed opportunity with asymmetry to the upside.

BSD Analysis:
Air Water operates within the industrial-gases segment, which enjoys high barriers and consistent contract-driven cash flows. The large SOTP discount suggests significant hidden asset value typical of Japanese conglomerates. Diversification adds stability but may suppress margins relative to purer industrial-gas majors. Potential catalysts include portfolio simplification, divestitures, or stronger capital allocation. Dividend yield offers a floor, while execution toward 10% profit growth could unlock multiple expansion. The setup provides an appealing risk-reward mix for value-oriented investors.

Actual Post Content:
Air Water trades at 9x forward P/E with a 3.5% dividend yield. Conservatively, I arrived at a 40% discount to sum-of-the-parts (you can dig deeper into non-core assets and the discount could be even wider, but I haven’t even gone that far). Worst case, you might be looking at a 5-6% grower (assuming profit growth at GDP rate + collect 3.5% dividend yield). Best case is you get 10% profit growth (management’s target) + 3.5% dividend yield + re-rating to global peer-like multiples drives additional upside.

URL: https://x.com/EastAsiaStocks/status/1944606217508122902

Pitch Summary:
Cameco – A World Class Uranium Producer Cameco is the 2nd largest uranium producer in the world with ~17% market share, preceded by Kazatomprom, which has ~20% market share. Cameco offers an attractive pure-play opportunity to invest in the high-demand for nuclear energy within the safe jurisdiction of Canada. It has a diversified uranium business due to its vertically integrated business model. It provides fuel products and services across the nuclear fuel cycle from exploration, mining, milling, refining and conversion. Cameco has some of the world’s best grade and lowest cost mines in the world. It operates tier 1 mines that have a licensed capacity to annually produce over 30 million pounds of uranium, which can be used to power millions of homes each year. It is the world’s third largest company based on reserves with over 457 million pounds of proven and probable uranium reserves. Two of its world-class production mines are located in northern Saskatchewan. McArthur River is the world’s largest high-grade uranium mine and mill that has an expected mine life of until 2043. In 2024, Key Lake mill set a new world record for annual production. Cigar Lake is the world’s second largest high-grade uranium mine that has an expected mine life of until 2036. Both mines have uranium grades (concentration of uranium) that significantly surpass that of its competitors. For instance, Cigar Lake has proven grades of 16.68% and McArthur River has proven grades of 6.81%, while its next largest competitor, Kazatomprom, has average grades of only 0.04% to 0.10%. This divergence in grades demonstrates the quality of Cameco’s world-class assets. To further supplement its own home-grown uranium, Cameco has partnered with Kazatomprom on a joint venture, which gives Cameco uranium production from Kazakhstan. Cameco will build long-term contracts by layering in volumes over time. Its customer contracts have a mix of base-escalated pricing and market related pricing (floor and ceilings) that enables it to benefit from increasing uranium prices, while also having downside protection when the uranium price decreases. Cameco has a strong pipeline of long-term customer commitments which provides greater visibility and predictability of the business. For instance, Cameco has commitments to provide an average of 28 million pounds of uranium per year from 2025 to 2029, in addition to ongoing discussions with existing and prospective customers to grow its contract pipeline. Cameco complements its nuclear value chain with its Fuel Services and Westinghouse Electric businesses. Cameco is the world’s largest commercial uranium refinery. Its commercial refinery has about 21% of the world’s uranium primary conversion capacity. The Port Hope Conversion Facility is one of only four commercial suppliers of uranium hexafluoride, which is used in uranium enrichment, in the western world. In November 2023, Cameco entered into a strategic partnership with Brookfield Renewable Partners to acquire a 49% ownership of Westinghouse Electric. Westinghouse Electric develops nuclear reactor facilities and technology. It designs and fabricates highly engineered bespoke nuclear reactors. For instance, Westinghouse develops SMR technology that uses the same technology as its larger nuclear facilities. Complementing its nuclear asset business, Westinghouse has a nice recurring revenue business by offering aftermarket products and services, such as engineering and outage and maintenance services. This enables the company to have a predictable and consistent stream of revenue and cashflow from its long-term customer relationships. For instance, 1 in 2 of the nuclear fleet in the world receives services from Westinghouse. Warren Buffet once shared that the three criteria he uses for evaluating a management are integrity, intelligence and energy - all 3 of which are characterized by Cameco’s management team. Cameco has a disciplined management team with a long-term mindset that has enabled the company to persevere through the doldrums of the nuclear industry’s lost years. When uranium prices are high, management had the self-restraint to not flood the market with uranium and correspondingly drive down prices. Instead, the company has been focused on long-term value creation by preserving its high grade, low-cost production assets by waiting for attractive long-term pricing. This has enabled the company to become well-positioned to take advantage of the current nuclear energy boom. Amid rising global energy demand, Cameco is well-positioned to benefit from the growing need for nuclear energy for years to come. Since Rocklinc Partners Fund initiated its position in Cameco in February 2024, the stock has risen by over 45%. We plan to increase our stake as valuations become more attractive.

BSD Analysis:
Cameco is the uranium titan finally getting the supercycle it’s been waiting a decade for, and the market still hasn’t fully processed how asymmetric this setup is. Years of underinvestment and mine closures created a structural supply deficit just as global energy policy swung back toward nuclear. Cameco’s restart of McArthur River gives it optionality that competitors simply don’t have, and its long-term contracts are now resetting at far higher prices. The West’s pivot to secure, non-Russian fuel supply puts Cameco in the geopolitical sweet spot. The company’s acquisition of Westinghouse adds vertical integration that could redefine its earnings profile over the next decade. Bears fixate on operational hiccups, but in a constrained uranium world, Cameco doesn’t need perfection — it needs scarcity, and scarcity is locked in. This is a cycle where the low-cost, secure supplier wins big, and Cameco is sitting in the throne.

Pitch Summary:
RH became a lightning rod for tariffs in April… tariffs created headline risk, but “as of this writing, stable future tariff rates have been established… which have taken the worst-case scenarios off the table.” RH pushed through high-single-digit to low-double-digit price increases to offset gross profit pressure. With the most significant headline risks behind us, “we see a cleaner operating environment going forward which should allow RH to resume and sustain its double-digit growth for years to come.”

BSD Analysis:
RH is the luxury home brand masquerading as a furniture retailer, with aspirational showrooms and pricing power few can match. Housing softness hurts near-term sales, but RH’s model isn’t about volume — it’s about high-end design and lifestyle positioning. International expansion and hospitality concepts offer new vectors of growth. Margins remain strong due to premium price points and disciplined merchandising. Capital-intensive galleries add risk but also fortress branding. RH is a bet on luxury spending and home design cycles. High conviction if you believe in the brand’s global runway.

Pitch Summary:
Below is our quarter-end portfolio… Cogent Communications was our largest detractor year-to-date at –6.9%. However, the large negative contributions from both Cogent and RH have been frustrating. Both are down for valid reasons, but I nonetheless expect great results from these companies over the coming years and they should become meaningful positive contributors to performance.

BSD Analysis:
Cogent is the quirky, ultra-efficient IP transit provider that sells bandwidth cheaper than almost anyone while generating enviable cash flow. Its network is built for simplicity, not legacy bloat. While telecom giants chase 5G and high capex, Cogent just keeps adding traffic at high incremental margins. The Sprint wireline acquisition is a complexity jump, but also a large opportunity. Cogent’s business is predictable, recurring, and surprisingly sticky. Dividend growth and buybacks drive shareholder returns. A telecom oddball — and a very profitable one.

Pitch Summary:
Followers of Recurve know that we have had a position in Carvana for many years. It has become our largest position by far and every decision not to sell despite its elevated concentration has been highly accretive to our performance. It’s also the position that has caused me to lose more sleep and learn more about myself as an investor than any other company in my 20+ year career. Carvana offers a useful canvas to explore how I apply a decision tree framework to help navigate investment decisions. In 2022, when the stock declined –99%, the market believed bankruptcy was a foregone conclusion… In 2023, Carvana started turning around its business… In 2024 and early 2025, Carvana began to stabilize its industry-leading unit economics while returning to growth rates that far exceeded analysts’ expectations… As we look forward, Carvana has a proven best-in-class business model and is now performing solidly in the upper half of the tree. We expect the tree to keep growing taller… The combination of removing the bottom branches while not sacrificing the growth of new upper branches is what allows us to hold an extraordinarily large position in Carvana.

BSD Analysis:
Carvana executed one of the wildest operational turnarounds in recent memory, going from near bankruptcy to a structurally profitable used-car marketplace. Its restructured debt load and improved unit economics give it real staying power. The shift to profitability came from tighter inventory discipline, lower SG&A, and smarter pricing algorithms. Carvana’s brand and online-first experience still resonate with consumers. Macro volatility in used cars remains a major swing factor. If management maintains discipline, the equity retains enormous torque. Still risky, but now a plausible long-term platform instead of a meme stock.

Pitch Summary:
The market’s current sentiment toward Chinese equities has created a significant dislocation between Alibaba’s intrinsic value and share price. After reaching a 52-week high of nearly $150 in late March, Alibaba’s ADRs fell over 30% to under $100 and remain near this significantly undervalued price. Given our portfolio’s exposure through multi-year option contracts, this volatility produces material mark-to-market price swings. However, these low prices are temporary, and the price today is not reflective of the company’s underlying fundamentals. Alibaba has the capacity to generate and return enormous amounts of cash to shareholders in the coming years. The recent sell-off reflects regulatory uncertainty, tariff speculation, guidance noise, and delisting headlines. Behind the scenes, President Xi Jinping’s February symposium with technology leaders including Jack Ma suggests potential regulatory relief from Beijing’s multi-year regulatory crackdown. Alibaba is characterized as a cash-rich, free-cash-flow compounder with global growth in e-commerce, cloud, and AI. As sentiment normalizes, we expect the ADR price to double reaching $200 in 2028, driven by growing free cash flow and multiple expansion combined with robust share repurchases. Alibaba’s management is returning substantial capital to shareholders. The company approved a $2.00 per ADR dividend during Q2 (a $4.6 billion distribution) and repurchased $805 million of its own stock, delivering over 2% in cash to shareholders in a single quarter. With $19 billion more authorized for buybacks, we expect this aggressive return of capital to continue for the next two years. The company’s valuation remains exceptionally compelling. By adjusting its $250 billion market capitalization for $25 billion in net cash and its $67 billion investment portfolio (including Ant Group), the core operations enterprise value (EV) is just $158 billion. This amounts to just ~6x EV/EBITDA on its 12-month trailing $26 billion, about half the ~12x median for mature tech firms. Free cash flows are growing, yet the market has priced Alibaba as if it is in decline. The stock price swings will be volatile; however, the upward trajectory is clear, and we anticipate strong performance from Alibaba in the coming quarters and years.

BSD Analysis:
Alibaba is China’s dominant e-commerce and cloud ecosystem, but regulatory shocks and macro fears have crushed sentiment far below intrinsic value. The core marketplace still prints money, and cloud has meaningful long-term upside as AI demand accelerates domestically. Cost discipline and restructuring have stabilized earnings. Competition from PDD and Douyin is real, but Alibaba still owns massive logistics, consumer data, and merchant relationships. The balance sheet is fortress-level and buybacks are finally material. Sentiment will always be volatile due to China macro, but fundamentals remain intact. A misunderstood, highly cash-generative tech giant.

Pitch Summary:
NLOP boosted the portfolio by about 1.5% in Q2. The company recently sold their vacant Woodlands, TX property and appears close to selling their Google, JPM Dallas, and PPD buildings. Combined sales should generate more than $100M for shareholders. I expect NLOP will trade near a 20% aggregate cap rate after these sales complete, with many valuable properties left to sell. During Q2, we delivered a letter to the NLOP board sharing rationale for adopting a share repurchase program in lieu of dividends, if the stock trades at an observable discount to their assets’ fair value. Regardless, we expect a buyback or dividend to catalyze more investors to calculate the fair value of these assets.

BSD Analysis:
Net Lease Office Properties is a REIT born into the worst narrative in real estate—suburban and secondary-market offices—wrapped in long-term net leases. The bear case is obvious: work-from-home, capex-heavy re-tenanting, and lenders who hate the asset class. The bull case is more nuanced: long lease terms, decent credit tenants, and the possibility that management slowly sells, restructures, or repurposes assets while collecting cash along the way. This isn’t about growth; it’s about harvesting contractual income and managing roll-down risk intelligently. Any upside surprise in office utilization or capital markets sentiment is gravy. The equity will trade like a distressed special situation, not a normal REIT. You buy this if you’re comfortable underwriting ugly headlines in exchange for a big discount to underlying cash flows.

Pitch Summary:
Magnera Corporation (MAGN) created roughly a 3% headwind to our aggregate Q2 returns. The company reduced production expectations during the quarter due to tariff uncertainty, but their market-leading position, termed-out debt, and continued insider buying remain unchanged. We successfully used put options to mitigate nearly half of MAGN’s downside during the quarter, as discussed in our Q1 letter. We still believe MAGN trades at a trough multiple on trough earnings, with significant room to grow their earnings power.

BSD Analysis:
Magnera is the post-restructuring version of Glatfelter, now mashed together with Berry Global’s nonwovens and hygiene films business—a classic “industrial plus spin plus leverage” story. The new entity sits right in the middle of nonwovens used for wipes, hygiene, medical, and specialty industrial applications, all of which have steady, if unglamorous, demand. Management took on real debt to get here, so the thesis is simple: integrate hard, run plants better, and use cash flow to delever before the cycle turns. If they nail synergies, Magnera emerges as a scaled, higher-margin platform in a niche where customers value reliability over fashion. If they don’t, you’re looking at another overlevered packaging/materials name grinding through a balance sheet. The market usually misprices these “newco” setups for a while, which creates room for upside if execution is even decent. You’re effectively underwriting a process story more than an end-market boom.

Pitch Summary:
In early June, United Natural Foods (UNFI) hit a significant speedbump when a cyber-attack shut down most company systems. The outage lasted approximately ten days, but the impact was contained, and systems have resumed activity. The stock remains depressed despite the company confirming their cyber insurance should effectively mitigate event costs. Furthermore, the company accelerated their long-term guidance, showing their business transformation is exceeding plan. We’re perplexed that the stock remains at $22 despite the cleared air, after trading above $32 right before the event. This created another ~1% Q2 headwind, but we view the June earnings release and management commentary as the best evidence yet that their turnaround is gaining momentum, not losing it. UNFI will provide a financial update in July to further quantify the cyber attack’s financial impact. We expect them to guide well above the $600M EBTIDA the street currently expects for FY26, while further reducing cyber-attack concerns.

BSD Analysis:
UNFI is the plumbing of the natural and organic food supply chain, with Whole Foods as the anchor tenant and thousands of independents riding shotgun. The extended distribution agreement with Whole Foods into 2032 gives rare long-term visibility, even if that concentration keeps investors twitchy. Margins are wafer-thin because distribution is a scale game, but UNFI’s network of DCs and private-label capabilities offers levers when management gets aggressive on mix and efficiency. Cyber incidents and operational hiccups remind you this is a low-margin, high-complexity logistics business, not a cloud company. Still, as consumers keep shifting toward “better for you” food, volume flows through UNFI’s pipes. The equity works when they prove they can turn that volume into sustainable free cash flow and de-risk the balance sheet. This is a grind-it-out operator where even small efficiency wins matter a lot.

Pitch Summary:
Our most “tariff sensitive” investment, a.k.a. Brands (AKA), historically sourced most products from China. With 145% tariffs on China briefly enacted, their business faced tremendous uncertainty. However, management continued their pattern of strong execution, diversifying sourcing throughout the year to soften future tariff impacts. Their outlook remained largely unaffected, with sales growing and consumer demand staying robust across product lines via new U.S. retail locations and their wholesale deal with Nordstrom. We believe AKA will leverage their scale to achieve double-digit EBITDA margins, generate cash, and ultimately validate management’s incentive awards (earned at 10-20x the current stock price). Despite stellar execution, AKA finished down for the quarter, adding roughly a 1% headwind to returns.

BSD Analysis:
a.k.a. Brands is a portfolio of social-media-native fashion labels selling directly to Gen Z online, which is exactly where the growth is—but also where competition is vicious. Brands like Princess Polly and Culture Kings give it real awareness, yet the whole model lives and dies on fast merchandising cycles and influencer-driven traffic. The company overextended into growth right as the DTC hype cycle cracked, and now it’s in cleanup mode: rationalizing costs, pruning underperforming initiatives, and nursing leverage. If management can stabilize traffic and gross margins while keeping marketing spend under control, earnings power looks very different in a couple of years. But this is a turnaround, not a victory lap—the risk is that the brands age out of relevance faster than the balance sheet heals. Upside is there if the portfolio behaves like a collection of cash-flowing labels rather than a venture experiment. You’re betting on ruthless execution in a noisy category.

Pitch Summary:
Airbus (Long +10%) shares rose as investor concerns over the U.S. tariff impact and the global supply chain disruption moderated. Airbus delivered a solid business update at the Paris Air Show in June, noting a broad-based supply chain improvement which should help support a stronger production ramp up in the second half of 2025 and beyond. The margin on Airbus’ most profitable A320 family of aircraft will continue to improve as larger variants such as the A321XLR continue to gain strong traction from customers. The defence segment of the business is also expected to see faster growth over the long term, given Airbus’ role as a key partner on multiple critical E.U. defence programs and a structural step-up in E.U. defence spending. At the Paris Air Show, Airbus received gross new orders for over 200 aircraft, extending its backlog visibility well beyond 2030. Looking forward, we believe the company will benefit from continued strong demand for its more fuel-efficient aircraft, its leading position in a duopoly market and the structural growth in the European defence sector.

BSD Analysis:
Airbus is the undisputed, high-quality commercial aircraft oligopolist whose stock is a conviction bet on the multi-decade supercycle in air travel demand. The core thesis is driven by narrow-body scarcity, which grants the company exceptional pricing power and visibility into revenue for many years. The company has an order backlog totaling 8,665aircraft (as of September 2025), securing production lines for well over a decade. The growing share of the A321neo and the longer-range A321XLR—which provide higher margins—is set to structurally improve average pricing and profitability.

Pitch Summary:
Qantas (Long +19%) continued its strong share price performance during the quarter as robust trading conditions persisted and the oil price remained at weaker levels (other than a short spike during the Israel-Iran conflict). Qantas shares have now more than doubled from the lows in October 2023, reflecting continued strong earnings delivery, management and board changes and the removal of many ‘pain points’ for customers. On 24 June, Virgin listed on the ASX. As a listed stock, Virgin will face increased scrutiny of its financial performance, which should encourage rational competitive dynamics going forward.

We believe Qantas remains very well placed over the medium term. It has two well-positioned brands in Qantas and Jetstar that serve their relevant markets strongly. In addition, it operates Australia’s best loyalty business, which is expected to double earnings over the next 5–7 years. Finally, Qantas has a raft of new fuel-efficient aircraft to be delivered, along with Project Sunrise, which will enable direct flights from Melbourne/Sydney to London and New York from 2026.

Despite the large share price rally, Qantas trades on a FY26 P/E of only 9x. This compares to leading international airlines trading at 10–14x P/E. We believe the Qantas multiple fails to fully reflect its leading industry position, the structural growth in Asia-Pacific travel demand and its high growth, capital-light loyalty business.

BSD Analysis:
Qantas Airways is the undisputed, monopolistic Australian airline titan whose stock is a conviction bet on the non-cyclical, post-pandemic recovery of global and domestic air travel. The core moat is its dominant market share and its high-margin Qantas Loyalty program, which provides a stable, predictable revenue stream. The company is successfully executing an unprecedented fleet renewal program, which will drive superior fuel efficiency and operational cost reduction. Qantas is a high-quality compounder whose market dominance and essential role in Australian travel secure its long-term profitability.

Pitch Summary:
Santos (Long +15%) performed well during the quarter primarily driven by a non-binding, indicative cash takeover proposal from a consortium led by ADNOC to purchase Santos for US$5.76/sh (A$8.89/sh). This represents a 28% premium to the share price of Santos prior to the offer. The offer for Santos comes within the backdrop of significant volatility in oil prices, which declined 12% over the quarter, despite momentarily moving sharply higher on elevated levels of conflict in Iran. The takeover proposal supports our underlying thesis that Santos’ asset base is materially undervalued by the market. The company continues to make significant progress on its key growth initiatives, with its Barossa project now over 95% complete and on track for first production in 2025 and the Pikka project more than 82% complete. The completion of these projects will conclude a multi-year period of elevated capex spend and represents an inflection point for earnings and cashflows. As a result, and regardless of the ultimate outcome of the takeover proposal, we believe Santos remains well positioned to deliver attractive returns for investors.

BSD Analysis:
Santos is a deep-value, high-quality Australian energy pure-play whose stock is a conviction bet on the long-term, stable demand for natural gas and LNG. The core thesis is driven by its low-cost, long-life natural gas assets and its disciplined approach to deleveraging and capital return. The company is strategically focused on its Barossa gas project and its Carbon Capture and Storage (CCS) initiatives, positioning it as a key partner in the energy transition. The stock is an asymmetric value play, leveraging operational efficiency and a strong balance sheet to deliver superior cash flow and shareholder returns.

Pitch Summary:
Viva Energy Group (Long +27%) shares performed strongly driven by an improvement in both Australian retail fuel margins and global refining margins. Retail fuel margins have recovered from the prolonged trough at the start of 2025, and on average, have exceeded 2024 levels during Q2 25. Refining margins have been extremely volatile, having declined sharply on global macroeconomic fears following President Trump’s Liberation Day tariff announcement in April, then recovering primarily as a result of the escalating conflict in Iran. While Viva’s recent performance and H1 25 guidance have been disappointing, we continue to expect H2 25 to improve significantly, benefiting from acquiring its remaining interest in the Liberty Convenience business, substantial synergies from combining the Coles Express and OTR businesses and its $50m cost-out program. OTR remains a proven, high-quality fuel and convenience retail offering. There is significant earnings upside potential from rolling out OTR across the well-located, but historically under-invested Coles Express sites, with the initial set of conversions performing well. Management have retained their $500m EBITDA target for the Convenience & Mobility business (compared with $231m EBITDA in 2024).

BSD Analysis:
Viva Energy Group is a high-quality, diversified Australian energy pure-play whose stock is a conviction bet on the non-cyclical demand for transport fuels and its premium retail network. The core moat is its dominance in the Australian market, operating the Geelong Refinery and holding the exclusive license to the Shell retail brand. The company is successfully diversifying its revenue base with the acquisition of the Coles Express convenience store network, which will accelerate its shift to high-margin convenience retail. The stock is a high-quality compounder whose value is secured by essential infrastructure and a superior retail footprint.

Pitch Summary:
Hudbay Minerals (Long +32%) shares rallied over the quarter driven by rising copper and gold prices (+3.8% and +5.5%, respectively), in addition to strong first quarter results. During Q1 25 Hudbay delivered robust operating performance across both its major assets, exceeding consensus expectations. Most notably, gold production from Manitoba in Canada was higher than expected on strong mill performance and higher than anticipated gold grades. Stronger gold production combined with higher gold prices delivered a ~35% beat to consensus expectations for Q1 25 EBITDA. Hudbay is a mid-tier mining company primarily producing copper, along with gold and zinc, with its key assets located in Canada and Peru. We are attracted to Hudbay due to our positive medium-term outlook for copper and the company’s ability to de-lever its balance sheet and recycle capital back into its highly prospective exploration program and major growth projects. The most exciting near-term opportunity is its fully permitted Copper World project in Arizona, which will increase Hudbay’s copper production by more than 50%.

BSD Analysis:
Hudbay Minerals is a deep-value, copper-focused mining pure-play whose stock is an asymmetric recovery bet on the long-term, structural deficit in copper supply. The core thesis is driven by its massive asset base and low cost operations across North America and South America. The company is a leveraged play on the electrification supercycle—copper is essential for EVs, renewables, and AI data centers. Hudbay is focused on bringing its Copper World project online to significantly boost production and capture the anticipated surge in copper prices.

Pitch Summary:
NexGen Energy (Long +47%) moved higher as spot uranium prices increased 16% during the June quarter to close at US$74/lb. This move largely recovered the Q1 25 spot uranium price decline that had been driven by low volumes and heightened uncertainty associated with U.S. tariff policy. This occurred even as uranium ‘term’ prices (the agreed contracted price representing almost all commercial uranium demand) held largely steady over the last six months. Sentiment notably improved during the quarter as President Trump signed several executive orders aimed at accelerating U.S. nuclear investment, including a target to quadruple U.S. nuclear capacity from ~100GW today to 400GW by 2050.NexGen is preparing to develop the world’s largest undeveloped uranium deposit, Arrow, located in Saskatchewan, Canada. This will be a major, new, strategic Western source to address the looming uranium market deficit. The company is about to enter the final stage of Federal approval with a commission hearing expected to conclude in H1 26, following which it can commence full scale project construction. Once developed, Arrow has the potential to generate more than C$2b of cash flow annually, assuming a conservative uranium price. We believe this is a compelling proposition given NexGen’s current market cap of only ~C$5.5b.

BSD Analysis:
NexGen Energy is a pure-play, high-growth uranium developer whose stock is a conviction bet on the multi-decade nuclear renaissance. The core moat is its Arrow Deposit in Saskatchewan, Canada, which is one of the highest-grade, largest-scale uranium deposits globally. The company is strategically positioned to become a major supplier to the accelerating global utility demand for nuclear fuel. NexGen is a leveraged play on the structural tightening of the uranium supply market and the non-cyclical, ESG-driven need for reliable, zero-carbon power.

Pitch Summary:
Finning (TSX:FTT) is the largest Caterpillar dealer globally with diversified exposure by geography, customer base, product and sector. The company has been a strong contributor to LSF performance with the share price up +58% over the calendar year-to-date. The primary catalyst has been Finning’s impressive Q1 25 results, where the company delivered 18% EPS growth over the prior and exceeded consensus estimates by about 15%. Despite the strong share price performance to date, we believe the company remains undervalued, with Finning trading on an FY26 P/E of only 13.2x for a double-digit p.a. EPS growth outlook over the next few years. Finning operates in three key regions: Western Canada (48% of EBIT), South America (43% of EBIT) and UK & Ireland (8% of EBIT) (see Figure 9).
We have followed the company for several years as a key comparable to WesTrac, the leading Caterpillar dealer in the Australian market, which is owned by Seven Group Holdings (SGH). We view WesTrac as the highest quality business within SGH given the strength of its business model, its high ROIC and FCF generation, and the top tier management team driving operations.
We have benefited from WesTrac’s strong performance (EBIT has tripled from 2018 to 2024) through being invested in SGH on several prior occasions in the Fund. We saw many of the same characteristics in our evaluation of Finning which led us to initiate a position earlier this year. However, we believe the market is yet to fully appreciate the transformation Finning has been through and the strong earnings growth outlook under its high quality management team going forward.

BSD Analysis:
Finning International is an indispensable, high-quality heavy equipment dealer whose stock is a conviction bet on the non-cyclical, long-term demand for mining and construction equipment. The core moat is its exclusive Caterpillarmathbfdealership} rights across highly strategic territories (Western Canada, U.K., South America). This grants it a virtual monopoly on essential equipment sales and, more importantly, high-margin parts and service revenue. The stock is a high-quality compounder whose value is secured by the non-discretionary spending of global resource and infrastructure clients.